Registration No. 333-___________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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TEXAS UTILITIES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 75-2669310
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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, PETER B. TINKHAM ROBERT J. REGER,
Esq. Texas Utilities JR., Esq.
Worsham, Forsythe Company Reid & Priest LLP
& Wooldridge, L.L.P. Secretary and 40 West 57th Street
1601 Bryan Street Assistant Treasurer New York, New York
Dallas, Texas 75201 1601 Bryan Street 10019
(214) 979-3000 Dallas, Texas 75201 (212) 603-2000
(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
Approximate date of commencement of proposed sale of the
securities to the public:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES
EFFECTIVE.
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CALCULATION OF REGISTRATION FEE
==========================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT(1) PRICE(1) FEE(1)
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6.20% SERIES A
EXCHANGE SENIOR
NOTES DUE 2002 $125,000,000 100% $125,000,000 $36,875
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6.375% SERIES B
EXCHANGE SENIOR
NOTES DUE 2004 $175,000,000 100% $175,000,000 $51,625
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TOTAL EXCHANGE NOTES $300,000,000 100% $300,000,000 $88,500
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(1) The filing fee has been calculated pursuant to Rule 457(f)
promulgated under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
Subject to Completion, dated ____________, 1998
TEXAS UTILITIES COMPANY
OFFER TO EXCHANGE ANY OR ALL OF ITS
6.20% SERIES A 6.375% SERIES B
SENIOR NOTES DUE 2002 SENIOR NOTES DUE 2004
FOR FOR
6.20% SERIES A 6.375% SERIES B
EXCHANGE SENIOR NOTES DUE 2002 EXCHANGE SENIOR NOTES DUE 2004
Texas Utilities Company, a Texas corporation (Company), hereby
offers upon the terms and subject to the conditions set forth in
this Prospectus and the accompanying Letter of Transmittal
(Letter of Transmittal) to exchange (Exchange Offer) any and all
of its outstanding 6.20% Series A Senior Notes due 2002 (Series A
Notes) for an equal principal amount of its 6.20% Series A
Exchange Senior Notes due 2002 (Series A Exchange Notes) and any
and all of its outstanding 6.375% Series B Senior Notes due 2004
(Series B Notes) for an equal principal amount of its 6.375%
Series B Exchange Senior Notes due 2004 (Series B Exchange
Notes). Hereinafter the Series A Exchange Notes and the Series B
Exchange Notes are referred to together as the New Notes, and the
Series A Notes and the Series B Notes are referred to as the Old
Notes. The New Notes and the Old Notes are sometimes referred to
herein collectively as the Notes or the Senior Notes. The forms
and terms of the New Notes will be the same as the forms and
terms of the related Old Notes except that the New Notes will be
registered under the Securities Act of 1933, as amended
(Securities Act), and hence (except for any legend required by
The Depositary Trust Company), will not bear legends restricting
the transfer thereof. Each series of the New Notes will be
entitled to the benefits of the indenture governing the
corresponding series of Old Notes.
The New Notes will be unsecured obligations of the Company.
Interest on the New Notes will be payable semi-annually on April
1 and October 1 of each year. The New Notes of each series will
be redeemable as a whole, at any time, or in part, from time to
time, at the option of the Company, at a redemption price equal
to the sum of (a) the greater of (i) 100% of the principal amount
thereof and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon from the
redemption date to the maturity date, computed by discounting
such payments, in each case, to the redemption date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate (as defined herein), plus 5 basis
points, plus (b) accrued interest on the principal amount thereof
to the redemption date. See DESCRIPTION OF THE NEW NOTES.
Payment of the principal of and interest on each series of New
Notes when due will be guaranteed by a financial guaranty
insurance policy (each, a Policy), as more fully described
herein, to be issued by MBIA Insurance Corporation (Insurer) on
or before the date of issuance and delivery of the New Notes.
[MBIA logo]
The Company will accept for exchange any and all Old Notes
which are properly tendered to The Bank of New York, as Exchange
Agent, in the Exchange Offer prior to 5:00 p.m., New York City
time, on ______, 1998 (if and as extended, the Expiration Date).
Tenders of Old Notes may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date. The Exchange
Offer is not conditioned upon any minimum principal amount of Old
Notes being tendered for exchange. Old Notes may be tendered
only in denominations of $5,000 and integral multiples of $1,000
in excess thereof.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME ON , 1998, UNLESS THE
EXCHANGE OFFER IS EXTENDED.
(cover continued on following page)
<PAGE>
Based on existing interpretations of the Securities Act by the
staff of the Commission's Division of Corporation Finance (Staff)
set forth in several no-action letters to third parties, and
subject to the immediately following sentence, the Company
believes that the Exchange Senior Notes issued pursuant to the
Exchange Offer may be offered for resale, resold and otherwise
transferred by the Holders thereof (other than Holders who are
broker-dealers) without further compliance with the registration
and prospectus delivery provisions of the Securities Act.
However, any purchaser of Old Notes (i) who is an affiliate of
the Company or (ii) who intends to participate in the Exchange
Offer for the purpose of distributing New Notes, or any broker-
dealer who purchased Old Notes to resell pursuant to Rule 144A
or any other available exemption under the Securities Act
(i) will not be able to rely on the interpretation of the Staff
set forth in the above-mentioned no-action letters, (ii) will
not be entitled to tender its Old Notes in the Exchange Offer
and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection
with any sale or transfer of the Old Notes unless such sale or
transfer is made pursuant to any exemption from such requirements.
The Company does not intend to seek its own no-action letter,
and there can be no assurance that the Staff would make a similar
determination with respect to the New Notes as it has in such
no-action letters to other parties. See THE EXCHANGE OFFER.
The Company believes that none of the Holders of the Old Notes
is an affiliate (as such term is defined in Rule 405 under the
Securities Act) of the Company.
The Company will not receive any proceeds from the Exchange
Offer. The Company has agreed to bear the expenses of the
Exchange Offer. No underwriter is being used in connection with
the Exchange Offer.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------------
The date of this Prospectus is , 1998.
<PAGE>
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . 3
DOCUMENTS INCORPORATED BY REFERENCE . . . . . . . . . . . . . 4
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . 5
SUMMARY OF HISTORICAL AND PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . 9
THE COMPANY AND ITS SUBSIDIARIES . . . . . . . . . . . . . . 10
THE EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . 11
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . 18
DESCRIPTION OF THE NEW NOTES . . . . . . . . . . . . . . . . 18
NEW NOTE INSURANCE . . . . . . . . . . . . . . . . . . . . . 32
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES . . . . 35
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . 36
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 38
2
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTA-
TIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION
OF ANY OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL.
AVAILABLE INFORMATION
The Company is, and its predecessors, Texas Energy Industries,
Inc. (formerly Texas Utilities Company) (TEI) and ENSERCH
Corporation (ENSERCH), have been, subject to the informational
requirements of the Securities and Exchange Act of 1934, as
amended (Exchange Act), and in accordance therewith the Company
files, and its predecessors have filed, reports, proxy statements
and other information with the Commission. Such reports, proxy
statements and other information filed by the Company and its
predecessors can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Chicago Regional Office, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and New
York Regional Office, 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can also be obtained
from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, the Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports and other information
filed by the Company, TEI and ENSERCH. The Common Stock of the
Company is listed on the New York, Chicago and Pacific stock
exchanges, where reports, proxy statements and other information
concerning the Company and TEI may be inspected. Reports, proxy
statements and other information concerning ENSERCH may be
inspected at the New York and Chicago stock exchanges.
3
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
THE COMPANY, TEI AND ENSERCH
On August 5, 1997, the Company became a holding company which
owns all of the outstanding common stock of TEI (Commission File
No. 1-3591) and ENSERCH (Commission File No. 1-3183). The
following documents, previously filed with the Commission by the
Company (Commission File No. 1-12833), TEI or ENSERCH pursuant to
the Exchange Act are incorporated herein by reference:
(a) TEI's Annual Report on Form 10-K for the year
ended December 31, 1996 (TEI 10-K).
(b) TEI's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31 and June 30,
1997.
(c) ENSERCH's Annual Report on Form 10-K for the year
ended December 31,1996 (ENSERCH 10-K).
(d) ENSERCH's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1997 and
June 30, 1997.
(e) ENSERCH's Current Reports on Form 8-K dated
January 14, March 12, June 5, July 3, August 4 and
August 6, 1997.
(f) The Company's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1997
(September 1997 10-Q).
(g) The Company's Current Reports on Form 8-K dated
August 5, August 25, 1997, November 21, 1997 and
December 17, 1997.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering hereunder
shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of
such documents; provided, however, that the documents enumerated
above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing
with the Commission of the Company's most recent Annual Report on
Form 10-K shall not be incorporated by reference in this
Prospectus or be a part hereof from and after the filing of such
Annual Report on Form 10-K. The documents which are incorporated
by reference in this Prospectus are sometimes hereinafter
referred to as the "Incorporated Documents."
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO
EACH PERSON, INCLUDING ANY BENEFICIAL OWNER OF NEW NOTES, TO WHOM
A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR
ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE
INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS
(UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS) AND THE INDENTURES AND OFFICER'S
CERTIFICATES, EACH AS DESCRIBED HEREIN. REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO: SECRETARY, TEXAS UTILITIES COMPANY,
ENERGY PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201; TELEPHONE
NUMBER (214) 812-4600.
THE INSURER
Certain financial information regarding the Insurer is
incorporated herein by reference. See NEW NOTE INSURANCE.
4
<PAGE>
SUMMARY INFORMATION
The following summary information is qualified in its
entirety by the information contained elsewhere in this
Prospectus and in the Incorporated Documents.
THE COMPANY
The Company is a holding company which owns all of the
outstanding common stock of TEI and ENSERCH. TEI is a holding
company whose largest subsidiary is Texas Utilities Electric
Company (TU Electric). TU Electric is an electric utility
engaged in the generation, purchase, transmission, distribution
and sale of electric energy in the north central, eastern and
western parts of Texas. ENSERCH is an integrated company focused
on natural gas. ENSERCH operates primarily in the north central
and eastern parts of Texas. Its major business segments are
natural gas pipeline, processing, marketing and distribution. In
addition, in November 1997, the Company acquired Lufkin-Conroe
Communications Co. (LCC), a privately held, independent local
exchange telephone company. See THE COMPANY AND ITS
SUBSIDIARIES.
THE PRIVATE OFFERING
OLD NOTES . . . . The Company issued and sold $125,000,000
principal amount of its 6.20% Series A
Senior Notes due 2002, and $175,000,000
principal amount of its 6.375% Series B
Senior Notes due 2004 to Lehman Brothers
Inc., Citicorp Securities, Inc. and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated (Initial Purchasers) in a
transaction exempt from the registration
requirements of the Securities Act
(Private Offering). The Initial
Purchasers sold the Old Notes to certain
qualified institutional buyers pursuant
to Rule 144A under the Securities Act.
USE OF PROCEEDS . The Company received approximately
$298,000,000 in net proceeds from the
Private Offering, after deducting
discounts to the Initial Purchasers and
expenses of the Private Offering. The
Company used the net proceeds for
investment in the common stocks of
subsidiaries and for other corporate
purposes. The Company will not receive
any proceeds from the Exchange Offer.
THE EXCHANGE OFFER
THE NOTE EXCHANGE
OFFER . . . . . . The Company is offering to exchange
Series A Exchange Notes and Series B
Exchange Notes in principal amounts of
$5,000 and integral multiples of $1,000
in excess thereof for equal principal
amounts of Series A Notes and Series B
Notes, respectively, that are properly
tendered and accepted. The Company will
issue the New Notes on or promptly after
the Expiration Date. There is
$125,000,000 aggregate principal amount
of Series A Notes and $175,000,000
aggregate principal amount of Series B
Notes outstanding. See THE EXCHANGE
OFFER.
5
<PAGE>
RESALE OF NEW Based on existing interpretations of the
NOTES . . . . . . Securities Act by the staff of the
Commission's Division of Corporation
Finance (Staff) set forth in several no-
action letters to third parties, and
subject to the immediately following
sentence, the Company believes that the
New Notes issued pursuant to the Exchange
Offer may be offered for resale, resold
and otherwise transferred by the Holders
thereof (other than Holders who are broker-
dealers) without further compliance with
the registration and prospectus delivery
provisions of the Securities Act. However,
any purchaser of Old Notes (i) who is an
affiliate of the Company or (ii) who intends
to participate in the Exchange Offer for the
purpose of distributing New Notes, or any
broker-dealer who purchased Old Notes to
resell pursuant to Rule 144A or any other
available exemption under the Securities Act
(i) will not be able to rely on the
interpretation of the Staff set forth in
the above-mentioned no-action letters,
(ii) will not be entitled to tender its Old
Notes in the Exchange Offer and (iii) must
comply with the registration and prospectus
delivery requirements of the Securities
Act in connection with any sale or
transfer of the Old Notes unless such
sale or transfer is made pursuant to any
exemption from such requirements. The
Company does not intend to seek its own
no-action letter, and there can be no
assurance that the Staff would make a
similar determination with respect to the
New Notes as it has in such no-action
letters to other parties.
Each Holder of Old Notes (other than
certain specified Holders) that wishes to
exchange Old Notes for New Notes in the
Exchange Offer will be required to represent
that (i) it is not an affiliate of the
Company, (ii) the New Notes to be received by
it were acquired in the ordinary course
of its business and (iii) at the time of
the Exchange Offer, it has no arrangement
with any person to participate in the
distribution (within the meaning of the
Securities Act) of the New Notes.
In addition, in connection with any resales
of New Notes, any broker-dealer (Participating
Broker-Dealer) that acquired Old Notes for
its own account as a result of market-making or
other trading activities must deliver a
prospectus meeting the requirements of the
Securities Act. The Staff has taken the
position that Participating Broker-Dealers may
fulfill their prospectus delivery requirements
with respect to New Notes (other than
resale of an unsold allotment from the
original sale of Old Notes) with the
prospectus contained in the Exchange Offer
Registration Statement. Under the
Registration Rights Agreement, the Company
is required to allow Participating Broker-
Dealers and other persons, if any, subject to
similar prospectus delivery requirements to
use the prospectus contained in the Exchange
Offer Registration Statement in connection
with the resale of such New Notes.
EXPIRATION DATE . The Exchange Offer will expire at 5:00
p.m., New York City time, on _____, 1998
unless extended, in which case the term
"Expiration Date" shall mean the latest
date and time to which the Exchange Offer
is extended. The Company will accept for
exchange any and all Old Notes which are
properly tendered in the Exchange Offer
prior to 5:00 p.m., New York City time,
on the Expiration Date. The New Notes
issued pursuant to the Exchange Offer
will be delivered on or promptly after
the Expiration Date.
6
<PAGE>
PROCEDURES FOR
TENDERING OLD Each Holder of Old Notes wishing to
NOTES . . . . . . participate in the Exchange Offer must
complete, sign and date the Letter of
Transmittal, or a facsimile thereof, in
accordance with the instructions
contained herein and therein, and mail or
otherwise deliver such Letter of
Transmittal, or such facsimile, together
with such Old Notes (if held in
certificated form) and any other required
documentation to The Bank of New York, as
exchange agent for the Notes (the
Exchange Agent). By executing the Letter
of Transmittal, each Holder will
represent to the Company that, among
other things, the New Notes acquired
pursuant to the Exchange Offer are being
obtained in the ordinary course of
business of the person receiving such New
Notes, that such person will not and has
no arrangement or understanding with any
person to participate in the distribution
of such New Notes, and that neither the
Holder nor any such other person is an
"affiliate," as defined in Rule 405 under
the Securities Act, of the Company.
SPECIAL
PROCEDURES FOR Any beneficial owner whose interests in
BENEFICIAL OWNERS the Old Notes are registered in the name
of a broker, dealer, commercial bank,
trust company, nominee, or other
securities intermediary and who wishes to
tender such Old Notes in the Exchange
Offer should contact such securities
intermediary promptly and instruct such
securities intermediary to tender on such
beneficial owner's behalf. If a
beneficial owner whose Old Notes are in
certificated form wishes to tender on
such owner's own behalf, such owner must,
prior to completing and executing the
Letter of Transmittal and delivering its
Old Notes, either make appropriate
arrangements to register ownership of the
Old Notes in such owner's name or obtain
a properly completed assignment from the
registered Holder. The transfer of
registered ownership may take
considerable time and might not be
completed prior to the Expiration Date.
GUARANTEED
DELIVERY Holders of Old Notes who wish to tender
PROCEDURES . . . their Old Notes and whose Old Notes are
not immediately available or who cannot
deliver their Old Notes or the Letter of
Transmittal to the Exchange Agent prior
to the Expiration Date, must tender their
Old Notes according to the guaranteed
delivery procedures set forth in THE
EXCHANGE OFFER--"Procedures for
Tendering."
WITHDRAWAL RIGHTS Tenders of Old Notes may be withdrawn at
any time prior to 5:00 p.m., New York
City time, on the Expiration Date.
EXCHANGE AGENT . The Bank of New York is the Exchange
Agent. Its telephone number
is (212) ___________. The address of the
Exchange Agent is set forth in THE
EXCHANGE OFFER--"Exchange Agent."
THE NEW NOTES
NEW NOTES . . . . $125,000,000 principal amount of the
Company's 6.20% Series A Exchange Senior
Notes due 2002, and $175,000,000
principal amount of the Company's 6.375%
Series B Exchange Senior Notes due 2004.
MATURITY . . . . The Series A Exchange Notes will mature
on October 1, 2002.
The Series B Exchange Notes will mature
on October 1, 2004.
INTEREST ACCRUAL Interest on each series of New Notes will
accrue from the last date on which semi-
annual interest was paid on the Old Notes
of each series.
INTEREST PAYMENT April 1 and October 1 of each year
DATES . . . . . . (Interest Payment Dates).
7
<PAGE>
REDEMPTION . . . The New Notes of each series may be
redeemed as a whole, at any time, or in
part, from time to time, at the option of
the Company, at a redemption price equal
to the sum of (a) the greater of (i) 100%
of the principal amount thereof and
(ii) the sum of the present values of the
remaining scheduled payments of principal
and interest thereon from the redemption
date to the maturity date, computed by
discounting such payments, in each case,
to the redemption date on a semi-annual
basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury
Rate (as defined herein), plus 5 basis
points, plus (b) accrued interest on the
principal amount thereof to the date of
redemption. See DESCRIPTION OF THE NEW
NOTES -- "Redemption."
RANKING . . . . . The New Notes will be unsecured
obligations of the Company and, so long
as they are unsecured, will rank pari
passu with all senior unsecured
indebtedness of the Company. The
Indenture (as defined herein) does not
limit the amount of debt the Company or
any of its subsidiaries may incur.
Because the Company is a holding company
that derives substantially all of its
income from its operating subsidiaries,
the New Notes will be effectively
subordinated to debt and preferred stock
at the subsidiary level. See DESCRIPTION
OF THE NEW NOTES -- "General."
SENIOR NOTE Payment of the principal of and interest
INSURANCE . . . . on each series of New Notes when due will
be guaranteed by a Policy, as more fully
described herein, to be issued by the
Insurer on the Expiration Date.
FORM AND
DENOMINATION . . The New Notes will be issued in fully
registered form only in denominations of
$5,000 and in integral multiples of
$1,000 in excess thereof.
DTC ELIGIBILITY . New Notes of each series will be
represented by a Global Certificate
deposited with, or on behalf of, The
Depositary Trust Company (DTC) or its
nominee. See DESCRIPTION OF THE NEW
NOTES -- "Book-Entry."
SAME DAY It is expected that beneficial interests
SETTLEMENT . . . in the New Notes will trade in DTC's
Same-Day Funds Settlement System until
maturity. Therefore, secondary market
trading activity in such interests will
be settled in immediately available
funds.
LIMITATION ON The Company may not grant a lien on the
LIENS . . . . . . capital stock of any of its subsidiaries
to secure indebtedness of the Company
without similarly securing the New Notes,
with certain exceptions. See DESCRIPTION
OF THE NEW NOTES -- "Limitation on
Liens."
ASSIGNMENT OF The Company may assign all its
OBLIGATIONS . . . obligations with respect to either or
both series of the New Notes to a wholly-
owned subsidiary which assumes such
obligations. At the time of any such
assignment, the Company will fully and
unconditionally guarantee the payment as
and when due of the principal of,
premium, if any, and interest on, such
New Notes. See DESCRIPTION OF THE NEW
NOTES -- "Assignment of Obligations."
EFFECT OF NOT Any Old Note not tendered in the Exchange
TENDERING . . Offer will remain outstanding and
continue to accrue interest, but will
generally not retain any rights under the
Registration Rights Agreement relating to
the Old Notes (except in the case of the
Initial Purchasers and Participating
Broker-Dealers as provided therein).
TRUSTEE,
REGISTRAR AND The Bank of New York
PAYING AGENT . .
8
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SUMMARY OF HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
OF TEI, THE COMPANY AND THEIR RESPECTIVE SUBSIDIARIES
(THOUSANDS OF DOLLARS, EXCEPT RATIOS AND PERCENTAGES)
The following material, which is presented herein solely to furnish
limited introductory information, is qualified in its entirety by, and
should be considered in conjunction with, the other information appearing
in this Prospectus, including the Incorporated Documents. In the opinion
of TEI and the Company, all adjustments (constituting only normal recurring
accruals) necessary for a fair statement of the results of operations for
the twelve months ended September 30, 1997, have been made.
TEI
-------------------------------------------------------
TWELVE MONTHS ENDED
-------------------------------------------------------
DECEMBER 31,
--------------------------------------------------------
1992 1993 1994 1995
------------ ------------ ------------- ------------
Income statement data:
Operating
Revenues . . $4,907,876 $5,434,512 $5,663,543 $5,638,688
Net Income
(Loss) (b) . $ 700,111 $ 368,660 $ 542,799 $ (138,645)
Ratio of
Earnings to
Fixed
Charges (b) 2.33 1.89 2.29 0.84
COMPANY COMPANY
TEI ACTUAL PRO FORMA(A)
------------ ------------ -------------
TWELVE MONTHS ENDED
-----------------------------------------
DECEMBER 31, SEPTEMBER 30,
------------ 1997
1996 (UNAUDITED)
---- ---------------------------
Income statement data:
Operating Revenues . $6,550,928 $6,812,852 $8,663,334
Net Income (Loss) (b) $ 753,606 $ 631,748 $ 627,395
Ratio of Earnings to
Fixed Charges (b) . 2.39 2.21 2.15
COMPANY
---------------
OUTSTANDING AT
SEPTEMBER 30,
1997
---------------
Capitalization (Unaudited):
Long-term Debt . . . . . . . . . . . . . . . . $ 9,094,826
Preferred Stock:
Not subject to mandatory redemption . . . . . 304,194
Subject to mandatory redemption . . . . . . . 20,596
-----------
Total Preferred Stock . . . . . . . . . . 324,790
TU Electric Obligated Mandatorily Redeemable
Preferred Securities of Trusts Holding Solely
Debentures of TU Electric (d) . . . . . . . . 875,005
6,654,220
Common Stock Equity . . . . . . . . . . . . . . . -----------
$16,948,841
Total Capitalization . . . . . . . . . . . . . ===========
ADJUSTED(C)
--------------------
AMOUNT PERCENT
-------- --------
Capitalization (Unaudited):
Long-term Debt . . . . . . . . . . . . . . $ 9,890,191 55.2%
Preferred Stock:
Not subject to mandatory redemption . . . 204,194
Subject to mandatory redemption . . . . . 20,596
-----------
Total Preferred Stock . . . . . . . . 224,790 1.3%
TU Electric Obligated Mandatorily Redeemable
Preferred Securities of Trusts Holding
Solely Debentures of TU Electric (d). . . 875,005 4.9%
6,921,119 38.6%
Common Stock Equity . . . . . . . . . . . . . ----------- ------
$17,911,105 100.0%
Total Capitalization . . . . . . . . . . . =========== ======
(a) Pro forma income statement data for the Company reflects historical
income statement data for TEI and pro forma income statement data for
ENSERCH and assumes that the merger was consummated at the beginning
of the period presented. Pro forma income statement data for ENSERCH
is derived from the historical financial statements of ENSERCH and
gives effect to the distribution of all of ENSERCH's interest in its
former subsidiaries, Lone Star Energy Plant Operations, Inc. and
Enserch Exploration, Inc., to its shareholders (ENSERCH
Distribution), and assumes that the ENSERCH Distribution had occurred
at the beginning of the period presented. The unaudited pro forma
net income for the twelve months ended September 30, 1997 excludes
$27,349,000 of direct merger expenses incurred by ENSERCH and
contains only the income from continuing operations.
(b) The twelve-month period ended December 31, 1992 was affected by the
discontinuation of the accrual of allowance for funds used during
construction (AFUDC) and the commencement of depreciation on
approximately $1.3 billion of investment in Unit 1 of the Comanche
Peak nuclear generating station (Comanche Peak) and facilities which
are common to Comanche Peak Units 1 and 2 incurred after the end of
the June 30, 1989 test year and, therefore, not included in TU
Electric's Docket 9300 rate case. Effective January 1992, TU
Electric began recording base rate revenue for energy sold but not
billed to achieve a better matching of revenues and expenses. The
effect of this change in accounting increased net income for the
twelve months ended December 31, 1992, by approximately $102 million,
of which approximately $80 million represents the cumulative effect
of the change in accounting at January 1, 1992. The twelve-month
period ended December 31, 1993 was affected by the recording of
regulatory disallowances in TU Electric's Docket 11735. The twelve-
month period ended December 31, 1995 was affected by the impairment
of several nonperforming assets, including TU Electric's partially
completed Twin Oak and Forest Grove lignite-fueled facilities and the
New Mexico coal reserves of a subsidiary, as well as several minor
assets. Such impairment, on an after-tax basis, amounted to $802
million. (See the TEI 10-K.) The twelve months ended September 30,
1997 include a one time base revenue refund of $80 million as a
result of a settlement with the Public Utility Commission of Texas
(PUC) and a fuel disallowance charge of $80 million as a result of a
fuel reconciliation proceeding before the PUC. (See the September
1997 10-Q.)
(c) To give effect to (1) the issuance of the Senior Notes, Series A and
B by the Company (2) the issuance by the Company in January 1998 of
$200,000,000 principal amount of Senior Notes, Series C, (3) the
repurchase of common stock since September 30, 1997, (4) the issuance
of 8,727,729 shares of common stock and the addition of $31,290,000
of long-term debt in connection with the acquisition of LCC in
November 1997, (5) the issuance by the Trinity River Authority of
Texas in October 1997 of $14,075,000 principal amount of pollution
control revenue bonds, for which TU Electric is obligated to make
principal, interest and certain other payments, (6) the issuance by
ENSERCH in January 1998 of $125,000,000 aggregate principal amount of
its 6-1/4% Notes and $125,000,000 aggregate principal amount of its
Remarketed Reset Notes, and (7) the redemption in January 1997, of
$100,000,000 liquidation value of ENSERCH's preferred stock,
Adjustable Rate Series E. Adjusted amounts do not reflect any
possible future sales from time to time by the Company of up to
approximately 14,154,372 shares of its common stock, by TU Electric
of up to an additional $498,850,000 principal amount of its Senior
Debt and $25,000,000 of its cumulative preferred stock and by ENSERCH
and ENSERCH Capital I of up to $250,000,000 aggregate principal
amount of securities, for each of which registration statements are
effective pursuant to Rule 415 under the Securities Act.
(d) The sole assets of such trusts consist of junior subordinated
debentures of TU Electric in principal amounts, and having other
payment terms, corresponding to the securities issued by such trusts.
9
<PAGE>
THE COMPANY AND ITS SUBSIDIARIES
The Company is a Texas corporation organized in 1996 for the purpose of
becoming the holding company for TEI, formerly Texas Utilities Company, and
ENSERCH upon the mergers of TEI and ENSERCH with wholly owned subsidiaries
of the Company (Mergers). At the effective time of the Mergers, (i) the
Company changed its name from TUC Holding Company to Texas Utilities
Company, (ii) TEI changed its name from Texas Utilities Company to Texas
Energy Industries, Inc., (iii) all shares of common stock of TEI were
automatically converted into an equal number of shares of Common Stock of
the Company, (iv) ENSERCH distributed to its shareholders ENSERCH's entire
interest in its former subsidiaries, Lone Star Energy Plant Operations,
Inc. and Enserch Exploration, Inc., and (v) each share of common stock of
ENSERCH was automatically converted into approximately 0.225 share of
Common Stock of the Company.
TEI, a Texas corporation, is a holding company whose principal
subsidiary, TU Electric, is an operating public utility company engaged in
the generation, purchase, transmission, distribution and sale of electric
energy in the north central, eastern and western portions of Texas, an area
with a population estimated at 5,890,000. TU Electric's operating revenues
and consolidated net income available for common stock for the twelve
months ended September 30, 1997 were $6,003,446,000 and $750,593,000,
respectively. TU Electric's total capitalization at September 30, 1997 was
$13,537,839,000. Two other subsidiaries of TEI are engaged directly or
indirectly in public utility operations: (i) Southwestern Electric Service
Company, which is engaged in the purchase, transmission, distribution and
sale of electric energy in ten counties in the eastern and central parts of
Texas, with a population estimated at 126,900 and (ii) Texas Utilities
Australia Pty. Ltd., which in 1995 acquired the common stock of Eastern
Energy Limited, a company engaged in the purchase, distribution, marketing
and sale of electric energy to approximately 481,000 customers in the
Melbourne area of Australia. Neither Southwestern Electric Service Company
nor Eastern Energy Limited generates any electricity. TEI also has other
wholly owned subsidiaries which perform specialized functions within the
Texas Utilities Company system.
ENSERCH, a Texas corporation, is an integrated company focused on
natural gas. ENSERCH operates primarily in the north central and eastern
parts of Texas. Its major business operations are natural gas pipeline,
processing, marketing and distribution. Through these business operations,
ENSERCH is engaged in owning and operating interconnected natural gas
transmission lines, underground storage reservoirs, compressor stations and
related properties in Texas; gathering and processing natural gas to remove
impurities and extract liquid hydrocarbons for sale, and the wholesale and
retail marketing of natural gas in several areas of the United States, and
owning and operating approximately 550 local gas utility distribution
systems in Texas.
In November 1997, the Company consummated the acquisition of LCC, a
privately held, independent local exchange telephone company, with sixteen
exchanges that serve approximately 100,000 access lines in the Alto, Conroe
and Lufkin areas of southeast Texas. LCC also provides access services to
a number of interexchange carriers who provide long distance services. LCC
owns fiber optic cable systems which it leases to interexchange carriers,
leases radio communications towers, and provides Internet access, cellular
mobile telephone, radio paging and private branch exchange (PBX) services
to local customers. LCC also provides interchange long distance services,
with the primary focus being on business customers. Approximately 8.7
million shares of the Company's common stock were issued to LCC
shareholders in a stock for stock exchange. Approximately $31 million of
LCC's long-term debt remains outstanding.
The principal executive offices of the Company are located at 1601 Bryan
Street, Dallas, Texas 75201-3411; the telephone number is (214) 812-4600.
10
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Company issued and sold the Old Notes on October 10, 1997 to the
Initial Purchasers in a Private Offering pursuant to a Purchase Agreement,
dated October 7, 1997 (Purchase Agreement). The Initial Purchasers
subsequently sold the Old Notes to qualified institutional buyers in
reliance on Rule 144A under the Securities Act (QIB's).
Pursuant to the Purchase Agreement, the Company and the Initial
Purchasers entered into a Registration Rights Agreement, dated October 10,
1997, with respect to each series of Old Notes (each a Registration Rights
Agreement). Pursuant to the Registration Rights Agreements, the Company
agreed to use its reasonable best efforts to consummate the Exchange Offer
within 30 days after this Prospectus is mailed to the Holders. The
Registration Rights Agreements have identical terms, except for the
description in each case of the related Old Notes, a copy of each
Registration Rights Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part, and the
description herein of the terms of the Registration Rights Agreements is
qualified in its entirety by reference thereto. The Registration Statement
of which this Prospectus is a part is intended to satisfy the Company's
obligations with respect to the registration of the Old Notes in accordance
with the terms of the Registration Rights Agreements.
Based on existing interpretations of the Securities Act by the staff of
the Commission's Division of Corporation Finance (Staff) set forth in
several no-action letters to third parties, and subject to the immediately
following sentence, the Company believes that the New Notes issued
pursuant to the Exchange Offer may be offered for resale, resold and
otherwise transferred by the Holders thereof (other than Holders who are
broker-dealers) without further compliance with the registration and
prospectus delivery provisions of the Securities Act. However, any
purchaser of Old Notes (i) who is an affiliate of the Company or
(ii) who intends to participate in the Exchange Offer for the purpose of
distributing New Notes, or any broker-dealer who purchased Old Notes
to resell pursuant to Rule 144A or any other available exemption
under the Securities Act (i) will not be able to rely on the
interpretation of the Staff set forth in the above-mentioned no-action
letters, (ii) will not be entitled to tender its Old Notes in the
Exchange Offer and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
transfer of the Old Notes unless such sale or transfer is made pursuant
to any exemption from such requirements. The Company does not intend to
seek its own no-action letter, and there can be no assurance that the Staff
would make a similar determination with respect to the New Notes as
it has in such no-action letters to other parties.
Each Holder of Old Notes (other than certain specified Holders) that
wishes to exchange Old Notes for New Notes in the Exchange Offer will be
required to represent that (i) it is not an affiliate of the Company,
(ii) the New Notes to be received by it were acquired in the ordinary
course of its business and (iii) at the time of the Exchange Offer,
it has no arrangement with any person to participate in the distribution
(within the meaning of the Securities Act) of the New Notes. In
addition, in connection with any resales of New Notes, any broker-
dealer (Participating Broker-Dealer) that acquired Old Notes for its own
account as a result of market-making or other trading activities must
deliver a prospectus meeting the requirements of the Securities Act.
The Staff has taken the position that Participating Broker-Dealers may
fulfill their prospectus delivery requirements with respect to New
Notes (other than resale of an unsold allotment from the original sale
of Old Notes) with the prospectus contained in the Exchange Offer
Registration Statement. Under the Registration Rights Agreement, the
Company is required to allow Participating Broker-Dealers and other
persons, if any, subject to similar prospectus delivery
11
<PAGE>
requirements to use the prospectus contained in the Exchange Offer
Registration Statement in connection with the resale of such New
Notes.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, the Company will accept any
and all Old Notes validly tendered and not withdrawn prior to 5:00 p.m.,
New York City time, on the Expiration Date. The Company will issue Series
A Exchange Notes and Series B Exchange Notes in principal amounts equal to
$5,000 and integral multiples of $1,000 in excess thereof in exchange for
equal principal amounts of outstanding Series A Notes and Series B Notes,
respectively, surrendered pursuant to the Exchange Offer. Old Notes may be
tendered only in denominations of $5,000 and integral multiples of $1,000
in excess thereof.
The form and terms of the New Notes of each series will be the same as
the form and terms of the Old Notes of the related series except that the
New Notes will be registered under the Securities Act and hence will not
bear legends restricting the transfer thereof. The New Notes of each
series will evidence the same debt as the Old Notes of the related series.
The New Notes of each series will be issued under and entitled to the
benefits of the Indenture pursuant to which the related Old Notes were
issued.
As of the date of this Prospectus, there were outstanding $125,000,000
aggregate principal amount of Series A Notes and $175,000,000 aggregate
principal amount of Series B Notes. This Prospectus, together with the
Letter of Transmittal, is being sent to all registered Holders of the Old
Notes.
The Company intends to conduct the Exchange Offerin accordance with the
provisions of the Registration Rights Agreements and the applicable
requirements of the Exchange Act, and the rules and regulations of the
Commission thereunder. Old Notes that are not tendered for exchange in the
Exchange Offer will remain outstanding and will be entitled to the rights
and benefits such Holders have under the Indenture.
The Company shall be deemed to have accepted properly tendered Old Notes
when, as and if the Company shall have given oral or written notice thereof
to the exchange agent for the Exchange Offer (Exchange Agent). The
Exchange Agent will act as agent for the tendering Holders for the purposes
of receiving the New Notes from the Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering registered Holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange pursuant
to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes described below, in connection with the
Exchange Offer. See "Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date," shall mean 5:00 p.m., New York City time on
_______, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is extended.
12
<PAGE>
In order to extend the Exchange Offer, the Company will notify the
Exchange Agent of any extension by oral or written notice and will mail to
the registered Holders an announcement thereof prior to 9:00 a.m., New York
City time, on the next business day after the then Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "Conditions"
shall not have been satisfied by giving oral or written notice of such
delay, extension or termination to the Exchange Agent or (ii) to amend the
terms of the Exchange Offer in any manner consistent with the Registration
Rights Agreements. Any such delay in acceptances, extension, termination
or amendment will be followed as promptly as practicable by oral or written
notice thereof to the registered Holders. If the Exchange Offer is amended
in a manner determined by the Company to constitute a material change, the
Company will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered Holders, and the
Company will extend the Exchange Offer for a period of five to ten business
days, depending upon the significance of the amendment and the manner of
disclosure to the registered Holders, if the Exchange Offer would otherwise
expire during such five to ten business day period.
Without limiting the manner in which the Company may choose to make a
public announcement of any delay, extension, amendment or termination of
the Exchange Offer, the Company shall have no obligation to publish,
advertise, or otherwise communicate any such public announcement, other
than by making a timely release to an appropriate news agency.
Upon satisfaction or waiver of all the conditions to the Exchange Offer,
the Company will accept, promptly after the Expiration Date, all Old Notes
properly tendered and will issue the New Notes promptly after acceptance of
the Old Notes. See "Conditions." For purposes of the Exchange Offer, the
Company shall be deemed to have accepted properly tendered Old Notes for
exchange when, as and if the Company shall have given oral or written
notice thereof to the Exchange Agent.
In all cases, issuance of the New Notes for Old Notes that are accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of a properly completed and duly executed
Letter of Transmittal and all other required documents; provided, however,
that the Company reserves the absolute right to waive any defects or
irregularities in the tender or conditions of the Exchange Offer. If any
tendered Old Notes are not accepted for any reason set forth in the terms
and conditions of the Exchange Offer or if Old Notes are submitted for a
greater principal amount than the Holder desires to exchange, then such
unaccepted or non-exchanged Old Notes evidencing the unaccepted portion, as
appropriate, will be returned without expense to the tendering registered
Holder thereof as promptly as practicable after the expiration or
termination of the Exchange Offer.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company will
not be required to exchange any New Notes for any Old Notes of either
series and may terminate the Exchange Offer before the acceptance of any
Old Notes for exchange, if, with respect to such series:
(i) the Exchange Offer violates any applicable law or
interpretation of the staff of the Commission;
(ii) any action or proceeding has been instituted or threatened in
any court or by or before any governmental agency with respect to the
Exchange Offer which, in the reasonable judgment of the Company, would or
might impair the ability of the Company to proceed with the Exchange Offer;
13
<PAGE>
(iii) there has been any material change, or development involving a
prospective change, in the business or financial affairs of the Company or
any of its subsidiaries which, in the reasonable judgment of the Company,
would materially impair the Company's ability to consummate the Exchange
Offer or have a material adverse effect on the Company if the Exchange
Offer is consummated;
(iv) there has been proposed, adopted, or enacted any law,
statute, rule or regulation which, in the reasonable judgment of the
Company, might materially impair the ability of the Company to proceed with
the Exchange Offer or have a material adverse effect on the Company if the
Exchange Offer is consummated; or
(v) all governmental approvals which the Company shall reasonably
deem necessary for the consummation of the Exchange Offer as contemplated
shall not have been obtained.
If the Company determines in its sole discretion that any of these
circumstances exist, the Company may (i) refuse to accept any Old Notes and
return all tendered Old Notes to the tendering Holders, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the expiration of
the Exchange Offer, subject, however, to the rights of Holders who tendered
such Old Notes to withdraw their tendered Old Notes or (iii) waive any
unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Old Notes which have not been withdrawn. If such waiver
constitutes a material change to the Exchange Offer, the Company will
promptly disclose such waiver by means of a prospectus supplement that will
be distributed to the Holders, and the Company will extend the Exchange
Offer for a period of five to ten business days, depending upon the
significance of the waiver and the manner of disclosure to the Holders, if
the Exchange Offer would otherwise expire during such five to ten business
day period.
PROCEDURES FOR TENDERING
To tender Old Notes in the Exchange Offer, a Holder must complete, sign
and date the Letter of Transmittal, or facsimile thereof, have the
signatures thereon guaranteed if required by the Letter of Transmittal, and
mail or otherwise deliver such Letter of Transmittal or such facsimile to
the Exchange Agent prior to the Expiration Date. In addition, either (i) a
timely confirmation of book-entry transfer (Book-Entry Confirmation) of
such Old Notes into the Exchange Agent's account at DTC (Book-Entry
Transfer Facility) pursuant to the procedure for book-entry transfer
described below must be received by the Exchange Agent prior to the
Expiration Date, or (ii) certificates for such Old Notes must be received
by the Exchange Agent along with the Letter of Transmittal, or (iii) the
Holder must comply with the guaranteed delivery procedures described below.
The same Letter of Transmittal may be used for Old Notes of either or both
series. To be tendered effectively, the Letter of Transmittal and other
required documents must be received by the Exchange Agent at the address
set forth below under "Exchange Agent" prior to the Expiration Date.
A tender by a Holder which is not withdrawn prior to the Expiration Date
will constitute an agreement between such Holder and the Company in
accordance with the terms and subject to the conditions set forth herein
and in the Letter of Transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT
HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD
BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS,
DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE
TRANSACTIONS FOR SUCH HOLDERS.
14
<PAGE>
Any beneficial owner whose interests in the Old Notes are registered in
the name of a broker, dealer, commercial bank, trust company, nominee or
other securities intermediary and who wishes to tender should contact such
securities intermediary promptly and instruct such securities intermediary
to tender on such beneficial owner's behalf. If any such beneficial owner
whose Old Notes are in certificated form wishes to tender on such owner's
own behalf, such owner must, prior to completing and executing the Letter
of Transmittal and delivering such owner's Old Notes, either make
appropriate arrangements to register ownership of the Old Notes in such
owner's name or obtain a properly completed assignment from the Holder.
The transfer of ownership may take considerable time and might not be
completed prior to the Expiration Date.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined
below) unless the Old Notes tendered pursuant thereto are tendered (i) by a
Holder who has not completed the box entitled "Special Payment
Instructions" or "Special Delivery Instructions" on the Letter of
Transmittal or (ii) for the account of an Eligible Institution (as defined
below). In the event that signatures on a Letter of Transmittal or a
notice of withdrawal, as the case may be, are required to be guaranteed,
such guarantor must be a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Exchange Act (Eligible Institution).
If the Letter of Transmittal is signed by a person other than the Holder
of any Old Notes in certificated form listed therein, such Old Notes must
be endorsed or accompanied by a properly completed assignment signed by
such Holder as such Holder's name appears on such Old Notes.
If the Letter of Transmittal or any Old Notes or assignment are signed
by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived
by the Company, evidence satisfactory to the Company of their authority to
so act must be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old
Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute
right to reject any and all Old Notes not properly tendered or any Old
Notes the Company's acceptance of which would, in the opinion of counsel
for the Company, be unlawful. The Company also reserves the right to waive
any defects, irregularities or conditions of tender as to particular Old
Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within
such time as the Company shall determine. Although the Company intends to
notify registered Holders of defects or irregularities with respect to
tenders of Old Notes, none of the Company, the Exchange Agent or any other
person shall incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any Old Notes
received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent as the case may be, to the tendering
registered Holders, unless otherwise provided in the Letter of Transmittal,
as soon as practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding
subsequent to the Expiration Date or, as set forth above under
"Conditions," to terminate the Exchange Offer and, to the extent permitted
by applicable law, purchase Old Notes in the open market, in privately
negotiated transactions or otherwise. The terms of any such purchases or
offers could differ from the terms of the Exchange Offer.
15
<PAGE>
By tendering, each Holder will represent to the Company that, among
other things, (i) the New Notes acquired pursuant to the Exchange Offer are
being obtained in the ordinary course of business of the person receiving
beneficial ownership of such New Notes, whether or not such person is the
Holder, (ii) neither the Holder nor any such other person is engaging in or
intends to engage in a distribution of such New Notes (iii) neither the
Holder nor any such other person has an arrangement or understanding with
any person to participate in the distribution of such New Notes, and (iv)
neither the Holder nor any such other person is an "affiliate," as defined
in Rule 405 of the Securities Act, of the Company.
In all cases, issuance of New Notes that are accepted for exchange
pursuant to the Exchange Offer will be made only after timely receipt by
the Exchange Agent of certificates for such Old Notes or a timely
Book-Entry Confirmation of such Old Notes into the Exchange Agent's account
at the Book-Entry Transfer Facility, a properly completed and duly executed
Letter of Transmittal and all other required documents. If any tendered
Old Notes are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer or if Old Notes are submitted for a
greater principal amount than the Holder desires to exchange, such
unaccepted or non-exchanged Old Notes will be returned without expense to
the tendering Holder thereof (or, in the case of Old Notes tendered by
book-entry transfer into the Exchange Agent's account at the Book-Entry
Transfer Facility pursuant to the book-entry transfer procedures described
below, such non-exchanged Old Notes will be credited to an account
maintained with such Book-Entry Transfer Facility) as promptly as
practicable after the expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with
respect to the Old Notes at the Book-Entry Transfer Facility for purposes
of the Exchange Offer within two business days after the date of this
Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of Old
Notes by causing the Book-Entry Transfer Facility to transfer such Old
Notes into the Exchange Agent's account, respectively, at the Book-Entry
Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedures for transfer. However, although delivery of Old Notes may be
effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal or facsimile thereof, with any required signature
guarantees and any other required documents, must, in any case, be
transmitted to and received by the Exchange Agent at the address set forth
below under "Exchange Agent" on or prior to the Expiration Date or the
guaranteed delivery procedures described below must be complied with. As
of the date of this Prospectus, all of the outstanding Old Notes are in
book-entry form.
GUARANTEED DELIVERY PROCEDURES
Holders of Old Notes in certificated form who wish to tender their Old
Notes and (i) whose Old Notes are not immediately available or (ii) who
cannot deliver their Old Notes, the Letter of Transmittal or any other
required documents to the Exchange Agent prior to the Expiration Date, may
effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed notice
(Notice of Guaranteed Delivery), by facsimile transmission, mail or hand
delivery, setting forth the name and address of the Holder, the certificate
number(s) of such Old Notes and the principal amount of Old Notes tendered
stating that the tender is being made thereby and guaranteeing that, within
five New York Stock Exchange trading days after the Expiration Date, the
Letter of Transmittal (or facsimile thereof) together with the
certificate(s) representing the Old Notes and any other documents required
by the Letter of Transmittal will be deposited by the Eligible Institution
with the Exchange Agent; and
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(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Old Notes in proper form for transfer and other documents required by the
Letter of Transmittal are received by the Exchange Agent within five New
York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent a Notice of Guaranteed Delivery will
be sent to Holders of Old Notes in certificated form who wish to tender
their Old Notes according to the guaranteed delivery procedures set forth
above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the
Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a Holder must
send to the Exchange Agent, prior to 5:00 p.m., New York City time on the
Expiration Date, a telegram, facsimile transmission or letter
setting forth (i) the name of such Holder, (ii) the series and principal
amount of Old Notes delivered for exchange and (iii) a statement that such
Holder is withdrawing such Old Notes for exchange. Any such notice of
withdrawal must be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal by which such Old Notes were
tendered (including any required signature guarantees). If the Holder
tenders Old Notes in certificated form, such notice must also (i) specify
the name of the person having deposited such Old Notes delivered for
exchange and (ii) identify the Old Notes to be withdrawn (including the
certificate number). All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined
by the Company, whose determination shall be final and binding on all
parties. Any Old Notes so withdrawn will be deemed not to have been
validly tendered for purposes of the Exchange Offer and no New Notes will
be issued with respect thereto unless the Old Notes so withdrawn are
validly retendered. Any Old Notes which have been tendered but which are
not accepted for payment will be returned to the registered Holder thereof
without cost to such Holder as soon as practicable after withdrawal.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described above under "Procedures for Tendering" at any time
prior to the Expiration Date.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent of the
Exchange Offer. Questions and requests for assistance, requests for
additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notice of Guaranteed Delivery with respect to the exchange of
the Old Notes should be directed to the Exchange Agent addressed as
follows:
By Registered Mail or Certified By Overnight Courier:
Mail:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services
Attention: Reorganization Section, Window
Theresa Gass Ground Level
Attention: Reorganization
Section,
Theresa Gass
By Telephone: By Facsimile:
(212) 815-5942 (212) 815-6339
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FEES AND EXPENSES
The expenses of soliciting tenders will be paid by the Company. The
principal solicitation is being made by mail; however, additional
solicitation may be made by telecopier, telephone or in person by officers
and regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers-dealers or others
soliciting acceptances of the Exchange Offer. The Company will pay the
Exchange Agent reasonable and customary fees for their services and will
reimburse them for their reasonable out-of-pocket expenses in connection
therewith.
The cash expenses to be incurred in connection with the Exchange Offer
will be paid by the Company and are estimated in the aggregate to be
approximately $350,000. Such expenses include registration fees, fees and
expenses of the Exchange Agent, accounting and legal fees and printing
costs, among others.
The Company will pay all transfer taxes, if any, applicable to the
exchange of the Old Notes pursuant to the Exchange Offer. If, however,
certificates representing New Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the
name of, any person other than the Holder of Old Notes tendered, or if
tendered the Old Notes are registered in the name of, any person other than
the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of the Old Notes pursuant to
the Exchange Offer, then the amount of any such transfer taxes (whether
imposed on the registered Holder or any other persons) will be payable by
the tendering Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such tendering
Holder.
The Exchange Offer is being effected to satisfy the Company's
obligations under the Registration Rights Agreement. The Company will not
receive any proceeds from the Exchange Offer. In consideration of issuing
the New Notes in the Exchange Offer, the Company will receive an equal
principal amount of the Old Notes. Old Notes that are properly tendered in
the Exchange Offer and not validly withdrawn will be accepted, cancelled
and retired and cannot be reissued.
USE OF PROCEEDS
The net proceeds of approximately $298,000,000 received by the Company
from the sale of the Old Notes has been used to make additional investments
in the common stocks of its subsidiary companies to enable such
subsidiaries to fund construction programs, redeem their securities or
retire them as they mature and to repay short term borrowings incurred for
similar purposes. The Company will not receive any proceeds from the
issuance of the New Notes.
DESCRIPTION OF THE NEW NOTES
GENERAL
Each series of New Notes will be issued pursuant to an Indenture (for
Unsecured Debt Securities) dated as of October 1, 1997 (individually, an
Indenture and collectively, the Indentures), in each case, between the
Company and The Bank of New York (Trustee) pursuant to which the
corresponding Old Notes were issued and an officer's certificate
establishing such series (individually, an Officer's Certificate and
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collectively, the Officer's Certificates). While each series of New Notes
will be issued pursuant to an entirely separate Indenture and Officer's
Certificate and insured by a separate Policy, each series of New Notes will
contain substantially the same terms and provisions as the other except for
differences in the maturity date and the interest rates. In the following
description of the terms of the New Notes, except as otherwise noted,
references to the New Notes, the Debt Securities, the Indenture, the
Officer's Certificate, the Trustee, the Insurer and the Policy relate to
each series of New Notes, and this description should be read as referring
to each series of New Notes as a separate series.
The following description of the terms of the New Notes does not purport
to be complete and is qualified in its entirety by reference to (i) the
Indentures and (ii) the Officer's Certificates. Whenever particular
provisions or defined terms in the Indentures and Officer's Certificates
are referred to under this DESCRIPTION OF NEW NOTES, such provisions or
defined terms are incorporated by reference herein.
The Indenture provides for the issuance of debt securities (including
the New Notes), notes or other unsecured evidences of indebtedness by the
Company (each a Debt Security) in an unlimited amount from time to time.
The New Notes will be unsecured obligations of the Company which, so long
as they are unsecured, will rank pari passu in right of payment of
principal and interest with all other existing and future senior unsecured
obligations of the Company. The Indenture provides that the Company may
not grant a lien on the capital stock of any of its subsidiaries to secure
debt obligations of the Company without similarly securing the New Notes,
with certain exceptions. However, the Indenture does not limit the
aggregate amount of indebtedness the Company or its subsidiaries may issue.
The Company is a holding company that derives substantially all of its
income from its operating subsidiaries. The New Notes therefore will be
effectively subordinated to debt and preferred stock at the subsidiary
level. The financial statements of the Company and its predecessors
included in the Incorporated Documents show the aggregate amount of such
subsidiary debt and preferred stock and other debt of the Company as of the
date of such statements.
New Notes of each series will be represented by a Global Certificate,
will be issued only in fully registered form and, when issued, will be
registered in the name of Cede & Co., as registered owner and as nominee
for DTC. DTC will act as securities depository for the New Notes, with
certain exceptions. Purchases of beneficial interests in the New Notes
will be made in book-entry form. Except as described below, purchasers of
such beneficial interests will not receive certificates representing their
beneficial interests in the New Notes. See "Book-Entry" below.
Purchases of New Notes or beneficial interests therein may be made in
denominations of $5,000 or any integral multiples of $1,000 in excess
thereof.
PRINCIPAL AMOUNT, INTEREST AND MATURITY
The New Notes will be issued as a series of Debt Securities under the
Indenture. The Officer's Certificate with respect to the Series A Exchange
Notes limits the aggregate principal amount of the Series A Exchange Notes
to $125,000,000. The Officer's Certificate with respect to the Series B
Exchange Notes limits the aggregate principal amount of the Series B
Exchange Notes to $175,000,000.
The Series A Exchange Notes will mature on October 1, 2002. The Series
B Exchange Notes will mature on October 1, 2004. The New Notes of each
series will bear interest from the date of the most recent Interest Payment
Date for the corresponding Old Notes to which interest has been paid or
duly provided for with respect to such Old Notes, or if no such interest
has been paid or duly provided for, from October 10, 1997, but if interest
has been paid on or duly provided for with respect to such New Notes, then
from the most recent Interest Payment Date to which interest has been paid
or duly provided for. The New Notes of each series will bear interest at
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the rate per annum shown in the title thereof, payable semi-annually in
arrears on April 1 and October 1 in each year. Interest will be paid to
the persons in whose names New Notes are registered at the close of
business on the 15th day of the calendar month next preceding each semi-
annual interest payment date. The amount of interest payable for any
period will be computed on the basis of a 360-day year of twelve 30-day
months and for any period shorter than a full month, on the basis of the
actual number of days elapsed (Section 310). In the event that any date on
which interest is payable on a series of the New Notes is not a Business
Day, then payment of the interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), with the same force and effect
as if made on the date the payment was originally payable (Section 113).
Principal and interest payments on the New Notes will be made by the
Company to Cede & Co. (as nominee of DTC) so long as Cede & Co. is the
registered owner. Disbursement of such payments to the DTC Participants is
the responsibility of DTC, and disbursement of such payments to the
beneficial owners of the New Notes is the responsibility of DTC
Participants and Indirect Participants, all as described below under "Book-
Entry."
REDEMPTION
The New Notes will be redeemable as a whole at any time or in part, from
time to time, at the option of the Company, at a redemption price equal to
the sum of (a) the greater of (i) 100% of the principal amount of such New
Notes and (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon from the redemption date to the
maturity date, computed by discounting such payments, in each case, to the
redemption date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate, plus 5 basis points, plus
(b) accrued interest on the principal amount thereof to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of such New Notes to be redeemed that
would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such New Notes.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on
the third Business Day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, the average of the Reference Treasury Dealer Quotations
actually obtained by the Trustee for such redemption date. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee,
of the bid and asked prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third
Business Day preceding such redemption date.
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"Reference Treasury Dealer" means each of Lehman Brothers Inc., Citicorp
Securities, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
their respective successors; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but no more
than 60 days before the redemption date to each registered Holder of New
Notes to be redeemed. If, at the time notice of redemption is given, the
redemption moneys are not held by the Trustee, the redemption may be made
subject to their receipt on or before the date fixed for redemption and
such notice shall be of no effect unless such moneys are so received.
Upon payment of the redemption price, on and after the redemption date
interest will cease to accrue on the New Notes or portions thereof called
for redemption.
PAYMENT AND PAYING AGENTS
Interest on each New Note on each Interest Payment Date will be paid to
the Person in whose name such New Note is registered as of the close of
business on the Regular Record Date relating to such Interest Payment Date;
provided, however, that interest payable at maturity (whether at Stated
Maturity, upon redemption or otherwise, hereinafter a Maturity) will be
paid to the Person to whom principal is paid. However, if there has been a
default in the payment of interest on any New Note, such defaulted interest
may be payable to the Person in whose name such New Note is registered as
of the close of business on a date selected by the Trustee which is not
more than 15 days and not less than 10 days prior to the date proposed by
the Company for payment of such defaulted interest or in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which such New Note may be listed, if the Trustee deems such manner of
payment practicable (Indenture, Section 307).
The principal of and premium, if any, and interest on, the New Notes at
Maturity will be payable upon presentation of the New Notes at the
corporate trust office of The Bank of New York, in The City of New York, as
Paying Agent for the Company. The Company may change the Place of Payment
on the New Notes, may appoint one or more additional Paying Agents
(including the Company) and may remove any Paying Agent, all at its
discretion (Indenture, Section 602).
REGISTRATION AND TRANSFER
The transfer of New Notes may be registered, and New Notes may be
exchanged for other New Notes of the same series or Tranche, of authorized
denominations and of like tenor and aggregate principal amount, at the
corporate trust office of The Bank of New York in The City of New York, as
Security Registrar for the New Notes. The Company may change the place for
registration of transfer and exchange of the New Notes and may designate
one or more additional places for such registration and exchange, all at
its discretion. No service charge will be made for any transfer or
exchange of the New Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of the
New Notes. The Company will not be required to execute or to provide for
the registration of transfer of, or the exchange of, (a) any New Notes
during a period of 15 days prior to giving any notice of redemption or (b)
any New Notes selected for redemption in whole or in part, except the
unredeemed portion of any New Notes being redeemed in part (Indenture,
Section 305).
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DEFEASANCE
The principal amount of any series of Debt Securities issued under the
Indenture will be deemed to have been paid for purposes of the Indenture
and the entire indebtedness of the Company in respect thereof will be
deemed to have been satisfied and discharged if there will have been
irrevocably deposited with the Trustee or any Paying Agent, in trust: (a)
money in an amount which will be sufficient, or (b) in the case of a
deposit made prior to the maturity of the Debt Securities, Eligible
Obligations (as defined below), the principal of and the interest on which
when due, without any regard to reinvestment thereof, will provide moneys
which, together with the money, if any, deposited with or held by the
Trustee, will be sufficient, or (c) a combination of (a) and (b) which will
be sufficient, to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on the Debt Securities of such
series that are Outstanding. For this purpose, Eligible Obligations
include direct obligations of, or obligations unconditionally guaranteed
by, the United States entitled to the benefit of the full faith and credit
thereof and certificates, depositary receipts or other instruments which
evidence a direct ownership interest in such obligations or in any specific
interest or principal payments due in respect thereof and which do not
contain provisions permitting the redemption or other prepayment thereof at
the option of the issuer thereof.
PAYMENTS TO THE INSURER; SUBROGATION RIGHTS
In the event that the principal and/or interest due on the New Notes
shall be paid by the Insurer pursuant to the Policy, the New Notes shall
continue to be Outstanding within the meaning of the Indenture for all
purposes and the Insurer will be subrogated to the rights of the Holders of
such New Notes.
LIMITATION ON LIENS
The Indenture provides that, except as otherwise specified with respect
to a particular series of Debt Securities, so long as any Debt Securities
of any series are Outstanding, the Company will not pledge, mortgage,
hypothecate or grant a security interest in, or permit any mortgage,
pledge, security interest or other lien upon, any capital stock of any
Subsidiary (hereinafter defined) now or hereafter owned by the Company to
secure any Indebtedness (hereinafter defined), without making effective
provision whereby the Outstanding Debt Securities shall (so long as such
other Indebtedness shall be so secured) be equally and ratably secured with
any and all such other Indebtedness and any other indebtedness similarly
entitled to be equally and ratably secured. This restriction does not
apply to, or prevent the creation or existence of, (i) any mortgage,
pledge, security interest, lien or encumbrance upon any such capital stock
created at the time of the acquisition of such capital stock by the Company
or within one year after such time to secure all or a portion of the
purchase price for such capital stock; (ii) any mortgage, pledge, security
interest, lien or encumbrance upon any such capital stock existing thereon
at the time of the acquisition thereof by the Company (whether or not the
obligations secured thereby are assumed by the Company); or (iii) any
extension, renewal or refunding of any mortgage, pledge, security interest,
lien or encumbrance described in (i) or (ii) above on capital stock of any
Subsidiary theretofore subject thereto (or substantially the same capital
stock) or any portion thereof. In addition, this restriction will not
apply to, and there will be excluded in computing secured Indebtedness for
the purpose of such restriction, Indebtedness secured by any judgment,
levy, execution, attachment or other similar lien arising in connection
with court proceedings, provided that either (i) the execution or
enforcement of each such lien is effectively stayed within 30 days after
entry of the corresponding judgment (or the corresponding judgment has been
discharged within such 30 day period) and the claims secured thereby are
being contested in good faith by appropriate proceedings timely commenced
and diligently prosecuted; (ii) the payment of each such lien is covered in
full by insurance and the insurance company has not denied or contested
coverage thereof; or (iii) so long as each such lien is adequately bonded,
any appropriate legal proceedings that may have been duly initiated for the
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review of the corresponding judgment, decree or order shall not have been
fully terminated or the period within which such proceedings may be
initiated shall not have expired (Indenture, Section 608).
For purposes of the restriction described in the preceding paragraph,
"Indebtedness" means (i) all indebtedness, whether or not represented by
bonds, debentures, notes or other securities, created or assumed by the
Company for the repayment of money borrowed; (ii) all indebtedness for
money borrowed secured by a lien upon property owned by the Company and
upon which indebtedness for money borrowed the Company customarily pays
interest, although the Company has not assumed or become liable for the
payment of such indebtedness for money borrowed; and (iii) all indebtedness
of others for money borrowed which is guaranteed as to payment of principal
by the Company or in effect guaranteed by the Company through a contingent
agreement to purchase such indebtedness for money borrowed, but excluding
from this definition any other contingent obligation of the Company in
respect of indebtedness for money borrowed or other obligations incurred by
others (Indenture, Section 608). "Subsidiary" means a corporation more
than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock that ordinarily has voting power for
the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency
(Indenture, Section 101).
Notwithstanding the foregoing, except as otherwise specified in the
Officer's Certificate with respect to a particular series of Debt
Securities, the Company may, without securing the Debt Securities, pledge,
mortgage, hypothecate or grant a security interest in, or permit any
mortgage, pledge, security interest or other lien (in addition to liens
expressly permitted as described in the second preceding paragraph) upon,
capital stock of any Subsidiary now or hereafter owned by the Company to
secure any Indebtedness (which would otherwise be subject to the foregoing
restriction) in an aggregate amount which, together with all other such
Indebtedness, does not exceed 5% of Consolidated Capitalization. For this
purpose, "Consolidated Capitalization" means the sum obtained by adding (i)
Consolidated Shareholders' Equity, (ii) Consolidated Indebtedness for money
borrowed (exclusive of any thereof which is due and payable within one year
of the date such sum is determined) and, without duplication, (iii) any
preference or preferred stock of the Company or any Consolidated Subsidiary
which is subject to mandatory redemption or sinking fund provisions
(Indenture, Section 608).
The term "Consolidated Shareholders' Equity" (as used above) means the
total Assets of the Company and its Consolidated Subsidiaries less all
liabilities of the Company and its Consolidated Subsidiaries. As used in
the foregoing definition, "liabilities" means all obligations which would,
in accordance with generally accepted accounting principles in the United
States, be classified on a balance sheet as liabilities, including without
limitation, (i) indebtedness secured by property of the Company or any of
its Consolidated Subsidiaries whether or not the Company or such
Consolidated Subsidiary is liable for the payment thereof unless, in the
case that the Company or such Consolidated Subsidiary is not so liable,
such property has not been included among the Assets of the Company or such
Consolidated Subsidiary on such balance sheet, (ii) deferred liabilities
and (iii) indebtedness of the Company or any of its Consolidated
Subsidiaries that is expressly subordinated in right and priority of
payment to other liabilities of the Company or such Consolidated
Subsidiary. As used in this definition, "liabilities" includes preference
or preferred stock of the Company or any Consolidated Subsidiary only to
the extent of any such preference or preferred stock that is subject to
mandatory redemption or sinking fund provisions (Indenture, Section 608).
The term "Consolidated Subsidiary" (as used above) means at any date any
Subsidiary the financial statements of which under generally accepted
accounting principles would be consolidated with those of the Company in
its consolidated financial statements as of such date. The "Assets" of any
Person means the whole or any part of its business, property, assets, cash
and receivables. The term "Consolidated Indebtedness" means total
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indebtedness as shown on the consolidated balance sheet of the Company and
its Consolidated Subsidiaries (Indenture, Section 608).
As of September 30, 1997, the Consolidated Capitalization of the Company
was approximately $17,911,105,000.
ASSIGNMENT OF OBLIGATIONS
The Company may assign its obligations under any series of the Debt
Securities, including the New Notes, to a directly or indirectly wholly-
owned subsidiary of the Company pursuant to a written assumption of such
obligations by such subsidiary, provided that no Event of Default, or event
which with the passage of time or the giving of required notice, or both,
would become an Event of Default, has occurred and is continuing, and,
provided further that, with respect to the New Notes, in the absence of an
Insurer Default and as long as the Policy remains in effect, no such
assignment and assumption shall be made without the consent of the Insurer,
which consent shall not be unreasonably withheld. As conditions to such
assumption, the subsidiary assuming such obligations will be required to
deliver to the Trustee and to the Company an assumption agreement and a
supplemental indenture satisfactory in form and substance to the Trustee
pursuant to which such subsidiary (i) assumes, on a full recourse basis,
the Company's obligations on the Debt Securities and the obligations under
the Indenture relating to the Debt Securities, and (ii) agrees that any
covenants made by the Company with respect to such Debt Securities will
become solely covenants of, and shall relate to, such subsidiary. In
addition, such subsidiary shall assume the Company's obligations under the
Registration Rights Agreement.
At the time of such assumption the Company will unconditionally
guarantee payment of such series of Debt Securities and will execute a
guarantee in form and substance satisfactory to the Trustee. Pursuant to
such guarantee, the Company will fully and unconditionally guarantee the
payment of the obligations of the assuming subsidiary under the Debt
Securities and under the Indenture relating to the Debt Securities,
including, without limitation, payment, as and when due, of the principal
of, premium, if any, and interest on, the Debt Securities. The Company
will be released and discharged from all its other obligations under the
Indenture.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Under the terms of the Indenture, the Company may not consolidate with
or merge into any other entity or convey, transfer or lease its properties
and assets substantially as an entirety to any entity, unless (i) the
entity formed by such consolidation or into which the Company is merged or
the entity which acquires by conveyance or transfer, or which leases, the
property and assets of the Company substantially as an entirety will be a
entity organized and validly existing under the laws of any domestic
jurisdiction and such entity expressly assumes the Company's obligations on
all Debt Securities and under the Indenture, (ii) immediately after giving
effect to the transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, will
have occurred and be continuing, and (iii) the Company will have delivered
to the Trustee an Officer's Certificate and an Opinion of Counsel as
provided in the Indenture (Indenture, Section 1101). The terms of the
Indenture do not restrict the Company in a merger in which the Company is
the surviving entity.
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to the Debt Securities of any series: (a) failure
to pay any interest on the Debt Securities of such series within 30 days
after the same becomes due and payable; (b) failure to pay principal or
premium, if any, on the Debt Securities of such series when due and
payable; (c) failure to perform, or breach of, any other covenant or
warranty of the Company in the Indenture (other than a covenant or warranty
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of the Company in the Indenture solely for the benefit of one or more
series of Debt Securities other than such series) for 60 days after written
notice to the Company by the Trustee, or to the Company and the Trustee by
the Holders of at least 33% in principal amount of the Debt Securities of
such series Outstanding under the Indenture as provided in the Indenture;
(d) the entry by a court having jurisdiction in the premises of (1) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
by one or more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official for the Company or for any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any such decree
or order for relief or any such other decree or order will have remained
unstayed and in effect for a period of 90 consecutive days; and (e) the
commencement by the Company of a voluntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or order for
relief in respect of the Company in a case or other similar proceeding or
to the commencement of any bankruptcy or insolvency case or proceeding
against it under any applicable Federal or state law or the filing by it of
a petition or answer or consent seeking reorganization or relief under any
applicable Federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the authorization of such action by the Board of Directors (Indenture,
Section 801).
An Event of Default with respect to the Debt Securities of a particular
series may not necessarily constitute an Event of Default with respect to
Debt Securities of any other series issued under the Indenture.
REMEDIES
If an Event of Default due to the default in payment of principal of or
interest on any series of Debt Securities or due to the default in the
performance or breach of any other covenant or warranty of the Company
applicable to the Debt Securities of such series but not applicable to all
series occurs and is continuing, then either the Trustee or the holders of
33% in principal amount of the Outstanding Debt Securities of such series
may declare the principal of all of the Debt Securities of such series and
interest accrued thereon to be due and payable immediately. If an Event of
Default due to the default in the performance of any other covenants or
agreements in the Indenture applicable to all Outstanding Debt Securities
or due to certain events of bankruptcy, insolvency or reorganization of the
Company has occurred and is continuing, either the Trustee or the holders
of not less than 33% in principal amount of all Outstanding Debt
Securities, considered as one class, and not the holders of the Debt
Securities of any one of such series, may make such declaration of
acceleration. There is no automatic acceleration, even in the event of
bankruptcy, insolvency or reorganization of the Company.
At any time after the declaration of acceleration with respect to the
Debt Securities of any series has been made and before a judgment or decree
for payment of the money due has been obtained, the Event or Events of
Default giving rise to such declaration of acceleration will, without
further act, be deemed to have been waived, and such declaration and its
consequences will, without further act, be deemed to have been rescinded
and annulled, if
(a) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(1) all overdue interest on all Debt Securities of such series;
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(2) the principal of and premium, if any, on any Debt Securities of
such series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor
in such Debt Securities;
(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Debt Securities, to the extent that payment of such
interest is lawful; and
(4) all amounts due to the Trustee under the Indenture; and
(b) any other Event or Events of Default with respect to Debt
Securities of such series, other than the nonpayment of the principal of
the Debt Securities of such series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in the
Indenture (Indenture, Section 802).
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default will occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the holders,
unless such holders will have offered to the Trustee reasonable indemnity
(Indenture, Section 903). If an Event of Default has occurred and is
continuing in respect of a series of Debt Securities, subject to such
provisions for the indemnification of the Trustee, the holders of a
majority in principal amount of the Outstanding Debt Securities of such
series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Debt Securities of such series; provided, however, that if an Event of
Default occurs and is continuing with respect to more than one series of
Debt Securities, the holders of a majority in aggregate principal amount of
the Outstanding Debt Securities of all such series, considered as one
class, will have the right to make such direction, and not the holders of
the Debt Securities of any one of such series; and provided, further, that
such direction will not be in conflict with any rule of law or with the
Indenture (Indenture, Section 812).
No Holder of Debt Securities of any series will have any right to
institute any proceeding with respect to the Indenture, or for the
appointment of a receiver or a trustee, or for any other remedy thereunder,
unless (i) such holder has previously given to the Trustee written notice
of a continuing Event of Default with respect to the Debt Securities of
such series, (ii) the holders of not less than a majority in aggregate
principal amount of the Outstanding Debt Securities of all series in
respect of which an Event of Default will have occurred and be continuing,
considered as one class, have made written request to the Trustee, and such
holder or holders have offered reasonable indemnity to the Trustee to
institute such proceeding in respect of such Event of Default in its own
name as trustee and (iii) the Trustee has failed to institute any
proceeding, and has not received from the holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of such
series a direction inconsistent with such request, within 60 days after
such notice, request and offer (Indenture, Section 807). However, such
limitations do not apply to a suit instituted by a holder of a Debt
Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date
specified in such Debt Security (Indenture, Section 808).
In the absence of an Insurer Default and as long as the Policy remains
in effect, without the consent of the Insurer, which consent shall not be
unreasonably withheld, (i) no acceleration of the New Notes upon the
occurrence of an Event of Default may be declared and (ii) the Trustee may
not waive a default or annul a declaration that the principal of the New
Notes and interest thereon are immediately due and payable. For the
purposes of the provisions of the Indenture governing the enforcement of
remedies available to the holders of New Notes, the Insurer shall be deemed
to be the sole holder of the New Notes except with respect to the
acceleration of the New Notes upon the occurrence of an Event of Default
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and except with respect to the right of each holder of New Notes to
initiate suit for the enforcement of the payment of the principal of, and
premium, if any, and interest on the New Notes at and after the due dates
thereof.
The Company will be required to furnish to the Trustee annually a
statement by an appropriate officer as to such officer's knowledge of the
Company's compliance with all conditions and covenants under the Indenture,
such compliance to be determined without regard to any period of grace or
requirement of notice under the Indenture (Indenture, Section 606).
MODIFICATION AND WAIVER
Without the consent of any holder of Debt Securities, the Company and
the Trustee may enter into one or more supplemental indentures for any of
the following purposes: (a) to evidence the assumption by any permitted
successor to the Company of the covenants of the Company in the Indenture
and in the Debt Securities; or (b) to add one or more covenants of the
Company or other provisions for the benefit of all holders or for the
benefit of the holders of, or to remain in effect only so long as there
will be Outstanding, Debt Securities of one or more specified series, or
one or more specified Tranches thereof, or to surrender any right or power
conferred upon the Company by the Indenture; or (c) to add any additional
Events of Default with respect to Outstanding Debt Securities; or (d) to
change or eliminate any provision of the Indenture or to add any new
provision to the Indenture, provided that if such change, elimination or
addition will adversely affect the interests of the holders of Debt
Securities of any series or Tranche in any material respect, such change,
elimination or addition will become effective with respect to such series
or Tranche only (1) when the consent of the holders of Debt Securities of
such series or Tranche has been obtained in accordance with the Indenture,
or (2) when no Debt Securities of such series or Tranche remain Outstanding
under the Indenture; or (e) to provide collateral security for all but not
part of the Debt Securities; or (f) to establish the form or terms of Debt
Securities of any other series or Tranche as permitted by the Indenture; or
(g) to provide for the authentication and delivery of bearer securities and
coupons appertaining thereto representing interest, if any, thereon and for
the procedures for the registration, exchange and replacement thereof and
for the giving of notice to, and the solicitation of the vote or consent
of, the holders thereof, and for any and all other matters incidental
thereto; or (h) to evidence and provide for the acceptance of appointment
of a successor Trustee with respect to the Debt Securities of one or more
series and to add to or change any of the provisions of the Indenture as
will be necessary to provide for or to facilitate the administration of the
trusts under the Indenture by more than one trustee; or (i) to provide for
the procedures required to permit the utilization of a noncertificated
system of registration for the Debt Securities of all or any series or
Tranche; or (j) to change any place where (1) the principal of and premium,
if any, and interest, if any, on all or any series or Tranche of Debt
Securities will be payable, (2) all or any series or Tranche of Debt
Securities may be surrendered for registration of transfer or exchange and
(3) notices and demands to or upon the Company in respect of Debt
Securities and the Indenture may be served; or (k) to cure any ambiguity or
inconsistency or to add or change any other provisions with respect to
matters and questions arising under the Indenture, provided such changes or
additions will not adversely affect the interests of the holders of Debt
Securities of any series or Tranche in any material respect (Indenture,
Section 1201).
The holders of a majority in aggregate principal amount of the Debt
Securities of all series then Outstanding may waive compliance by the
Company with certain restrictive provisions of the Indenture (Indenture,
Section 607). The holders of not less than a majority in principal amount
of the Outstanding Debt Securities of any series may waive any past default
under the Indenture with respect to such series, except a default in the
payment of principal, premium, or interest and certain covenants and
provisions of the Indenture that cannot be modified or be amended without
the consent of the holder of each Outstanding Debt Security of such series
affected (Indenture, Section 813).
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Without limiting the generality of the foregoing, if the Trust Indenture
Act is amended after the date of the Indenture in such a way as to require
changes to the Indenture or the incorporation therein of additional
provisions or so as to permit changes to, or the elimination of, provisions
which, at the date of the Indenture or at any time thereafter, were
required by the Trust Indenture Act to be contained in the Indenture, the
Indenture will be deemed to have been amended so as to conform to such
amendment of the Trust Indenture Act or to effect such changes, additions
or elimination, and the Company and the Trustee may, without the consent of
any holders, enter into one or more supplemental indentures to evidence or
effect such amendment (Indenture, Section 1201).
Except as provided above, the consent of the holders of a majority in
aggregate principal amount of the Debt Securities of all series then
Outstanding, considered as one class, is required for the purpose of adding
any provisions to, or changing in any manner, or eliminating any of the
provisions of, the Indenture or modifying in any manner the rights of the
holders of such Debt Securities under the Indenture pursuant to one or more
supplemental indentures; provided, however, that if less than all of the
series of Debt Securities Outstanding are directly affected by a proposed
supplemental indenture, then the consent only of the holders of a majority
in aggregate principal amount of Outstanding Debt Securities of all series
so directly affected, considered as one class, will be required; and
provided, further, that if the Debt Securities of any series will have been
issued in more than one Tranche and if the proposed supplemental indenture
will directly affect the rights of the holders of Debt Securities of one or
more, but less than all, of such Tranches, then the consent only of the
holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of all Tranches so directly affected, considered as one class,
will be required; and provided, further, that, in the absence of an Insurer
Default and as long as the Policy is in effect, no such amendment may
become effective without the consent of the Insurer, which consent shall
not be unreasonably withheld; and provided further, that no such amendment
or modification may (a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Debt Security, or
reduce the principal amount thereof or the rate of interest thereon (or the
amount of any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable upon the redemption
thereof, or change the coin or currency (or other property) in which any
Debt Security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity of any Debt Security (or, in the case of
redemption, on or after the redemption date) without, in any such case, the
consent of the holder of such Debt Security, (b) reduce the percentage in
principal amount of the Outstanding Debt Security of any series, or any
Tranche thereof, the consent of the holders of which is required for any
such supplemental indenture, or the consent of the holders of which is
required for any waiver of compliance with any provision of the Indenture
or any default thereunder and its consequences, or reduce the requirements
for quorum or voting, without, in any such case, the consent of the holder
of each Outstanding Debt Security of such series or Tranche, or (c) modify
certain of the provisions of the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults with
respect to the Debt Security of any series or Tranche, without the consent
of the holder of each Outstanding Debt Security affected thereby. A
supplemental indenture which changes or eliminates any covenant or other
provision of the Indenture which has expressly been included solely for the
benefit of one or more particular series of Debt Securities or one or more
Tranches thereof, or modifies the rights of the holders of Debt Securities
of such series with respect to such covenant or other provision, will be
deemed not to affect the rights under the Indenture of the holders of the
Debt Securities of any other series or Tranche (Indenture, Section 1202).
The Indenture provides that in determining whether the holders of the
requisite principal amount of the Outstanding Debt Securities have given
any request, demand, authorization, direction, notice, consent or waiver
under the Indenture, or whether a quorum is present at the meeting of the
holders of Debt Securities, Debt Securities owned by the Company or any
other obligor upon the Debt Securities or any affiliate of the Company or
of such other obligor (unless the Company, such affiliate or such obligor
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owns all Debt Securities Outstanding under the Indenture, determined
without regard to this provision) will be disregarded and deemed not to be
Outstanding.
If the Company shall solicit from holders any request, demand,
authorization, direction, notice, consent, election, waiver or other Act,
the Company may, at its option, fix in advance a record date for the
determination of holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other such act, but
the Company will have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the holders of record at the close of business on such record date will be
deemed to be holders for the purposes of determining whether holders of the
requisite proportion of the Outstanding Debt Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the Outstanding
Debt Securities will be computed as of the record date. Any request,
demand, authorization, direction, notice, consent, election, waiver or
other Act of a holder will bind every future holder of the same Debt
Security and the holder of every Debt Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect
of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made
upon such Debt Security (Indenture, Section 104).
RESIGNATION OF TRUSTEE
The Trustee may resign at any time by giving written notice thereof to
the Company or may be removed at any time by Act of the holders of a
majority in principal amount of all series of Debt Securities then
Outstanding delivered to the Trustee and the Company. No resignation or
removal of the Trustee and no appointment of a successor trustee will
become effective until the acceptance of appointment by a successor trustee
in accordance with the requirements of the Indenture. So long as no Event
of Default or event which, after notice or lapse of time, or both, would
become an Event of Default has occurred and is continuing and except with
respect to a Trustee appointed by Act of the holders, if the Company has
delivered to the Trustee a resolution of its Board of Directors appointing
a successor trustee and such successor has accepted such appointment in
accordance with the terms of the Indenture, the Trustee will be deemed to
have resigned and the successor will be deemed to have been appointed as
trustee in accordance with the Indenture (Indenture, Section 910).
NOTICES
Notices to holders of Debt Securities will be given by mail to the
addresses of such holders as they may appear in the security register
therefor.
TITLE
The Company, the Trustee, and any agent of the Company or the Trustee,
may treat the Person in whose name Debt Securities are registered as the
absolute owner thereof (whether or not such Debt Securities may be overdue)
for the purpose of making payments and for all other purposes irrespective
of notice to the contrary.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York.
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REGARDING THE TRUSTEE
The Trustee under the Indenture is The Bank of New York. The
Company and certain of its subsidiaries also maintain various
banking and trust relationships with The Bank of New York.
BOOK-ENTRY ONLY - THE DEPOSITORY TRUST COMPANY
The certificates representing the New Notes will be issued in
fully registered form, without coupons. The New Notes will be
deposited with, or on behalf of, DTC, and registered in the name
of Cede & Co., as DTC's nominee in the form of one or more Global
Certificates for each series of New Notes or will remain in the
custody of the Trustee pursuant to a FAST Balance Certificate
Agreement between DTC and the Trustee. Upon the issuance of the
Global Certificates, DTC or its custodian will credit, on its
internal system, the respective principal amount of the
individual beneficial interests represented by such Global
Certificates to the accounts of persons who have accounts with
such depositary. Ownership of beneficial interests in a Global
Certificate will be limited to persons who have accounts with DTC
(participants) or persons who hold interests through
participants. Ownership of beneficial interests in a Global
Certificate will be shown on, and the transfer of that ownership
will be effected only through, records maintained by DTC or its
nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons
other than participants).
So long as DTC, or its nominee, is the registered owner or
Holder of a Global Certificate, DTC or such nominee, as the case
may be, will be considered the sole owner or Holder of the New
Notes represented by such Global Certificate for all purposes
under the Indenture and the New Notes. No beneficial owner of an
interest in a Global Certificate will be able to transfer the
interest except in accordance with DTC's applicable procedures,
in addition to those provided for under the Indenture.
Payments of the principal of, and interest on, a Global
Certificate will be made to DTC or its nominee, as the case may
be, as the registered owner thereof. Neither the Company, the
Trustee nor any Paying Agent will have any responsibility or
liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in a Global
Certificate or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. DTC or
its nominee, upon receipt of any payment of principal or interest
in respect of a Global Certificate, will credit participants'
accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such
Global Certificate as shown on the records of DTC or its nominee.
The Company also expects that payments by participants to owners
of beneficial interests in such Global Certificate held through
such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for
the accounts of customers registered in the names of nominees for
such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in
the ordinary way in accordance with DTC rules.
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DTC will take any action permitted to be taken by a Holder
of New Notes (including the presentation of New Notes for
exchange as described below) only at the direction of one or more
participants to whose account the DTC interests in a Global
Certificate is credited and only in respect of such portion of
the aggregate principal amount of the New Notes as to which such
participant or participants has or have given such direction.
However, if there is an Event of Default (as defined) under the
New Notes, DTC will exchange a Global Certificate for
certificated notes, which it will distribute to its participants.
DTC is a limited purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the
need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other
organizations. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a
participant, either directly or indirectly (indirect
participants). The rules applicable to DTC and its participants
are on file with the Commission.
Although DTC is expected to follow the foregoing procedures
in order to facilitate transfers of interests in the Global Notes
among their respective participants, they are under no obligation
to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company
nor the Trustee will have any responsibility for the performance
by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing
their operations.
If DTC is at any time unwilling or unable to continue as a
depositary for a Global Certificate and a successor depositary is
not appointed by the Company within 90 days, the Company will
issue certificated notes in exchange for a Global Certificate.
Secondary trading in long-term bonds and notes of corporate
issuers is generally settled in clearing house or next day funds.
In contrast, beneficial interests in the New Notes that are not
Certificated Notes, as defined below, will trade in DTC's Same-
Day Funds Settlement System until maturity. Therefore, the
secondary market trading activity in such interests will settle
in immediately available funds. No assurance can be given as to
the effect, if any, of settlement in immediately available funds
on trading activity in the New Notes.
The information under this caption "Book-Entry" concerning
DTC and DTC's book-entry system has been obtained from sources
that the Company believes to be reliable, but the Company does
not take any responsibility for the accuracy thereof.
CERTIFICATED NOTES
If (i) the Company notifies the Trustee in writing that the DTC is no
longer willing or able to act as a depositary and the Company is unable to
locate a qualified successor within 90 days or (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the
issuance of New Notes in the form of Certificated Notes under the
Indenture, then, upon surrender by the DTC of its Global Notes, New
Notes in such form will be issued to each person that the Global
Note Holder and the DTC identify as being the beneficial owner of the
related New Notes.
Neither the Company nor the Trustee will be liable for any delay by the
DTC in identifying the Beneficial Owners of New Notes and the Company and
the Trustee may conclusively rely on, and will be protected in relying on,
instructions from the DTC for all purposes.
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SAME-DAY SETTLEMENT AND PAYMENT
The Indenture will require that payments in respect of the New Notes
represented by the Global Note (including principal, premium, if any, and
interest, if any) be made in immediately available funds. With respect to
Certificated Notes, however, the Company will make all payments of
principal, premium, if any, interest, if any, by mailing a check to each
Holder's registered address. The Company expects that secondary trading in
the Certificated Notes will also be settled in immediately available funds.
LACK OF PUBLIC MARKET
The New Notes are new issues of securities for which there is currently
no active trading market. If any New Notes are traded after their initial
issuance, they may trade at a discount from their face value, depending
upon prevailing interest rates, the market for similar securities and other
factors, including general economic conditions and the financial condition,
performance of, and the prospects for the Company.
NEW NOTE INSURANCE
While a separate Policy will be issued in connection with each series of
New Notes, such Policies are identical except for references to the title,
maturity date and interest rate of the New Notes. References in this
section to Policy, Paying Agent and New Notes should be read as a referring
to each series of New Notes as a separate series. The Policy with respect
to each series of New Notes is identical to the Policy with respect to the
corresponding series of Old Notes, except for references to the titles of
the securities.
The following information has been furnished by the Insurer for use in
this Prospectus. Reference is made to Appendix I for a specimen of the
Policy. The Company does not assume any responsibility for the information
regarding the Insurer or the Policy contained, or incorporated by
reference, herein.
The Policy unconditionally and irrevocably guarantees the full and
complete payment required to be made by or on behalf of the Company (or any
wholly owned subsidiary to whom the Company has assigned New Notes with the
consent of the Insurer) to the Paying Agent or its successor of an amount
equal to (i) the principal of (at the stated maturity) and interest on the
New Notes as such payments shall become due but shall not be so paid
(except that in the event of any acceleration of the due date of such
principal by reason of optional redemption or acceleration resulting from
default or otherwise, the payments guaranteed by the Policy shall be made
in such amounts and at such times as such payments of principal would have
been due had there not been any such acceleration); and (ii) the
reimbursement of any such payment which is subsequently recovered from any
owner of the New Notes pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law (Preference).
The Policy does not insure against loss of any prepayment premium which
may at any time be payable with respect to any New Note. The Policy does
not, under any circumstance, insure against loss relating to: (i) optional
redemptions; (ii) any payments to be made on an accelerated basis; (iii)
payments of the purchase price of the New Notes upon tender by an owner
thereof; or (iv) any Preference relating to (i) through (iii) above. The
Policy also does not insure against nonpayment of principal of or interest
on the New Notes resulting from the insolvency, negligence or any other act
or omission of the Paying Agent or any other paying agent for the New
Notes.
Upon receipt of telephonic or telegraphic notice, such notice
subsequently confirmed in writing by registered or certified mail, or upon
receipt of written notice by registered or certified mail, by the Insurer
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from the Paying Agent or any owner of a New Note the payment of an insured
amount for which is then due, that such required payment has not been made,
the Insurer on the due date of such payment or within one business day
after receipt of notice of such nonpayment, whichever is later, will make a
deposit of funds, in an account with State Street Bank and Trust Company,
N.A., in New York, New York, or its successor, sufficient for the payment
of any such insured amounts which are then due. Upon presentment and
surrender of such New Notes or presentment of such other proof of ownership
of the New Notes, together with any appropriate instruments of assignment
to evidence the assignment of the insured amounts due on the New Notes as
are paid by the Insurer, and appropriate instruments to effect the
appointment of the Insurer as agent for such owners of the New Notes in any
legal proceeding related to payment of insured amounts on the New Notes,
such instruments being in a form satisfactory to State Street Bank and
Trust Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the insured amounts
due on such New Notes, less any amount held by the Paying Agent for the
payment of such insured amounts and legally available therefor.
The Insurer is the principal operating subsidiary of MBIA Inc., a New
York Stock Exchange listed company. MBIA Inc. is not obligated to pay the
debts of or claims against the Insurer. The Insurer is domiciled in the
State of New York and licensed to do business in and subject to regulation
under the laws of all 50 states, the District of Columbia, the Commonwealth
of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the
Virgin Islands of the United States and the Territory of Guam. The Insurer
has two European branches, one in the Republic of France and the other in
the Kingdom of Spain. New York has laws prescribing minimum capital
requirements, limiting classes and concentrations of investments and
requiring the approval of policy rates and forms. State laws also regulate
the amount of both the aggregate and individual risks that may be insured,
the payment of dividends by the Insurer, changes in control and
transactions among affiliates. Additionally, the Insurer is required to
maintain contingency reserves on its liabilities in certain amounts and for
certain periods of time.
On November 14, 1997, MBIA Inc. announced the signing of a definitive
agreement to merge with CapMAC Holdings Inc. (CHI), the parent company of
Capital Markets Assurance Corporation (CapMAC), in a stock-for-stock
transaction. The announcement also stated that all outstanding policies
issued by CapMAC will be backed by the full financial resources of MBIA
Inc. and that the agreement is subject to regulatory approvals and approval
by CHI shareholders.
The consolidated financial statements of the Insurer, a wholly owned
subsidiary of MBIA Inc., and its subsidiaries as of December 31, 1996 and
December 31, 1995 and for the three years ended December 31, 1996, prepared
in accordance with generally accepted accounting principles (GAAP),
included in the Annual Report on Form 10-K of MBIA Inc. for the year ended
December 31, 1996 and the consolidated financial statements of the Insurer
and its subsidiaries as of September 30, 1997 and for the period ending
September 30, 1997 and September 30, 1996 included in the Quarterly Report
on Form 10-Q of MBIA Inc. for the period ending September 30, 1997 are
hereby incorporated by reference into this Prospectus and shall be deemed
to be a part hereof. Any statement contained in a document incorporated by
reference herein shall be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
All financial statements of the Insurer and its subsidiaries included in
documents filed by MBIA Inc. pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the New Notes shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from
the respective dates of filing such documents.
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<PAGE>
The tables below present selected financial information of the Insurer
determined in accordance with statutory accounting practices prescribed or
permitted by insurance regulatory authorities (SAP) and GAAP:
SAP
----------------------------------------
DECEMBER 31, 1996 SEPTEMBER 30, 1997
------------------- -------------------
(AUDITED) (UNAUDITED)
(IN MILLIONS)
Admitted Assets . . $4,476 $5,165
Liabilities . . . . 3,009 3,457
Capital and Surplus 1,467 1,708
GAAP
---------------------------------------
DECEMBER 31, 1996 SEPTEMBER 30, 1997
------------------ -------------------
(AUDITED) (UNAUDITED)
(IN MILLIONS)
Assets . . . . . . . $5,066 $5,819
Liabilities . . . . . 2,262 2,594
Shareholder's Equity 2,804 3,225
Copies of the financial statements of the Insurer incorporated by
reference herein and copies of the Insurer's 1996 year-end audited
financial statements prepared in accordance with SAP are available, without
charge, from the Insurer. The address of the Insurer is 113 King Street,
Armonk, New York 10504. The telephone number of the Insurer is (914) 273-
4545.
The Insurer does not accept any responsibility for the accuracy or
completeness of this Prospectus or any information or disclosure contained
herein, or omitted herefrom, other than with respect to the accuracy of the
information regarding the Policy and the Insurer set forth under this
heading NEW NOTE INSURANCE. Additionally, the Insurer makes no
representation regarding the New Notes or the advisability of exchanging
Old Notes for New Notes or otherwise investing in New Notes.
Moody's Investors Service, Inc. rates the claims paying ability of the
Insurer "Aaa."
Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. rates the claims paying ability of the Insurer "AAA."
Fitch IBCA, Inc. (formerly known as Fitch Investors Service, L.P.) rates
the claims paying ability of the Insurer "AAA."
The above ratings are not recommendations to buy, sell or hold the New
Notes, and such ratings may be subject to revision or withdrawal at any
time by the rating agencies. Any downward revision or withdrawal of any of
the above ratings may have an adverse effect on the market price of the New
34
<PAGE>
Notes. The Insurer does not guarantee the market price of the New Notes
nor does it guarantee that the ratings of the claims paying ability of the
Insurer will not be revised or withdrawn.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION: In the event the Insurer is
unable to fulfill its contractual obligation under a policy or contract or
application or certificate or evidence of coverage, the policyholder or
certificateholder is not protected by an insurance guaranty fund or other
solvency protection arrangement.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences of the purchase, ownership and disposition of the New Notes as
of the date hereof and represents the opinion of Reid & Priest LLP, counsel
to the Company, insofar as it relates to matters of law or legal
conclusions. Except where noted, it deals only with New Notes held as
capital assets and does not deal with special situations, such as those of
dealers in securities or currencies, financial institutions, life insurance
companies, persons holding New Notes as a part of a hedging or conversion
transaction or a straddle, or persons who are not United States Holders (as
defined herein). In addition, this discussion does not address the tax
consequences to persons who acquire New Notes other than pursuant to their
initial issuance and distribution. Furthermore, the discussion below is
based upon the provisions of the Internal Revenue Code of 1986, as amended,
and regulations, rulings and judicial decisions thereunder as of the date
hereof, and such authorities may be repealed, revoked or modified at any
time, with either forward-looking or retroactive effect, so as to result in
United States federal income tax consequences different from those
discussed below.
PROSPECTIVE HOLDERS OF NEW NOTES, INCLUDING PERSONS WHO ARE NOT UNITED
STATES HOLDERS AND PERSONS WHO PURCHASE NEW NOTES IN THE SECONDARY MARKET,
ARE ADVISED TO CONSULT WITH THEIR TAX ADVISORS AS TO THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF NEW NOTES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
UNITED STATES HOLDERS
As used herein, a "United States Holder" means a Holder of a New Note
that is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of
the United States or any political subdivision thereof, an estate, the
income of which is subject to United States federal income taxation
regardless of its source, or a trust, the administration of which is
subject to the primary supervision of a court within the United States and
for which one or more United States persons have the authority to
control all substantial decisions.
PAYMENTS OF INTEREST
Stated interest on a New Note will generally be taxable to a United
States Holder as ordinary income at the time it is paid or accrued in
accordance with the United States Holder's method of accounting for
tax purposes.
EXCHANGE OF OLD NOTES FOR NEW NOTES
An exchange of the Old Notes for the New Notes should not constitute a
taxable event for federal income tax purposes because the New Notes should
not be considered to differ materially in kind or extent from the Old
35
<PAGE>
Notes. Rather, the New Notes should be treated as a continuation of the
Old Notes in the hands of a Holder. As a result, Holders who exchange
their Old Notes for New Notes should not recognize any income, gain or loss
for federal income tax purposes with respect to such exchange. The
following discussion assumes that an exchange of Old Notes for New Notes
will not be treated as a taxable exchange for federal income tax purposes.
SALE, EXCHANGE AND REDEMPTION OF THE NEW NOTES
Upon the sale, exchange or redemption of New Notes, a United States
Holder will recognize gain or loss equal to the difference between such
Holder's adjusted tax basis in the New Notes and the amount realized upon
the sale, exchange or redemption, other than amounts attributable to
accrued but unpaid interest. A United States Holder's adjusted tax basis
will be, in general, the issue price of the New Notes. Such gain or loss
will be capital gain or loss and will be long-term capital gain or loss if
at the time of sale or redemption, the New Notes have been held for more
than 18 months. Under current law, deductibility of capital losses is
subject to limitations. The net capital gains of individuals are taxed,
under certain circumstances, at lower rates than ordinary income.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Subject to the qualification discussed below, income on the New Notes
will be reported to Holders on Forms 1099, which should be mailed to such
Holders by January 31 following each calendar year.
The Company will report annually to Cede & Co. the interest income paid
during the year with respect to the New Notes for which Cede & Co. is the
Holder of record. The Company currently intends to report such information
on Form 1099 prior to January 31 following each calendar year. The Initial
Purchasers have indicated to the Company that, to the extent that they hold
New Notes as nominee for beneficial Holders, they currently expect to
report the interest income paid during the calendar year on such New Notes
to such beneficial Holders on Forms 1099 by January 31 following each
calendar year. Under current law, Holders of New Notes who hold as
nominees for beneficial Holders will not have any obligation to report
information regarding the beneficial Holders to the Company. The Company,
moreover, will not have any obligation to report to beneficial Holders who
are not also record Holders. Thus, beneficial Holders of New Notes who
hold their New Notes through the Initial Purchasers will receive Forms 1099
reflecting the income on their New Notes from such nominee Holders rather
than from the Company.
Payments made in respect of, and proceeds from the sale, exchange or
redemption of, New Notes may be subject to "backup" withholding tax of
31% if the Holder fails to comply with certain identification
requirements, or has previously failed to report in full dividend
and interest income, or does not otherwise establish its entitlement
to an exemption. Any withheld amounts will be allowed as a refund or
a credit against the Holder's United States federal income tax liability;
provided, however, that certain required information is provided to the
Internal Revenue Service.
PLAN OF DISTRIBUTION
Except as described below, a broker-dealer may not participate in the
Exchange Offer in connection with a distribution of the New Notes. Each
broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange
for Old Notes where such Old Notes were acquired as a result of
market-making activities or other trading activities. The Company has
agreed that for a period not to exceed 90 days, it will make this
Prospectus, as amended or supplemented, available to any broker-dealer for
36
<PAGE>
use in connection with any such resale. In addition, until
____________ ___, 1998 all dealers effecting transactions in the New Notes
may be required to deliver a prospectus.
The Company will not receive any proceeds from the Exchange Offer or any
sale of New Notes by broker-dealers. New Notes received by broker-dealers
for their own account pursuant to the Exchange Offer may be sold from time
to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Notes or
a combination of such methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or
negotiated prices. Any such resale may be made directly to purchasers or
to or through brokers or dealers who may receive compensation in the form
of commissions or concessions from any such broker-dealer and/or the
purchasers of any such New Notes. Any broker-dealer that resells New Notes
that were received by it for its own account pursuant to the Exchange Offer
and any broker or dealer that participates in a distribution of such New
Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. Any broker or dealer
registered under the Exchange Act who holds Old Notes that are Registrable
Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than
Registrable Securities acquired directly from the Company) may exchange
such Old Notes pursuant to the Exchange Offer; however, such broker or
dealer may be deemed to be an "underwriter" within the meaning of the
Securities Act and must, therefore, deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of the
New Notes received by such broker or dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
broker or dealer of this Prospectus. The Letter of Transmittal states that
by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act.
The Company has agreed to pay the expenses of registration of the New
Notes and will indemnify the Holders of the New Notes (including any
broker-dealers) against certain liabilities, including liabilities under
the Securities Act.
Prior to the Exchange Offer, there has been no public market for the Old
Notes. The Company does not intend to apply for listing of the New Notes
on any securities exchange or for inclusion of such securities in any
automated quotation system. There can be no assurance that an active
market for the New Notes will develop. To the extent that a market for the
New Notes does develop, the market value of the New Notes will depend on
market conditions (including yields on alternative investments), general
economic conditions, the Company's financial condition and other
conditions. Such conditions might cause the New Notes, to the extent that
they are actively traded, to trade at a significant discount from face
value. The Company has not entered into any arrangement or understanding
with any person to distribute the New Notes to be received in the Exchange
Offer.
The Company has not agreed to compensate broker-dealers who effect the
exchange of Old Notes on behalf of Holders.
EXPERTS
The consolidated financial statements included in the TEI 10-K,
incorporated herein by reference, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report included in the
TEI 10-K, and have been incorporated by reference herein in reliance upon
such report given upon the authority of that firm as experts in accounting
and auditing.
37
<PAGE>
With respect to the unaudited condensed consolidated interim financial
information included in TEI's Quarterly Reports on Form 10-Q that are or
will be incorporated herein by reference, Deloitte & Touche LLP has applied
limited procedures in accordance with professional standards for reviews of
such information. As stated in their reports included in TEI's and the
Company's Quarterly Reports on Form 10-Q, Deloitte & Touche LLP did not
audit and they did not express an opinion on such interim financial
information. Accordingly, the degree of reliance on any of its reports on
such information should be restricted in light of the limited nature of the
review procedures applied. Deloitte & Touche LLP is not subject to the
liability provisions of Section 11 of the Securities Act, for their reports
on such unaudited interim financial information because such reports are
not "reports" or a "part" of the Registration Statement filed under the Act
with respect to the Common Stock offered hereby ("Registration Statement"),
that were prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securities Act.
The consolidated financial statements included in ENSERCH 10-K,
incorporated herein by reference, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report included in such
ENSERCH 10-K, and have been incorporated by reference herein in reliance
upon such report given upon the authority of that firm as experts in
accounting and auditing.
With respect to the unaudited condensed consolidated interim financial
information included in ENSERCH's Quarterly Reports on Form 10-Q that are
incorporated herein by reference, Deloitte & Touche LLP has applied limited
procedures in accordance with professional standards for reviews of such
information. As stated in their reports included in ENSERCH's Quarterly
Reports on Form 10-Q, Deloitte & Touche LLP did not audit and they do not
express an opinion on such interim financial information. Accordingly, the
degree of reliance on any of its reports on such information should be
restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP is not subject to the liability provisions of Section
11 of the Securities Act for their reports on such unaudited interim
financial information because such reports are not "reports" or a "part" of
the Registration Statement prepared or certified by an accountant within
the meaning of Sections 7 and 11 of the Securities Act.
The consolidated financial statements of MBIA Insurance Corporation
and Subsidiaries as of December 31, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996 incorporated by reference into
this Prospectus have been audited by Coopers & Lybrand L.L.P., independent
accountants, as set forth in their report thereon incorporated by reference
herein in reliance upon the authority of such firm as experts in accounting
and auditing.
LEGAL MATTERS
The statements made as to matters of law and legal conclusions in the
TEI 10-K under Part I, Item 1 -- Business-Regulation and Rates, and
Environmental Matters, incorporated herein by reference, have been reviewed
by Worsham, Forsythe & Wooldridge, L.L.P., Dallas, Texas, General Counsel
for the Company. All of such statements are set forth, or have been
incorporated by reference, herein in reliance upon the opinion of that firm
given upon their authority as experts. At October 31, 1997, members of the
firm of Worsham, Forsythe & Wooldridge, L.L.P., owned approximately 41,200
shares of the Common Stock of the Company. The statements made as to
matters of law and legal conclusions in this Prospectus under CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES have been reviewed by Reid &
Priest LLP, New York, New York, and are set forth herein in reliance upon
the opinion of that firm given upon their authority as experts.
38
<PAGE>
The validity of the New Notes is being passed upon for the Company by
Worsham, Forsythe & Wooldridge, L.L.P. and by Reid & Priest LLP. Certain
legal matters will be passed upon for the Insurer by Kutak Rock, Omaha,
Nebraska. However, all matters pertaining to incorporation of the Company
and all other matters of Texas law relating to the Company will be passed
upon only by Worsham, Forsythe & Wooldridge, L.L.P.
39
<PAGE>
APPENDIX I
MBIA
FINANCIAL GUARANTY INSURANCE POLICY
MBIA Insurance Corporation
Armonk, New York 10504
Policy No.[NUMBER]
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment
of the premium and subject to the terms of this policy, hereby
unconditionally and irrevocably guarantees to any owner, as hereinafter
defined, of the following described obligations, the full and complete
payment required to be made by or on behalf of the Issuer to [PAYING
AGENT/TRUSTEE] or its successor (the "Paying Agent") of an amount equal to
(i) the principal of (either at the stated maturity or by any advancement
of maturity pursuant to a mandatory sinking fund payment) and interest on,
the Obligations (as that term is defined below) as such payments shall
become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or
optional redemption or acceleration resulting from default or otherwise,
other than any advancement of maturity pursuant to a mandatory sinking fund
payment, the payments guaranteed hereby shall be made in such amounts and
at such times as such payments of principal would have been due had there
not been any such acceleration); and (ii) the reimbursement of any such
payment which is subsequently recovered from any owner pursuant to a final
judgment by a court of competent jurisdiction that such payment constitutes
an avoidable preference to such owner within the meaning of any applicable
bankruptcy law. The amounts referred to in clauses (i) and (ii) of the
preceding sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations shall mean:
[PAR]
[LEGAL NAME OF ISSUE]
Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of
written notice by registered or certified mail, by the Insurer from the
Paying Agent or any owner of an Obligation the payment of an Insured Amount
for which is then due, that such required payment has not bee made, the
Insurer on the due date of such payment or within one business day after
receipt of notice of such nonpayment, whichever is later, will make a
deposit of funds, in an account with State Street Bank and Trust Company,
N.A., in New York, New York, or its successor, sufficient for the payment
of any such Insured Amounts which are then due. Upon presentment and
surrender of such Obligations or presentment of such other proof of
ownership of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due on the
Obligations as are paid by the Insurer, and appropriate instruments to
effect the appointment of the Insurer as agent for such owners of the
Obligations in any legal proceeding related to payment of Insured Amounts
on the Obligations, such instruments being in a form satisfactory to State
Street Bank and Trust Company, N.A., State Street Bank and Trust Company,
N.A. shall disburse to such owners, or the Paying Agent payment of the
Insured Amounts due on such Obligations, less any amount held by the Paying
Agent for the payment of such Insured Amounts and legally available
therefor. This policy does not insure against loss of any prepayment
premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the
Issuer, or any designee of the Issuer for such purpose. The term owner
shall not include the Issuer or any party whose agreement with the Issuer
constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its
offices located at 113 King Street, Armonk, New York 10504 and such service
of process shall be valid and binding.
This policy is non-cancellable for any reason. The premium on this policy
is not refundable for any reason including the payment prior to maturity of
the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this policy to be executed in
facsimile on its behalf by its duly authorized officers, this [DAY] day of
[MONTH, YEAR].
COUNTERSIGNED: MBIA Insurance Corporation
--SPECIMEN--
---------------------------- -----------------------------
Resident Licensed Agent President
---------------------------- Attest: -----------------------------
City, State Assistant Secretary
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION: In the event the Insurer is
unable to fulfill its contractual obligation under this policy or contract
or application or certificate or evidence or coverage, the policyholder or
certificateholder is not protected by an insurance guaranty fund or other
solvency protection arrangement.
I-1
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IX of the Restated Articles of Incorporation of the Company
provides as follows:
"The Corporation shall reimburse or indemnify any former, present or
future director, officer or employee of the Corporation, or any person
who may have served at its request as a director, officer or employee of
another corporation, or any former, present or future director, officer
or employee of the Corporation who shall have served or shall be serving
as an administrator, agent or fiduciary for the Corporation or for
another corporation at the request of the Corporation (and his heirs,
executors and administrators) from and against all expenses and
liabilities incurred by him or them, or imposed on him or them,
including, but not limited to, judgments, settlements, court costs and
attorneys' fees, in connection with, or arising out of, the defense of
any action, suit or proceeding in which he may be involved by reason of
his being or having been such director, officer or employee, except with
respect to matters as to which he shall be adjudged in such action, suit
or proceeding to be liable because he did not act in good faith, or
because of dishonesty or conflict of interest in the performance of his
duty.
"No former, present or future director, officer or employee of the
Corporation (or his heirs, executors and administrators) shall be liable
for any act, omission, step or conduct taken or had in good faith, which
is required, authorized or approved by any order or orders issued
pursuant to the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any other federal or state statute regulating the
Corporation or its subsidiaries, or any amendments to any thereof. In
any action, suit or proceeding based on any act, omission, step or
conduct, as in this paragraph described, the provisions hereof shall be
brought to the attention of the court. In the event that the foregoing
provisions of this paragraph are found by the court not to constitute a
valid defense, each such director, officer or employee (and his heirs,
executors and administrators) shall be reimbursed for, or indemnified
against, all expenses and liabilities incurred by him or them, or
imposed on him or them, including, but not limited to, judgments,
settlements, court costs and attorneys' fees, in connection with, or
arising out of, any such action, suit or proceeding based on any act,
omission, step or conduct taken or had in good faith as in this
paragraph described.
"The foregoing rights shall not be exclusive of other rights to which
any such director, officer or employee (or his heirs, executors and
administrators) may otherwise be entitled under any bylaw, agreement,
vote of shareholders or otherwise, and shall be available whether or not
the director, officer or employee continues to be a director, officer or
employee at the time of incurring such expenses and liabilities. In
furtherance, and not in limitation of the foregoing provisions of this
Article IX, the Corporation may indemnify and insure any such persons to
the fullest extent permitted by the Texas Business Corporation Act, as
amended from time to time, or the laws of the State of Texas, as in
effect from time to time."
Article 2.02-1 of the Texas Business Corporation Act permits the
Company, in certain circumstances, to indemnify any present or former
director, officer, employee or agent of the Company against judgments,
penalties, fines, settlements and reasonable expenses incurred in
connection with a proceeding in which any such person was, is or is
threatened to be, made a party by reason of holding such office or
position, but only to a limited extent for obligations resulting from a
proceeding in which the person is found liable on the basis that a personal
benefit was improperly received or in circumstances in which the person is
found liable in a derivative suit brought on behalf of the Company.
II-1
<PAGE>
Article X of the Articles of Incorporation of the Company provides as
follows:
"A director of the Corporation shall not be liable to the Corporation
or its shareholders for monetary damages for any act or omission in the
director's capacity as a director, except that this provision does not
eliminate or limit the liability of a director to the extent the
director is found liable for:
(a) a breach of a director's duty of loyalty to the Corporation or
its shareholders;
(b) an act or omission not in good faith that constitutes a breach
of duty of a director to the Corporation or an act or omission that
involved intentional misconduct or a knowing violation of the law;
(c) a transaction from which a director received an improper
benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office; or
(d) an act or omission for which the liability of a director is
expressly provided for by statute.
If the laws of the State of Texas are amended to authorize action
further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated
or limited to the fullest extent permitted by such laws as so amended.
Any repeal or modification of this Article X shall not adversely affect
any right of protection of a director of the Corporation existing at the
time of such repeal or modification."
Section 22 of the Company's bylaws provides as follows:
"Section 22. Insurance, Indemnification and Other Arrangements.
Without further specific approval of the shareholders of the
Corporation, the Corporation may purchase, enter into, maintain or
provide insurance, indemnification or other arrangements for the benefit
of any person who is or was a director, officer, employee or agent of
the Corporation or is or was serving another entity at the request of
the Corporation as a director, officer, employee, agent or otherwise, to
the fullest extent permitted by the laws of the State of Texas,
including without limitation Art. 2.02-1 of the Texas Business
Corporation Act or any successor provision, against any liability
asserted against or incurred by any such person in any such capacity or
arising out of such person's service in such capacity whether or not the
Corporation would otherwise have the power to indemnify against any such
liability under the Texas Business Corporation Act. If the laws of the
State of Texas are amended to authorize the purchase, entering into,
maintaining or providing of insurance, indemnification or other
arrangements in the nature of those permitted hereby to a greater extent
than presently permitted, then the Corporation shall have the power and
authority to purchase, enter into, maintain and provide any additional
arrangements in such regard as shall be permitted from time to time by
the laws of the State of Texas without further approval of the
shareholders of the Corporation. No repeal or modification of such laws
or this Section 22 shall adversely affect any such arrangement or right
to indemnification existing at the time of such repeal or modification."
The Registrant has entered into agreements with its directors which
provide, among other things, for their indemnification by the Registrant to
the fullest extent permitted by Texas law, unless a final adjudication
establishes that the indemnitee's acts were committed in bad faith, were
the result of active and deliberate dishonesty or that the indemnitee
personally gained a financial profit to which the indemnitee was not
legally entitled. These agreements further provide, under certain
circumstances, for the advancement of expenses and the implementation of
other arrangements for the benefit of the indemnitee.
II-2
<PAGE>
The Registrant has insurance covering its expenditures which might
arise in connection with its lawful indemnification of its directors and
officers for their liabilities and expenses. Directors and officers of the
Company also have insurance which insures them against certain other
liabilities and expenses.
II-3
<PAGE>
ITEM 21. EXHIBITS.
PREVIOUSLY FILED*
----------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
------- ------ -------
3(a) 333-12391 3(a) -- Restated Articles of
Incorporation of the Company
3(b) 333-45657 4(b) -- Bylaws of the Company, as
amended.
4(a) -- Indenture relating to Series A
and Series A Exchange Notes.
4(b) -- Indenture relating to Series B
and Series B Exchange Notes
4(c) -- Registration Rights Agreement
with respect to Series A Notes.
4(d) -- Registration Rights Agreement
with respect to Series B Notes.
4(e) -- Officers' Certificate
establishing Series A Exchange
Notes.
4(f) -- Officers' Certificate
establishing Series B Exchange
Notes.
4(g) -- Form of Series A Exchange
Notes.
4(h) -- Form of Series B Exchange
Notes.
4(i) -- Form of Letter of Transmittal
5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) -- Opinion of Reid & Priest LLP,
and 8 of counsel to the Company.
12 -- Computation of Ratio of
Earnings to Fixed Charges of
the Company.
15(a) -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information
of TEI and the Company.
15(b) -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information
of ENSERCH
23(a) -- Independent Auditors' Consent.
23(b) -- Independent Auditors' Consent.
23(c) -- Independent Auditors' Consent.
23(d) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 8 and 5(b),
respectively.
24 -- Power of Attorney (see Page II-
7).
25(a) -- Statement on Form T-1 of the
Bank of New York relating to
Indenture for the Series A
Notes and Series A Exchange
Notes.
25(b) -- Statement on Form T-1 of The
Bank of New York relating to
Indenture for the Series B
Notes and Series B Exchange
Notes.
99(a) -- Form of Exchange Agent
Agreement.
----------
*Incorporated herein by reference.
II-4
<PAGE>
ITEM 22. UNDERTAKINGS.
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's Annual Report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
b. That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
c. (i) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means;
and (ii) to arrange to provide for a facility in the U.S. for the purpose
of responding to such requests. The undertaking in subparagraph (i) above
includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
II-5
<PAGE>
d. To supply by means of a post-effective amendment all information
concerning a transaction and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-6
<PAGE>
POWER OF ATTORNEY
EACH DIRECTOR AND/OR OFFICER OF THE REGISTRANT WHOSE SIGNATURE APPEARS
BELOW HEREBY APPOINTS THE AGENTS FOR SERVICE NAMED IN THIS REGISTRATION
STATEMENT, AND EACH OF THEM SEVERALLY, AS HIS ATTORNEY-IN-FACT TO SIGN IN
HIS NAME AND BEHALF, IN ANY AND ALL CAPACITIES STATED BELOW, AND TO FILE
WITH THE SECURITIES AND EXCHANGE COMMISSION, ANY AND ALL AMENDMENTS,
INCLUDING POST-EFFECTIVE AMENDMENTS, TO THIS REGISTRATION STATEMENT, AND
THE REGISTRANT HEREBY ALSO APPOINTS EACH SUCH AGENT FOR SERVICE AS ITS
ATTORNEY-IN-FACT WITH LIKE AUTHORITY TO SIGN AND FILE ANY SUCH AMENDMENTS
IN ITS NAME AND BEHALF.
SIGNATURES
THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF DALLAS, AND STATE OF TEXAS, ON THE 10th DAY OF FEBRUARY, 1998.
TEXAS UTILITIES COMPANY
BY /S/ ERLE NYE
-------------------
(ERLE NYE, CHAIRMAN
OF THE BOARD AND
CHIEF EXECUTIVE)
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURES TITLE DATE
---------- ----- ----
/S/ ERLE NYE PRINCIPAL
------------------------------------- EXECUTIVE February 10, 1998
(ERLE NYE, CHAIRMAN OF THE BOARD OFFICER AND
AND CHIEF EXECUTIVE) DIRECTOR
/S/ MICHAEL J. MCNALLY PRINCIPAL
------------------------------------- FINANCIAL February 10, 1998
(MICHAEL J. MCNALLY, OFFICER
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
/S/ JERRY W. PINKERTON PRINCIPAL
------------------------------------- ACCOUNTING February 10, 1998
(JERRY W. PINKERTON, CONTROLLER) OFFICER
/S/ J. S. FARRINGTON DIRECTOR
------------------------------------- February 10, 1998
(J. S. FARRINGTON)
/S/ BAYARD H. FRIEDMAN DIRECTOR
------------------------------------- February 10, 1998
(BAYARD H. FRIEDMAN)
/S/ WILLIAM M. GRIFFIN DIRECTOR
------------------------------------- February 10, 1998
(WILLIAM M. GRIFFIN)
/S/ KERNEY LADAY DIRECTOR
------------------------------------- February 10, 1998
(KERNEY LADAY)
/S/ MARGARET N. MAXEY DIRECTOR
------------------------------------- February 10, 1998
(MARGARET N. MAXEY)
/S/ JAMES A. MIDDLETON DIRECTOR
------------------------------------- February 10, 1998
(JAMES A. MIDDLETON)
------------------------------------- DIRECTOR
(JAMES E. OESTERRICHER)
/S/ CHARLES R. PERRY DIRECTOR
------------------------------------- February 10, 1998
(CHARLES R. PERRY)
/S/ HERBERT H. RICHARDSON DIRECTOR
------------------------------------- February 10, 1998
(HERBERT H. RICHARDSON)
II-7
<PAGE>
EXHIBIT INDEX
ITEM 21. EXHIBITS.
PREVIOUSLY FILED*
----------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
------- ------ -------
3(a) 333-12391 3(a) -- Restated Articles of
Incorporation of the Company
3(b) 333-45657 4(b) -- Bylaws of the Company, as
amended.
4(a) -- Indenture relating to Series A
and Series A Exchange Notes.
4(b) -- Indenture relating to Series B
and Series B Exchange Notes
4(c) -- Registration Rights Agreement
with respect to Series A Notes.
4(d) -- Registration Rights Agreement
with respect to Series B Notes.
4(e) -- Officers' Certificate
establishing Series A Exchange
Notes.
4(f) -- Officers' Certificate
establishing Series B Exchange
Notes.
4(g) -- Form of Series A Exchange
Notes.
4(h) -- Form of Series B Exchange
Notes.
4(i) -- Form of Letter of Transmittal
5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) -- Opinion of Reid & Priest LLP,
and 8 of counsel to the Company.
12 -- Computation of Ratio of
Earnings to Fixed Charges of
the Company.
15(a) -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information
of TEI and the Company.
15(b) -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information
of ENSERCH
23(a) -- Independent Auditors' Consent.
23(b) -- Independent Auditors' Consent.
23(c) -- Independent Auditors' Consent.
23(d) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 8 and 5(b),
respectively.
24 -- Power of Attorney (see Page II-
7).
25(a) -- Statement on Form T-1 of the
Bank of New York relating to
Indenture for the Series A
Notes and Series A Exchange
Notes.
25(b) -- Statement on Form T-1 of The
Bank of New York relating to
Indenture for the Series B
Notes and Series B Exchange
Notes.
99(a) -- Form of Exchange Agent
Agreement.
----------
*Incorporated herein by reference.
__________________________________________
TEXAS UTILITIES COMPANY
TO
THE BANK OF NEW YORK
TRUSTEE
_________
INDENTURE
(FOR UNSECURED DEBT SECURITIES SERIES A)
DATED AS OF OCTOBER 1, 1997
__________________________________________
<PAGE>
TABLE OF CONTENTS
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions and Other Provisions of General Application . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . 3
Company Request or Company Order . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . 3
Discount Security . . . . . . . . . . . . . . . . . 3
Dollar or $ . . . . . . . . . . . . . . . . . . . . 3
Eligible Obligations . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . . 4
Government Obligations . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . 6
Periodic Offering . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . 6
Required Currency . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . 6
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED TO BE PART OF THE INDENTURE.
<PAGE>
Securities . . . . . . . . . . . . . . . . . . . . 7
Security Register and Security Registrar . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . 7
Stated Interest Rate . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . 7
Subsidiary . . . . . . . . . . . . . . . . . . . . 7
Tranche . . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . 7
United States . . . . . . . . . . . . . . . . . . . 7
SECTION 102. Compliance Certificates and Opinions . . . 8
SECTION 103. Form of Documents Delivered to Trustee . . 8
SECTION 104. Acts of Holders . . . . . . . . . . . . . 9
SECTION 105. Notices, etc. to Trustee and Company . . . 11
SECTION 106. Notice to Holders of Securities; Waiver . 12
SECTION 107. Conflict with Trust Indenture Act . . . . 12
SECTION 108. Effect of Headings and Table of Contents . 12
SECTION 109. Successors and Assigns . . . . . . . . . . 13
SECTION 110. Separability Clause . . . . . . . . . . . 13
SECTION 111. Benefits of Indenture . . . . . . . . . . 13
SECTION 112. Governing Law . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . 13
ARTICLE TWO . . . . . . . . . . . . . . . . . . . . . . . . . 14
Security Forms . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 201. Forms Generally . . . . . . . . . . . . . 14
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . 14
ARTICLE THREE . . . . . . . . . . . . . . . . . . . . . . . . 15
The Securities . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 301. Amount Unlimited; Issuable in Series . . . 15
SECTION 302. Denominations . . . . . . . . . . . . . . 18
SECTION 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . 19
SECTION 304. Temporary Securities . . . . . . . . . . . 21
SECTION 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . 22
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . 23
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . 24
SECTION 308. Persons Deemed Owners . . . . . . . . . . 25
SECTION 309. Cancellation by Security Registrar . . . . 26
SECTION 310. Computation of Interest . . . . . . . . . 26
SECTION 311. Payment to Be in Proper Currency . . . . . 26
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . 27
Redemption of Securities . . . . . . . . . . . . . . . . . . 27
SECTION 401. Applicability of Article . . . . . . . . . 27
SECTION 402. Election to Redeem; Notice to Trustee . . 27
SECTION 403. Selection of Securities to Be Redeemed . . 27
SECTION 404. Notice of Redemption . . . . . . . . . . . 28
SECTION 405. Securities Payable on Redemption Date . . 29
SECTION 406. Securities Redeemed in Part . . . . . . . 29
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . 30
Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 501. Applicability of Article . . . . . . . . . 30
SECTION 502. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . 30
SECTION 503. Redemption of Securities for Sinking Fund 31
ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . 31
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 601. Payment of Principal, Premium and Interest 31
SECTION 602. Maintenance of Office or Agency . . . . . 32
SECTION 603. Money for Securities Payments to Be Held in
Trust . . . . . . . . . . . . . . . . . . 32
SECTION 604. Corporate Existence . . . . . . . . . . . 34
SECTION 605. Maintenance of Properties . . . . . . . . 34
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . . . . 34
SECTION 607. Waiver of Certain Covenants . . . . . . . 34
SECTION 608. Limitation on Liens . . . . . . . . . . . 35
ARTICLE SEVEN . . . . . . . . . . . . . . . . . . . . . . . . 38
Satisfaction and Discharge . . . . . . . . . . . . . . . . . 38
SECTION 701. Satisfaction and Discharge of Securities . 38
SECTION 702. Satisfaction and Discharge of Indenture . 40
SECTION 703. Application of Trust Money . . . . . . . . 41
ARTICLE EIGHT . . . . . . . . . . . . . . . . . . . . . . . . 42
Events of Default; Remedies . . . . . . . . . . . . . . . . . 42
SECTION 801. Events of Default . . . . . . . . . . . . 42
SECTION 802. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . 43
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . 44
SECTION 804. Trustee May File Proofs of Claim . . . . . 45
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . 46
SECTION 806. Application of Money Collected . . . . . . 46
SECTION 807. Limitation on Suits . . . . . . . . . . . 46
SECTION 808. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . 47
SECTION 809. Restoration of Rights and Remedies . . . . 47
SECTION 810. Rights and Remedies Cumulative . . . . . . 48
SECTION 811. Delay or Omission Not Waiver . . . . . . . 48
SECTION 812. Control by Holders of Securities . . . . . 48
SECTION 813. Waiver of Past Defaults . . . . . . . . . 48
SECTION 814. Undertaking for Costs . . . . . . . . . . 49
SECTION 815. Waiver of Stay or Extension Laws . . . . . 49
ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . 50
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 901. Certain Duties and Responsibilities . . . 50
SECTION 902. Notice of Defaults . . . . . . . . . . . . 50
SECTION 903. Certain Rights of Trustee . . . . . . . . 51
SECTION 904. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . 52
SECTION 905. May Hold Securities . . . . . . . . . . . 52
SECTION 906. Money Held in Trust . . . . . . . . . . . 52
SECTION 907. Compensation and Reimbursement . . . . . . 52
SECTION 908. Disqualification; Conflicting Interests. . 53
SECTION 909. Corporate Trustee Required; Eligibility . 54
SECTION 910. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . 54
SECTION 911. Acceptance of Appointment by Successor . . 56
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . 57
SECTION 913. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . 58
SECTION 914. Co-trustees and Separate Trustees. . . . . 58
SECTION 915. Appointment of Authenticating Agent . . . 59
ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . 61
Holders' Lists and Reports by Trustee and Company . . . . . . 61
SECTION 1001. Lists of Holders . . . . . . . . . . . . 61
SECTION 1002. Reports by Trustee and Company . . . . . 62
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . 62
Consolidation, Merger, Conveyance or Other Transfer . . . . 62
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . 62
SECTION 1102. Successor Corporation Substituted . . . . 63
ARTICLE TWELVE . . . . . . . . . . . . . . . . . . . . . . . 63
Supplemental Indentures . . . . . . . . . . . . . . . . . . . 63
SECTION 1201. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . 63
SECTION 1202. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . 65
SECTION 1203. Execution of Supplemental Indentures . . 67
SECTION 1204. Effect of Supplemental Indentures . . . . 67
SECTION 1205. Conformity With Trust Indenture Act . . . 67
SECTION 1206. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . 67
SECTION 1207. Modification Without Supplemental Indenture
67
ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . 68
Meetings of Holders; Action Without Meeting . . . . . . . . . 68
SECTION 1301. Purposes for Which Meetings May Be Called 68
SECTION 1302. Call, Notice and Place of Meetings . . . 68
SECTION 1303. Persons Entitled to Vote at Meetings . . 69
SECTION 1304. Quorum; Action . . . . . . . . . . . . . 69
SECTION 1305. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment
of Meetings . . . . . . . . . . . . . . 70
SECTION 1306. Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . . 71
SECTION 1307. Action Without Meeting . . . . . . . . . 72
ARTICLE FOURTEEN . . . . . . . . . . . . . . . . . . . . . . 72
Immunity of Incorporators, Shareholders, Officers and Directors
72
SECTION 1401. Liability Solely Corporate . . . . . . . 72
ARTICLE FIFTEEN . . . . . . . . . . . . . . . . . . . . . . . 72
Securities of the First Series and Second Series . . . . . . 72
SECTION 1501. Designation of Securities of the First
Series. . . . . . . . . . . . . . . . . 72
SECTION 1502. Designation of Securities of the Second
Series. . . . . . . . . . . . . . . . . 73
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . 70
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 70
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . 71
<PAGE>
TEXAS UTILITIES COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF OCTOBER 1, 1997
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<section sign>310 (a)(1) . . . . . . . . . . . . . . . . . 909
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 909
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 914
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 908
910
<section sign>311 (a) . . . . . . . . . . . . . . . . . . . 913
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
<section sign>312 (a) . . . . . . . . . . . . . . . . . . 1001
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
<section sign>313 (a) . . . . . . . . . . . . . . . . . . 1002
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
<section sign>314 (a) . . . . . . . . . . . . . . . . . . 1002
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . 606
(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
<section sign>315 (a) . . . . . . . . . . . . . . . . . . . 901
903
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 814
<section sign>316 (a) . . . . . . . . . . . . . . . . . . . 812
813
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 802
812
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 813
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 808
<section sign>317 (a)(1) . . . . . . . . . . . . . . . . . 803
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 804
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 603
<section sign>318 (a) . . . . . . . . . . . . . . . . . . . 107
<PAGE>
INDENTURE, dated as of October 1, 1997, between TEXAS
UTILITIES COMPANY, a corporation duly organized and existing
under the laws of the State of Texas (herein called the
"Company"), having its principal office at Energy Plaza, 1601
Bryan Street, Dallas, Texas 75201, and THE BANK OF NEW YORK, a
corporation of the State of New York, having its principal
corporate trust office at 101 Barclay Street, New York, New York
10286, as Trustee (herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the "Securities"), in an unlimited
aggregate principal amount to be issued in one or more series as
contemplated herein; and all acts necessary to make this
Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires,
capitalized terms used herein shall have the meanings assigned to
them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(b) all terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles in the United
States, and, except as otherwise herein expressly provided,
the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally
accepted in the United States at the date of such
computation or, at the election of the Company from time to
time, at the date of the execution and delivery of this
Indenture; provided, however, that in determining generally
accepted accounting principles applicable to the Company,
the Company shall, to the extent required, conform to any
order, rule or regulation of any administrative agency,
regulatory authority or other governmental body having
jurisdiction over the Company; and
(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
Certain terms, used principally in Article Nine, are
defined in that Article.
"ACT", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "CONTROL" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or through
one or more intermediaries, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person (other than the
Company or an Affiliate of the Company) authorized by the Trustee
pursuant to Section 915 to act on behalf of the Trustee to
authenticate one or more series of Securities.
"AUTHORIZED OFFICER" means the Chairman of the Board,
the President, any Vice President, the Treasurer, any Assistant
Treasurer, or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters
relating to this Indenture.
"BOARD OF DIRECTORS" means either the board of
directors of the Company or any committee thereof duly authorized
to act in respect of matters relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of
Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation
or executive order to remain closed, except as may be otherwise
specified as contemplated by Section 301.
"COMMISSION" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934, as amended, or, if at any time
after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any,
performing such duties at such time.
"COMPANY" means the Person named as the "Company" in
the first paragraph of this Indenture until a successor Person
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such
successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written
request or order signed in the name of the Company by an
Authorized Officer and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of execution and delivery of this Indenture is located at
101 Barclay Street, New York, New York 10286.
"CORPORATION" means a corporation, association,
company, joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in
Section 307.
"DISCOUNT SECURITY" means any Security which provides
for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 802. "Interest" with respect to a
Discount Security means interest, if any, borne by such Security
at a Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private
debts.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Securities denominated in Dollars,
Government Obligations; or
(b) with respect to Securities denominated in a
currency other than Dollars or in a composite currency, such
other obligations or instruments as shall be specified with
respect to such Securities, as contemplated by Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section
801.
"GOVERNMENTAL AUTHORITY" means the government of the
United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any of the foregoing, or any department,
agency, authority or other instrumentality of any of the
foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States and entitled to the benefit of the full
faith and credit thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership interest in
obligations described in clause (a) above or in any specific
interest or principal payments due in respect thereof;
provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or
trust company (which may include the Trustee or any Paying
Agent) subject to Federal or state supervision or examination
with a combined capital and surplus of at least $50,000,000;
and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to
the holders of such certificates, depositary receipts or other
instruments the full amount received by such custodian in
respect of such obligations or specific payments and shall not
be permitted to make any deduction therefrom.
"HOLDER" means a Person in whose name a Security is registered
in the Security Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall
include the terms of a particular series of Securities
established as contemplated by Section 301.
"INTEREST PAYMENT DATE", when used with respect to any
Security, means the Stated Maturity of an installment of interest
on such Security.
"MATURITY", when used with respect to any Security, means the
date on which the principal of such Security or an installment of
principal becomes due and payable as provided in such Security or
in this Indenture, whether at the Stated Maturity, by declaration
of acceleration, upon call for redemption or otherwise.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be counsel for the Company, or other counsel acceptable to
the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(a) Securities theretofore canceled or delivered to the
Security Registrar for cancellation;
(b) Securities deemed to have been paid in accordance
with Section 701; and
(c) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are
held by a bona fide purchaser or purchasers in whose hands
such Securities are valid obligations of the Company;
provided, however, that in determining whether or not the Holders
of the requisite principal amount of the Securities Outstanding
under this Indenture, or the Outstanding Securities of any series
or Tranche, have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Securities,
(x) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor (unless the Company, such Affiliate or such
obligor owns all Securities Outstanding under this Indenture,
or (except for the purposes of actions to be taken by Holders
of (i) more than one series voting as a class under Section
812 or (ii) more than one series or more than one Tranche, as
the case may be, voting as a class under Section 1202) all
Outstanding Securities of each such series and each such
Tranche, as the case may be, determined without regard to this
clause (x)) shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon
any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so
disregarded; provided, however, that Securities so owned which
have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor; and
(y) the principal amount of a Discount Security that
shall be deemed to be Outstanding for such purposes shall be
the amount of the principal thereof that would be due and
payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 802;
provided, further, that, in the case of any Security the
principal of which is payable from time to time without
presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount
thereof less the aggregate amount of principal thereof
theretofore paid.
"PAYING AGENT" means any Person, including the Company,
authorized by the Company to pay the principal of, and premium,
if any, or interest, if any, on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a
series from time to time any or all of the specific terms of
which Securities, including without limitation the rate or rates
of interest, if any, thereon, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon
the issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any Governmental
Authority.
"PLACE OF PAYMENT", when used with respect to the Securities
of any series, or any Tranche thereof, means the place or places,
specified as contemplated by Section 301, at which, subject to
Section 602, principal of and premium, if any, and interest, if
any, on the Securities of such series or Tranche are payable.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered
under Section 306 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"REDEMPTION DATE", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 311.
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any securities
authenticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 305.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by
the Trustee pursuant to Section 307.
"STATED INTEREST RATE" means a rate (whether fixed or
variable) at which an obligation by its terms is stated to bear
simple interest. Any calculation or other determination to be
made under this Indenture by reference to the Stated Interest
Rate on a Security shall be made without regard to the effective
interest cost to the Company of such Security and without regard
to the Stated Interest Rate on, or the effective cost to the
Company of, any other indebtedness in respect of which the
Company's obligations are evidenced or secured in whole or in
part by such Security.
"STATED MATURITY", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means
the date on which the principal of such obligation or such
installment of principal or interest is stated to be due and
payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"SUBSIDIARY" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries,
or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock that
ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
"TRANCHE" means a group of Securities which (a) are of the
same series and (b) have identical terms except as to principal
amount and/or date of issuance.
"TRUST INDENTURE ACT" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in effect at
such time.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have
become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities
of that series.
"UNITED STATES" means the United States of America, its
Territories, its possessions and other areas subject to its
political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture,
upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the
Company shall, if requested by the Trustee, furnish to the
Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action (including any covenants compliance with which
constitutes a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to
which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each Person signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
Person, such Person has made such examination or investigation
as is necessary to enable such Person to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such Person, such condition or covenant has been complied
with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which such Officer's Certificate or
opinion are based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.
Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officer's Certificate, Opinion of Counsel or
other document or instrument, a clerical, typographical or other
inadvertent or unintentional error or omission shall be
discovered therein, a new document or instrument may be
substituted therefor in corrected form with the same force and
effect as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution and/or
delivery thereof, such substitute document or instrument shall be
deemed to have been executed and/or delivered as of the date or
dates required with respect to the document or instrument for
which it is substituted. Anything in this Indenture to the
contrary notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at the
request of the Company which could not have been taken had the
original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or
otherwise rendered ineffective but shall be and remain in full
force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the
generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to
the benefits of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, election, waiver or other action provided by
this Indenture to be made, given or taken by Holders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing or, alternatively,
may be embodied in and evidenced by the record of Holders
voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders duly called
and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments and so voting at any such meeting.
Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of
a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 901) conclusive in favor of
the Trustee and the Company, if made in the manner provided in
this Section. The record of any meeting of Holders shall be
proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit
of a witness of such execution or by a certificate of a notary
public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which
the Trustee and the Company deem sufficient. Where such
execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) The principal amount (except as otherwise
contemplated in clause (y) of the first proviso to the
definition of Outstanding) and serial numbers of Securities
held by any Person, and the date of holding the same, shall be
proved by the Security Register.
(d) Any request, demand, authorization, direction,
notice, consent, election, waiver or other Act of a Holder
shall bind every future Holder of the same Security and the
Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) Until such time as written instruments shall have
been delivered to the Trustee with respect to the requisite
percentage of principal amount of Securities for the action
contemplated by such instruments, any such instrument executed
and delivered by or on behalf of a Holder may be revoked with
respect to any or all of such Securities by written notice by
such Holder or any subsequent Holder, proven in the manner in
which such instrument was proven.
(f) Securities of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and
shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by such Act of
Holders. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform,
in the opinion of the Trustee and the Company, to such action
may be prepared and executed by the Company and authenticated
and delivered by the Trustee in exchange for Outstanding
Securities of such series or Tranche.
(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, fix in
advance a record date for the determination of Holders
entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be
Holders for the purposes of determining whether Holders of the
requisite proportion of the Outstanding Securities have
authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be
computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an
officer or other responsible employee of the addressee, or
transmitted by facsimile transmission or other direct written
electronic means to such telephone number or other electronic
communications address as the parties hereto shall from time to
time designate, or transmitted by certified or registered mail,
charges prepaid, to the applicable address set opposite such
party's name below or to such other address as either party
hereto may from time to time designate:
If to the Trustee, to:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Vice President, Corporate Trust
Administration
Telephone: (212) 815-5375
Telecopy: (212) 815-5915
If to the Company, to:
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Attention: Treasurer
Telephone: (214) 812-4646
Telecopy: (214) 812-3366
Any communication contemplated herein shall be deemed to
have been made, given, furnished and filed if personally
delivered, on the date of delivery, if transmitted by facsimile
transmission or other direct written electronic means, on the
date of transmission, and if transmitted by certified or
registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given, and shall be deemed given, to
Holders if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder
as it appears in the Security Register, not later than the latest
date, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice to Holders by mail, then such notification as
shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
Any notice required by this Indenture may be waived in
writing by the Person entitled to receive such notice, either
before or after the event otherwise to be specified therein, and
such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof which is required or
deemed to be included in this Indenture by, or is otherwise
governed by, any of the provisions of the Trust Indenture Act,
such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and
the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the
Company and Trustee shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto,
their successors hereunder and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT THE LAW OF ANY OTHER JURISDICTION
SHALL BE MANDATORILY APPLICABLE.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities other than a
provision in Securities of any series, or any Tranche thereof, or
in the Board Resolution or Officer's Certificate which
establishes the terms of the Securities of such series or
Tranche, which specifically states that such provision shall
apply in lieu of this Section) payment of interest or principal
and premium, if any, need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at
such Place of Payment, with the same force and effect, and in the
same amount, as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, as the case may be,
and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to such
Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in
substantially the form or forms thereof established in the
indenture supplemental hereto establishing such series or in a
Board Resolution establishing such series, or in an Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form or
forms of Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a Board
Resolution, such Board Resolution and Officer's Certificate, if
any, shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
Unless otherwise specified as contemplated by Sections
301 or 1201(g), the Securities of each series shall be issuable
in registered form without coupons. The definitive Securities
shall be produced in such manner as shall be determined by the
officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
Dated:
_________________________________
as Trustee
By: _____________________________
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series.
Subject to the last paragraph of this Section, prior to the
authentication and delivery of Securities of any series there
shall be established by specification in a supplemental indenture
or in a Board Resolution, or in an Officer's Certificate pursuant
to a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from
Securities of all other series);
(b) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 406 or 1206 and
except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered
hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of such series,
or any Tranche thereof, shall be payable on any Interest
Payment Date, if other than the Persons in whose names such
Securities (or one or more Predecessor Securities) are
registered at the close of business on the Regular Record Date
for such interest;
(d) the date or dates on which the principal of the
Securities of such series, or any Tranche thereof, is payable
or any formulary or other method or other means by which such
date or dates shall be determined, by reference to an index or
other fact or event ascertainable outside of this Indenture or
otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension);
(e) the rate or rates at which the Securities of such
series, or any Tranche thereof, shall bear interest, if any
(including the rate or rates at which overdue principal shall
bear interest, if different from the rate or rates at which
such Securities shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or
interest shall bear interest, if any), or any formulary or
other method or other means by which such rate or rates shall
be determined, by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise; the date
or dates from which such interest shall accrue; the Interest
Payment Dates on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on such
Securities on any Interest Payment Date; and the basis of
computation of interest, if other than as provided in Section
310;
(f) the place or places at which or methods by which (1)
the principal of and premium, if any, and interest, if any, on
Securities of such series, or any Tranche thereof, shall be
payable, (2) registration of transfer of Securities of such
series, or any Tranche thereof, may be effected, (3) exchanges
of Securities of such series, or any Tranche thereof, may be
effected and (4) notices and demands to or upon the Company in
respect of the Securities of such series, or any Tranche
thereof, and this Indenture may be served; the Security
Registrar for such series or Tranche; and if such is the case,
that the principal of such Securities shall be payable without
presentment or surrender thereof;
(g) the period or periods within which, or the date or
dates on which, the price or prices at which and the terms and
conditions upon which the Securities of such series, or any
Tranche thereof, may be redeemed, in whole or in part, at the
option of the Company and any restrictions on such
redemptions, including but not limited to a restriction on a
partial redemption by the Company of the Securities of any
series, or any Tranche thereof, resulting in delisting of such
Securities from any national exchange;
(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series,
or any Tranche thereof, pursuant to any sinking fund or other
mandatory redemption provisions or at the option of a Holder
thereof and the period or periods within which or the date or
dates on which, the price or prices at which and the terms and
conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation,
and applicable exceptions to the requirements of Section 404
in the case of mandatory redemption or redemption at the
option of the Holder;
(i) the denominations in which Securities of such
series, or any Tranche thereof, shall be issuable if other
than denominations of $1,000 and any integral multiple
thereof;
(j) the currency or currencies, including composite
currencies, in which payment of the principal of and premium,
if any, and interest, if any, on the Securities of such
series, or any Tranche thereof, shall be payable (if other
than in Dollars);
(k) if the principal of or premium, if any, or interest,
if any, on the Securities of such series, or any Tranche
thereof, are to be payable, at the election of the Company or
a Holder thereof, in a coin or currency other than that in
which the Securities are stated to be payable, the period or
periods within which and the terms and conditions upon which,
such election may be made;
(l) if the principal of or premium, if any, or interest,
if any, on the Securities of such series, or any Tranche
thereof, are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in securities or
other property, the type and amount of such securities or
other property, or the formulary or other method or other
means by which such amount shall be determined, and the period
or periods within which, and the terms and conditions upon
which, any such election may be made;
(m) if the amount payable in respect of principal of or
premium, if any, or interest, if any, on the Securities of
such series, or any Tranche thereof, may be determined with
reference to an index or other fact or event ascertainable
outside of this Indenture, the manner in which such amounts
shall be determined to the extent not established pursuant to
clause (e) of this paragraph;
(n) if other than the principal amount thereof, the
portion of the principal amount of Securities of such series,
or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant
to Section 802;
(o) any Events of Default, in addition to those
specified in Section 801, with respect to the Securities of
such series, and any covenants of the Company for the benefit
of the Holders of the Securities of such series, or any
Tranche thereof, in addition to those set forth in Article
Six;
(p) the terms, if any, pursuant to which the Securities
of such series, or any Tranche thereof, may be converted into
or exchanged for shares of capital stock or other securities
of the Company or any other Person;
(q) the obligations or instruments, if any, which shall
be considered to be Eligible Obligations in respect of the
Securities of such series, or any Tranche thereof, denominated
in a currency other than Dollars or in a composite currency,
and any additional or alternative provisions for the
reinstatement of the Company's indebtedness in respect of such
Securities after the satisfaction and discharge thereof as
provided in Section 701;
(r) if the Securities of such series, or any Tranche
thereof, are to be issued in global form, (i) any limitations
on the rights of the Holder or Holders of such Securities to
transfer or exchange the same or to obtain the registration of
transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and
all other matters incidental to such Securities;
(s) if the Securities of such series, or any Tranche
thereof, are to be issuable as bearer securities, any and all
matters incidental thereto which are not specifically
addressed in a supplemental indenture as contemplated by
clause (g) of Section 1201;
(t) to the extent not established pursuant to clause (r)
of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series, or any Tranche
thereof, to transfer or exchange such Securities or to obtain
the registration of transfer thereof; and if a service charge
will be made for the registration of transfer or exchange of
Securities of such series, or any Tranche thereof, the amount
or terms thereof;
(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of
such series, or any Tranche thereof;
(v) any collateral security, assurance or guarantee for
the Securities of such series;
(w) the non-applicability of Section 608 to the
Securities of such Series or any exceptions or modifications
of Section 608 with respect to the Securities of such Series;
(x) any rights or duties of another Person to assume the
obligations of the Company with respect to the Securities of
such series (whether as joint obligor, primary obligor,
secondary obligor or substitute obligor) and any rights or
duties to discharge and release any obligor with respect to
the Securities of such series or the Indenture to the extent
related to such series; and
(y) any other terms of the Securities of such series, or
any Tranche thereof, not inconsistent with the provisions of
this Indenture.
With respect to Securities of a series subject to a
Periodic Offering, the indenture supplemental hereto or the Board
Resolution which establishes such series, or the Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, as the case may be, may provide general terms or
parameters for Securities of such series and provide either that
the specific terms of Securities of such series, or any Tranche
thereof, shall be specified in a Company Order or that such terms
shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by
the clause (b) of Section 303.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
the Securities of each series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
the Securities shall be executed on behalf of the Company by an
Authorized Officer and may have the corporate seal of the Company
affixed thereto or reproduced thereon attested by any other
Authorized Officer or by the Secretary or an Assistant Secretary
of the Company. The signature of any or all of these officers on
the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of execution Authorized Officers
or the Secretary or an Assistant Secretary of the Company shall
bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication
and delivery of such Securities or did not hold such offices at
the date of such Securities.
The Trustee shall authenticate and deliver Securities of
a series, for original issue, at one time or from time to time in
accordance with the Company Order referred to below, upon receipt
by the Trustee of:
(a) the instrument or instruments establishing the form
or forms and terms of such series, as provided in Sections 201
and 301;
(b) a Company Order requesting the authentication and
delivery of such Securities and, to the extent that the terms
of such Securities shall not have been established in an
indenture supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental indenture
or Board Resolution, all as contemplated by Sections 201 and
301, either (i) establishing such terms or (ii) in the case of
Securities of a series subject to a Periodic Offering,
specifying procedures, acceptable to the Trustee, by which
such terms are to be established (which procedures may
provide, to the extent acceptable to the Trustee, for
authentication and delivery pursuant to oral or electronic
instructions from the Company or any agent or agents thereof,
which oral instructions are to be promptly confirmed
electronically or in writing), in either case in accordance
with the instrument or instruments delivered pursuant to
clause (a) above;
(c) the Securities of such series, executed on behalf of
the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have been
duly authorized by the Company and have been established
in conformity with the provisions of this Indenture;
(ii) the terms of such Securities have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture; and
(iii) such Securities, when authenticated and
delivered by the Trustee and issued and delivered by the
Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to
the benefits provided by this Indenture, and enforceable
in accordance with their terms, subject, as to
enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or
at law);
provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to
receive such Opinion of Counsel only once at or prior to the time
of the first authentication of such Securities (provided that
such Opinion of Counsel addresses the authentication and delivery
of all Securities of such series) and that in lieu of the
opinions described in clauses (ii) and (iii) above Counsel may
opine that:
(x) when the terms of such Securities shall have
been established pursuant to a Company Order or Orders or
pursuant to such procedures (acceptable to the Trustee)
as may be specified from time to time by a Company Order
or Orders, all as contemplated by and in accordance with
the instrument or instruments delivered pursuant to
clause (a) above, such terms will have been duly
authorized by the Company and will have been established
in conformity with the provisions of this Indenture; and
(y) such Securities, when authenticated and
delivered by the Trustee in accordance with this
Indenture and the Company Order or Orders or specified
procedures referred to in paragraph (x) above and issued
and delivered by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will
constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by the
Indenture, and enforceable in accordance with their
terms, subject, as to enforcement, to laws relating to or
affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy and insolvency
laws, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding
in equity or at law).
With respect to Securities of a series subject to a
Periodic Offering, the Trustee may conclusively rely, as to the
authorization by the Company of any of such Securities, the form,
terms thereof and the legality, validity, binding effect and
enforceability thereof, and compliance of the authentication and
delivery thereof with the terms and conditions of this Indenture,
upon the Opinion of Counsel and other documents delivered
pursuant to Sections 201 and 301 and this Section, as applicable,
at or prior to the time of the first authentication of Securities
of such series unless and until such opinion or other documents
have been superseded or revoked or expire by their terms. In
connection with the authentication and delivery of Securities of
a series subject to a Periodic Offering, the Trustee shall be
entitled to assume that the Company's instructions to
authenticate and deliver such Securities do not violate any
applicable law or any applicable rule, regulation or order of any
Governmental Authority having jurisdiction over the Company.
If the form or terms of the Securities of any series have
been established by or pursuant to a Board Resolution or an
Officer's Certificate as permitted by Sections 201 or 301, the
Trustee shall not be required to authenticate such Securities if
the issuance of such Securities pursuant to this Indenture will
materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the
Trustee.
Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
each Security shall be dated the date of its authentication.
Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, no Security shall be
entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating
Agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and
delivered hereunder to the Company, or any Person acting on its
behalf, but shall never have been issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes
of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be
entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any
series, or any Tranche thereof, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities;
provided, however, that temporary Securities need not recite
specific redemption, sinking fund, conversion or exchange
provisions.
Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche
thereof, after the preparation of definitive Securities of such
series or Tranche, the temporary Securities of such series or
Tranche shall be exchangeable, without charge to the Holder
thereof, for definitive Securities of such series or Tranche upon
surrender of such temporary Securities at the office or agency of
the Company maintained pursuant to Section 602 in a Place of
Payment for such Securities. Upon such surrender of temporary
Securities for such exchange, the Company shall, except as
aforesaid, execute and the Trustee shall authenticate and deliver
in exchange therefor definitive Securities of the same series and
Tranche of authorized denominations and of like tenor and
aggregate principal amount.
Until exchanged in full as hereinabove provided,
temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of
the same series and Tranche and of like tenor authenticated and
delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall cause to be kept in each office
designated pursuant to Section 602, with respect to the
Securities of each series, a register (all registers kept in
accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series, or any Tranche
thereof, and the registration of transfer thereof. The Company
shall designate one Person to maintain the Security Register for
the Securities of each series on a consolidated basis, and such
Person is referred to herein, with respect to such series, as the
"Security Registrar." Anything herein to the contrary
notwithstanding, the Company may designate one or more of its
offices as an office in which a register with respect to the
Securities of one or more series shall be maintained, and the
Company may designate itself the Security Registrar with respect
to one or more of such series. The Security Register shall be
open for inspection by the Trustee and the Company at all
reasonable times.
Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, or any Tranche
thereof, upon surrender for registration of transfer of any
Security of such series or Tranche at the office or agency of the
Company maintained pursuant to Section 602 in a Place of Payment
for such series or Tranche, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities
of the same series and Tranche, of authorized denominations and
of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, or any Tranche
thereof, any Security of such series or Tranche may be exchanged
at the option of the Holder, for one or more new Securities of
the same series and Tranche, of authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities delivered upon any registration of
transfer or exchange of Securities shall be valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
Every Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company,
the Trustee or the Security Registrar) be duly endorsed or shall
be accompanied by a written instrument of transfer in form
satisfactory to the Company, the Trustee or the Security
Registrar, as the case may be, duly executed by the Holder
thereof or his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301
with respect to Securities of any series, or any Tranche thereof,
no service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant
to Section 304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or to
provide for the registration of transfer of or the exchange of
(a) Securities of any series, or any Tranche thereof, during a
period of 15 days immediately preceding the date notice is to be
given identifying the serial numbers of the Securities of such
series or Tranche called for redemption or (b) any Security so
selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series
and Tranche, and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the ownership of
and the destruction, loss or theft of any Security and (b) such
security or indemnity as may be reasonably required by them to
save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such
Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and Tranche,
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security
shall be at any time enforceable by anyone other than the Holder
of such new Security, and any such new Security shall be entitled
to all the benefits of this Indenture equally and proportionately
with any and all other Securities of such series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche
thereof, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the related
Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a date
(herein called a "Special Record Date") for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment,
and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense
of the Company, shall promptly cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at the address of such
Holder as it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such
Special Record Date.
(b) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Security is registered as the absolute owner of such Security for
the purpose of receiving payment of principal of and premium, if
any, and (subject to Sections 305 and 307) interest, if any, on
such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Security Registrar, be delivered to the
Security Registrar and, if not theretofore canceled, shall be
promptly canceled by the Security Registrar. The Company may at
any time deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever or which
the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar.
No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled
Securities held by the Security Registrar shall be disposed of in
accordance with a Company Order delivered to the Security
Registrar and the Trustee, and the Security Registrar shall
promptly deliver a certificate of disposition to the Trustee and
the Company unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Securities be returned to it.
The Security Registrar shall promptly deliver evidence of any
cancellation of a Security in accordance with this Section 309 to
the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section
301 for Securities of any series, or any Tranche thereof,
interest on the Securities of each series shall be computed on
the basis of a 360-day year consisting of twelve 30-day months
and for any period shorter than a full month, on the basis of the
actual number of days elapsed in such period.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series, or any
Tranche thereof, denominated in any currency other than Dollars
or in a composite currency (the "Required Currency"), except as
otherwise specified with respect to such Securities as
contemplated by Section 301, the obligation of the Company to
make any payment of the principal thereof, or the premium or
interest thereon, shall not be discharged or satisfied by any
tender by the Company, or recovery by the Trustee, in any
currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the Trustee timely
holding the full amount of the Required Currency then due and
payable. If any such tender or recovery is in a currency other
than the Required Currency, the Trustee may take such actions as
it considers appropriate to exchange such currency for the
Required Currency. The costs and risks of any such exchange,
including without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall
remain fully liable for any shortfall or delinquency in the full
amount of Required Currency then due and payable, and in no
circumstances shall the Trustee be liable therefor except in the
case of its negligence or willful misconduct.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series, or any Tranche thereof, which
are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified
as contemplated by Section 301 for Securities of such series or
Tranche) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution or an Officer's
Certificate. The Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of
such Securities to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere
in this Indenture or (b) pursuant to an election of the Company
which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction
or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series, or any
Tranche thereof, are to be redeemed, the particular Securities to
be redeemed shall be selected by the Trustee from the Outstanding
Securities of such series or Tranche not previously called for
redemption, by such method as shall be provided for any
particular series, or, in the absence of any such provision, by
such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of
such series or Tranche or any integral multiple thereof) of the
principal amount of Securities of such series or Tranche of a
denomination larger than the minimum authorized denomination for
Securities of such series or Tranche; provided, however, that if,
as indicated in an Officer's Certificate, the Company shall have
offered to purchase all or any principal amount of the Securities
then Outstanding of any series, or any Tranche thereof, and less
than all of such Securities as to which such offer was made shall
have been tendered to the Company for such purchase, the Trustee,
if so directed by Company Order, shall select for redemption all
or any principal amount of such Securities which have not been so
tendered.
The Trustee shall promptly notify the Company and the
Security Registrar in writing of the Securities selected for
redemption and, in the case of any Securities selected to be
redeemed in part, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal
amount of such Securities which has been or is to be redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner
provided in Section 106 to the Holders of the Securities to be
redeemed not less than 30 nor more than 60 days prior to the
Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price (if known),
(c) if less than all the Securities of any series or
Tranche are to be redeemed, the identification of the
particular Securities to be redeemed and the portion of the
principal amount of any Security to be redeemed in part,
(d) that on the Redemption Date the Redemption Price,
together with accrued interest, if any, to the Redemption
Date, will become due and payable upon each such Security to
be redeemed and, if applicable, that interest thereon will
cease to accrue on and after said date,
(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any, unless it shall have been specified as
contemplated by Section 301 with respect to such Securities
that such surrender shall not be required,
(f) that the redemption is for a sinking or other fund,
if such is the case, and
(g) such other matters as the Company shall deem
desirable or appropriate.
Unless otherwise specified with respect to any Securities
in accordance with Section 301, with respect to any notice of
redemption of Securities at the election of the Company, unless,
upon the giving of such notice, such Securities shall be deemed
to have been paid in accordance with Section 701, such notice may
state that such redemption shall be conditional upon the receipt
by the Paying Agent or Agents for such Securities, on or prior to
the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on
such Securities and that if such money shall not have been so
received such notice shall be of no force or effect and the
Company shall not be required to redeem such Securities. In the
event that such notice of redemption contains such a condition
and such money is not so received, the redemption shall not be
made and within a reasonable time thereafter notice shall be
given, in the manner in which the notice of redemption was given,
that such money was not so received and such redemption was not
required to be made, and the Paying Agent or Agents for the
Securities otherwise to have been redeemed shall promptly return
to the Holders thereof any of such Securities which had been
surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company, and any notice of non-satisfaction of a
condition for redemption as aforesaid, shall be given by the
Company or, at the Company's request, by the Security Registrar
in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security
Registrar in the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and
the conditions, if any, set forth in such notice having been
satisfied, the Securities or portions thereof so to be redeemed
shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price
and accrued interest, if any) such Securities or portions
thereof, if interest-bearing, shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with
such notice, such Security or portion thereof shall be paid by
the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that
no such surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to such
Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such
Security, any installment of interest on any Security the Stated
Maturity of which installment is on or prior to the Redemption
Date shall be payable to the Holder of such Security, or one or
more Predecessor Securities, registered as such at the close of
business on the related Regular Record Date according to the
terms of such Security and subject to the provisions of Section
307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be
redeemed only in part at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security
or Securities of the same series and Tranche, of any authorized
denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so
surrendered.
ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of any series,
or any Tranche thereof, except as otherwise specified as
contemplated by Section 301 for Securities of such series or
Tranche.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series, or any Tranche
thereof, is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of any series, or any
Tranche thereof, is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any
series, or any Tranche thereof, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section
502. Each sinking fund payment shall be applied to the
redemption of Securities of the series or Tranche in respect of
which it was made as provided for by the terms of such
Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.
The Company (a) may deliver to the Trustee Outstanding
Securities (other than any previously called for redemption) of a
series or Tranche in respect of which a mandatory sinking fund
payment is to be made and (b) may apply as a credit Securities of
such series or Tranche which have been redeemed either at the
election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case
in satisfaction of all or any part of such mandatory sinking fund
payment with respect to the Securities of such series; provided,
however, that no Securities shall be applied in satisfaction of a
mandatory sinking fund payment if such Securities shall have been
previously so applied. Securities so applied shall be received
and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment
date for the Securities of any series, or any Tranche thereof,
the Company shall deliver to the Trustee an Officer's Certificate
specifying:
(a) the amount of the next succeeding mandatory sinking
fund payment for such series or Tranche;
(b) the amount, if any, of the optional sinking fund
payment to be made together with such mandatory sinking fund
payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by the payment of cash;
(e) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by delivering and crediting
Securities of such series or Tranche pursuant to Section 502
and stating the basis for such credit and that such Securities
have not previously been so credited, and the Company shall
also deliver to the Trustee any Securities to be so delivered.
If the Company shall not deliver such Officer's Certificate,
the next succeeding sinking fund payment for such series shall
be made entirely in cash in the amount of the mandatory
sinking fund payment. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 403 and cause notice of the
redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 404.
Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner
stated in Sections 405 and 406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if
any, and interest, if any, on the Securities of each series in
accordance with the terms of such Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for
the Securities of each series, or any Tranche thereof, an office
or agency where payment of such Securities shall be made, where
the registration of transfer or exchange of such Securities may
be effected and where notices and demands to or upon the Company
in respect of such Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of each such office
or agency and prompt notice to the Holders of any such change in
the manner specified in Section 106. If at any time the Company
shall fail to maintain any such required office or agency in
respect of Securities of any series, or any Tranche thereof, or
shall fail to furnish the Trustee with the address thereof,
payment of such Securities shall be made, registration of
transfer or exchange thereof may be effected and notices and
demands in respect thereof may be served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the
Trustee as its agent for all such purposes in any such event.
The Company may also from time to time designate one or
more other offices or agencies with respect to the Securities of
one or more series, or any Tranche thereof, for any or all of the
foregoing purposes and may from time to time rescind such
designations; provided, however, that, unless otherwise specified
as contemplated by Section 301 with respect to the Securities of
such series or Tranche, no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain
an office or agency for such purposes in each Place of Payment
for such Securities in accordance with the requirements set forth
above. The Company shall give prompt written notice to the
Trustee, and prompt notice to the Holders in the manner specified
in Section 106, of any such designation or rescission and of any
change in the location of any such other office or agency.
Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an
office of the Company, in which event the Company shall perform
all functions to be performed at such office or agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying
Agent with respect to the Securities of any series, or any
Tranche thereof, it shall, on or before each due date of the
principal of and premium, if any, and interest, if any, on any of
such Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the
principal and premium or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided. The Company shall promptly notify the Trustee of any
failure by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any, or
interest, if any, on such Securities.
Whenever the Company shall have one or more Paying Agents
for the Securities of any series, or any Tranche thereof, it
shall, on or before each due date of the principal of and
premium, if any, and interest, if any, on such Securities,
deposit with such Paying Agents sums sufficient (without
duplication) to pay the principal and premium or interest so
becoming due, such sums to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the
Securities of any series, or any Tranche thereof, other than the
Company or the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such
Paying Agent shall:
(a) hold all sums held by it for the payment of the
principal of and premium, if any, or interest, if any, on such
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the
Company (or any other obligor upon such Securities) to make
any payment of principal of or premium, if any, or interest,
if any, on such Securities; and
(c) at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent and furnish to the Trustee such information as it
possesses regarding the names and addresses of the Persons
entitled to such sums.
The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent and, if so stated
in a Company Order delivered to the Trustee, in accordance with
the provisions of Article Seven; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the
principal of and premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or, if
then held by the Company, shall be discharged from such trust;
and, upon such payment or discharge, the Holder of such Security
shall, as an unsecured general creditor and not as a Holder of an
Outstanding Security, look only to the Company for payment of the
amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to
the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such
money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will
be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article
Eleven, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property
owned in common with others, make reasonable effort to cause) all
its properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working
order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made
all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may
be necessary so that the business carried on in connection
therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from
discontinuing, or causing the discontinuance of, the operation
and maintenance of any of its properties if such discontinuance
is, in the judgment of the Company, desirable in the conduct of
its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than June 1, commencing June 1, 1998, the
Company shall deliver to the Trustee an Officer's Certificate
which need not comply with Section 102, executed by the principal
executive officer, the principal financial officer or the
principal accounting officer of the Company, as to such officer's
knowledge of the Company's compliance with all conditions and
covenants under this Indenture, such compliance to be determined
without regard to any period of grace or requirement of notice
under this Indenture.
SECTION 607. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply
with any term, provision or condition set forth in (a) Section
602 or any additional covenant or restriction specified with
respect to the Securities of any series, or any Tranche thereof,
as contemplated by Section 301, if before the time for such
compliance the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series and Tranches
with respect to which compliance with Section 602 or such
additional covenant or restriction is to be omitted, considered
as one class, shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition and (b) Section 604, 605 or
Article Eleven if before the time for such compliance the Holders
of a majority in principal amount of Securities Outstanding under
this Indenture shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition; but, in the case of (a) or
(b), no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of
the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and
effect.
SECTION 608. LIMITATION ON LIENS.
(a) Except as otherwise specified as contemplated by
Section 301 for Securities of any series, so long as any
Securities of any series are Outstanding, the Company will not
pledge, mortgage, hypothecate or grant a security interest in, or
permit any mortgage, pledge, security interest or other lien
upon, any capital stock of any Subsidiary now or hereafter owned
by the Company, to secure any Indebtedness (hereinafter defined)
without making effective provision whereby the Outstanding
Securities shall (so long as such other Indebtedness shall be so
secured) be equally and ratably secured with any and all such
other Indebtedness and any other indebtedness similarly entitled
to be equally and ratably secured; provided, however, that this
restriction shall not apply to nor prevent the creation or
existence of:
(1) any mortgage, pledge, security interest, lien or
encumbrance upon any such capital stock created at the time of
the acquisition of such capital stock by the Company or within
one year after such time to secure all or a portion of the
purchase price for such capital stock;
(2) any mortgage, pledge, security interest, lien or
encumbrance upon any such capital stock existing thereon at
the time of the acquisition thereof by the Company (whether or
not the obligations secured thereby are assumed by the
Company); or
(3) any extension, renewal of refunding of any mortgage,
pledge, security interest, lien or encumbrance permitted by
Subsection (1) or (2) above on capital stock of any Subsidiary
theretofore subject thereto (or substantially the same capital
stock) or any portion thereof.
(4) any judgment, levy, execution, attachment or other
similar lien arising in connection with court proceedings,
provided that either
(i) the execution or enforcement of each such lien
is effectively stayed within 30 days after entry of the
corresponding judgment (or the corresponding judgment has
been discharged within such 30 day period) and the claims
secured thereby are being contested in good faith by
appropriate proceedings timely commenced and diligently
prosecuted;
(ii) the payment of each such lien is covered in
full by insurance and the insurance company has not
denied or contested coverage thereof; or
(iii) so long as each such lien is adequately
bonded, any appropriate legal proceedings that may have
been duly initiated for the review of the corresponding
judgment, decree or order shall not have been fully
terminated or the period within which such proceedings
may be initiated shall not have expired.
For purposes of this Section 608, "Indebtedness" means
all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by the
Company for the repayment of money borrowed. All indebtedness
for money borrowed secured by a lien upon property owned by the
Company and upon which indebtedness for money borrowed the
Company customarily pays interest, although the Company has not
assumed or become liable for the payment of such indebtedness for
money borrowed, shall for purposes of this Section 608 be deemed
to be Indebtedness of the Company. All indebtedness of others
for money borrowed which is guaranteed as to payment of principal
by the Company or in effect guaranteed by the Company through a
contingent agreement to purchase such indebtedness for money
borrowed shall for purposes of this Section 608 be deemed to be
Indebtedness of the Company, but no other contingent obligation
of the Company in respect of indebtedness for money borrowed or
other obligations incurred by others shall for purposes of this
Section 608 be deemed to be Indebtedness of the Company.
In case the Company or any Subsidiary shall propose to
pledge, mortgage, hypothecate or grant a security interest in any
capital stock of any Subsidiary owned by the Company to secure
any Indebtedness, other than as permitted by Subsections (a)(1)
to (a)(3), inclusive, of this Section, the Company will prior
thereto give written notice thereof to the Trustee, and the
Company will prior to or simultaneously with such pledge,
mortgage, hypothecation or grant of security interest, by
supplemental indenture executed to the Trustee (or to the extent
legally necessary to another trustee or an additional or separate
trustee), in form satisfactory to the Trustee, effectively secure
(for so long as such other Indebtedness shall be so secured) all
the Securities equally and ratably with such Indebtedness and
with any other indebtedness for money borrowed similarly entitled
to be equally and ratably secured.
(b) Except as otherwise specified as contemplated by
Section 301 for Securities of any series, the provisions of
Subsection (a) of this Section 608 shall not apply in the event
that the Company or any Subsidiary shall pledge, mortgage,
hypothecate or grant a security interest in or other lien upon
any capital stock of any Subsidiary now or hereafter owned by the
Company to secure any Indebtedness which would otherwise be
subject to the foregoing restriction up to an aggregate amount
which, together with all other Indebtedness (other than
mortgages, pledges, security interests, liens or encumbrances
permitted by Subsection (a) of this Section 608) which would
otherwise be subject to the foregoing restriction, does not at
the time exceed 5% of Consolidated Capitalization.
For purposes of this Section 608:
(1) The term "Consolidated Capitalization" means the sum
obtained by adding (i) Consolidated Shareholders' Equity, (ii)
Consolidated Indebtedness for money borrowed (exclusive of any
thereof which is due and payable within one year of the date
such sum is determined) and, without duplication, (iii) any
preference or preferred stock of the Company or any
Consolidated Subsidiary which is subject to mandatory
redemption or sinking fund provisions.
(2) The term "Consolidated Shareholders' Equity" means
the total Assets of the Company and its Consolidated
Subsidiaries less all liabilities of the Company and its
Consolidated Subsidiaries. As used in this definition,
"liabilities" means all obligations which would, in accordance
with generally accepted accounting principles, be classified
on a balance sheet as liabilities, including without
limitation, (i) indebtedness secured by property of the
Company or any of its Consolidated Subsidiaries whether or not
the Company or such Consolidated Subsidiary is liable for the
payment thereof unless, in the case that the Company or such
Consolidated Subsidiary is not so liable, such property has
not been included among the Assets of the Company or such
Consolidated Subsidiary on such balance sheet, (ii) deferred
liabilities, (iii) indebtedness of the Company or any of its
Consolidated Subsidiaries that is expressly subordinated in
right and priority of payment to other liabilities of the
Company or such Consolidated Subsidiary. As used in this
definition, "liabilities" includes preference or preferred
stock of the Company or any Consolidated Subsidiary only to
the extent of any such preference or preferred stock that is
subject to mandatory redemption or sinking fund provisions.
(3) The term "Consolidated Subsidiary" means at any date
any Subsidiary the financial statements of which under
generally accepted accounting principles would be consolidated
with those of the Company in its consolidated financial
statements as of such date.
(4) The "Assets" of any Person means the whole or any
part of its business, property, assets, cash and receivables.
(5) The term "Consolidated Indebtedness" means total
indebtedness as shown on the consolidated balance sheet of the
Company and its Consolidated Subsidiaries.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES.
Any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for
all purposes of this Indenture, and the entire indebtedness of
the Company in respect thereof shall be deemed to have been
satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the
Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity
of such Securities or portions thereof, Eligible Obligations,
which shall not contain provisions permitting the redemption
or other prepayment thereof at the option of the issuer
thereof, the principal of and the interest on which when due,
without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with
or held by the Trustee or such Paying Agent, shall be
sufficient, or
(c) a combination of (a) or (b) which shall be
sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof on or prior to Maturity; provided, however, that
in the case of the provision for payment or redemption of less
than all the Securities of any series or Tranche, such Securities
or portions thereof shall have been selected by the Trustee as
provided herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have been
given or irrevocable authority shall have been given by the
Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the
Company shall have delivered to the Trustee and such Paying
Agent:
(x) if such deposit shall have been made prior to
the Maturity of such Securities, a Company Order stating
that the money and Eligible Obligations deposited in
accordance with this Section shall be held in trust, as
provided in Section 703; and
(y) if Eligible Obligations shall have been
deposited, an Opinion of Counsel that the obligations so
deposited constitute Eligible Obligations and do not
contain provisions permitting the redemption or other
prepayment at the option of the issuer thereof, and an
opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the
effect that the requirements set forth in clause (b)
above have been satisfied; and
(z) if such deposit shall have been made prior to
the Maturity of such Securities, an Officer's Certificate
stating the Company's intention that, upon delivery of
such Officer's Certificate, its indebtedness in respect
of such Securities or portions thereof will have been
satisfied and discharged as contemplated in this Section.
Upon the deposit of money or Eligible Obligations, or
both, in accordance with this Section, together with the
documents required by clauses (x), (y) and (z) above, the Trustee
shall, upon receipt of a Company Request, acknowledge in writing
that the Security or Securities or portions thereof with respect
to which such deposit was made are deemed to have been paid for
all purposes of this Indenture and that the entire indebtedness
of the Company in respect thereof has been satisfied and
discharged as contemplated in this Section. In the event that
all of the conditions set forth in the preceding paragraph shall
have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate
specified in clause (z) shall not have been delivered, such
Securities or portions thereof shall nevertheless be deemed to
have been paid for all purposes of this Indenture, and the
Holders of such Securities or portions thereof shall nevertheless
be no longer entitled to the benefits of this Indenture or of any
of the covenants of the Company under Article Six (except the
covenants contained in Sections 602 and 603) or any other
covenants made in respect of such Securities or portions thereof
as contemplated by Section 301, but the indebtedness of the
Company in respect of such Securities or portions thereof shall
not be deemed to have been satisfied and discharged prior to
Maturity for any other purpose, and the Holders of such
Securities or portions thereof shall continue to be entitled to
look to the Company for payment of the indebtedness represented
thereby; and, upon Company Request, the Trustee shall acknowledge
in writing that such Securities or portions thereof are deemed to
have been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all of the
Securities of any series, or any Tranche thereof, is to be
provided for in the manner and with the effect provided in this
Section, the Security Registrar shall select such Securities, or
portions of principal amount thereof, in the manner specified by
Section 403 for selection for redemption of less than all the
Securities of a series or Tranche.
In the event that Securities which shall be deemed to
have been paid for purposes of this Indenture, and, if such is
the case, in respect of which the Company's indebtedness shall
have been satisfied and discharged, all as provided in this
Section do not mature and are not to be redeemed within the 60
day period commencing with the date of the deposit of moneys or
Eligible Obligations, as aforesaid, the Company shall, as
promptly as practicable, give a notice, in the same manner as a
notice of redemption with respect to such Securities, to the
Holders of such Securities to the effect that such deposit has
been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to
have been paid for purposes of this Indenture, as aforesaid, the
obligations of the Company and the Trustee in respect of such
Securities under Sections 304, 305, 306, 404, 503 (as to notice
of redemption), 602, 603, 907 and 915 and this Article Seven
shall survive.
The Company shall pay, and shall indemnify the Trustee or
any Paying Agent with which Eligible Obligations shall have been
deposited as provided in this Section against, any tax, fee or
other charge imposed on or assessed against such Eligible
Obligations or the principal or interest received in respect of
such Eligible Obligations, including, but not limited to, any
such tax payable by any entity deemed, for tax purposes, to have
been created as a result of such deposit.
Anything herein to the contrary notwithstanding, (a) if,
at any time after a Security would be deemed to have been paid
for purposes of this Indenture, and, if such is the case, the
Company's indebtedness in respect thereof would be deemed to have
been satisfied or discharged, pursuant to this Section (without
regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the
money or Eligible Obligations, or combination thereof, deposited
with it as aforesaid to the Company or its representative under
any applicable Federal or State bankruptcy, insolvency or other
similar law, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction and
discharge of the Company's indebtedness in respect thereof shall
retroactively be deemed not to have been effected, and such
Security shall be deemed to remain Outstanding and (b) any
satisfaction and discharge of the Company's indebtedness in
respect of any Security shall be subject to the provisions of the
last paragraph of Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of
further effect (except as hereinafter expressly provided), and
the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
provided, however, that if, in accordance with the last paragraph
of Section 701, any Security, previously deemed to have been paid
for purposes of this Indenture, shall be deemed retroactively not
to have been so paid, this Indenture shall thereupon be deemed
retroactively not to have been satisfied and discharged, as
aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee
shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company and the
Trustee under Sections 304, 305, 306, 404, 503 (as to notice of
redemption), 602, 603, 907 and 915 and this Article Seven shall
survive.
Upon satisfaction and discharge of this Indenture as
provided in this Section, the Trustee shall assign, transfer and
turn over to the Company, subject to the lien provided by Section
907, any and all money, securities and other property then held
by the Trustee for the benefit of the Holders of the Securities
other than money and Eligible Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited
pursuant to Section 701, nor the principal or interest payments
on any such Eligible Obligations, shall be withdrawn or used for
any purpose other than, and shall be held in trust for, the
payment of the principal of and premium, if any, and interest, if
any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to
the provisions of Section 603; provided, however, that, so long
as there shall not have occurred and be continuing an Event of
Default, any cash received from such principal or interest
payments on such Eligible Obligations, if not then needed for
such purpose, shall, to the extent practicable and upon Company
Request, be invested in Eligible Obligations of the type
described in clause (b) in the first paragraph of Section 701
maturing at such times and in such amounts as shall be
sufficient, together with any other moneys and the principal of
and interest on any other Eligible Obligations then held by the
Trustee, to pay when due the principal of and premium, if any,
and interest, if any, due and to become due on such Securities or
portions thereof on and prior to the Maturity thereof, and
interest earned from such reinvestment shall be paid over to the
Company as received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section 907; and
provided, further, that, so long as there shall not have occurred
and be continuing an Event of Default, any moneys held in
accordance with this Section on the Maturity of all such
Securities in excess of the amount required to pay the principal
of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of
any trust, lien or pledge under this Indenture except the lien
provided by Section 907; and provided, further, that if an Event
of Default shall have occurred and be continuing, moneys to be
paid over to the Company pursuant to this Section shall be held
until such Event of Default shall have been waived or cured.
ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security of
such series within 30 days after the same becomes due and
payable; or
(b) failure to pay the principal of or premium, if any,
on any Security of such series at its Maturity; or
(c) failure to perform or breach of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance of which or
breach of which is elsewhere in this Section specifically
dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days
after there has been given, by registered or certified mail,
to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 33% in principal amount of
the Outstanding Securities of such series, a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder, unless the Trustee, or the Trustee and the Holders
of a principal amount of Securities of such series not less
than the principal amount of Securities the Holders of which
gave such notice, as the case may be, shall agree in writing
to an extension of such period prior to its expiration;
provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Securities of such series,
as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by
the Company within such period and is being diligently
pursued; or
(d) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition by one or more Persons other than
the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official for the Company or for any substantial part
of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order for relief or any
such other decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case
or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in a case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of
any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally
as they become due, or the authorization of such action by the
Board of Directors; or
(f) any other Event of Default specified with respect to
Securities of such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of
principal of, or interest on, any series of Securities or due to
the default in the performance or breach of any other covenant or
warranty of the Company applicable to the Securities of such
series but not applicable to all Outstanding Securities shall
have occurred and be continuing, either the Trustee or the
Holders of not less than 33% in principal amount of the
Securities of such series may then declare the principal amount
(or, if any of the Securities of such series are Discount
Securities, such portion of the principal amount as may be
specified in the terms thereof as contemplated by Section 301) of
all Securities of such series and interest accrued thereon to be
due and payable immediately. If an Event of Default due to
default in the performance of any other of the covenants or
agreements herein applicable to all Outstanding Securities or an
Event of Default specified in Section 801(d) or (e) shall have
occurred and be continuing, either the Trustee or the Holders of
not less than 33% in principal amount of all Securities then
Outstanding (considered as one class), and not the Holders of the
Securities of any one of such series, may declare the principal
of all Securities and interest accrued thereon to be due and
payable immediately. As a consequence of each such declaration
(herein referred to as a declaration of acceleration) with
respect to Securities of any series, the principal amount (or
portion thereof in the case of Discount Securities) of such
Securities and interest accrued thereon shall become due and
payable immediately.
At any time after such a declaration of acceleration with
respect to Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall
have been obtained by the Trustee as hereinafter in this Article
provided, the Event or Events of Default giving rise to such
declaration of acceleration shall, without further act, be deemed
to have been waived, and such declaration and its consequences
shall, without further act, be deemed to have been rescinded and
annulled, if
(a) the Company shall have paid or deposited with the
Trustee a sum sufficient to pay
(1) all overdue interest on all Securities of such
series;
(2) the principal of and premium, if any, on any
Securities of such series which have become due otherwise
than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Securities;
(3) to the extent that payment of such interest is
lawful, interest upon overdue interest, if any, at the
rate or rates prescribed therefor in such Securities;
(4) all amounts due to the Trustee under Section
907;
and
(b) any other Event or Events of Default with respect to
Securities of such series, other than the nonpayment of the
principal of Securities of such series which shall have become
due solely by such declaration of acceleration, shall have
been cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default
or impair any right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of
Section 801 shall have occurred and be continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of the Securities of the series with respect to which
such Event of Default shall have occurred, the whole amount then
due and payable on such Securities for principal and premium, if
any, and interest, if any, and, to the extent permitted by law,
interest on any overdue principal and interest, at the rate or
rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover any
amounts due to the Trustee under Section 907.
If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of
an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any
series shall have occurred and be continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal, premium, if any, and interest, if any, owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for
amounts due to the Trustee under Section 907) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or premium, if any, or
interest, if any, upon presentation of the Securities in respect
of which or for the benefit of which such money shall have been
collected and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 907;
SECOND: To the payment of the amounts then due and
unpaid upon the Securities for principal of and premium, if
any, and interest, if any, in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal,
premium, if any, and interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(a) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with
respect to the Securities of such series;
(b) the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series in respect
of which an Event of Default shall have occurred and be
continuing, considered as one class, shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period
by the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series in respect of which
an Event of Default shall have occurred and be continuing,
considered as one class;
it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders or
to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal
of and premium, if any, and (subject to Section 307) interest, if
any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the
consent of such Holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the
Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee
and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and
remedies of the Trustee and such Holder shall continue as though
no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 811. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be
continuing in respect of a series of Securities, the Holders of a
majority in principal amount of the Outstanding Securities of
such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities,
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all such series, considered as one
class, shall have the right to make such direction, and not the
Holders of the Securities of any one of such series; and
provided, further, that such direction shall not be in conflict
with any rule of law or with this Indenture. The Trustee may
take any other action, deemed proper by the Trustee, which is not
inconsistent with any such direction. Before proceeding to
exercise any right or power hereunder at the direction of such
Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its
consequences, except a default
(a) in the payment of the principal of or premium, if
any, or interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which
under Section 1202 cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such
series affected.
Upon any such waiver, such default shall cease to exist,
and any and all Events of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including
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; but the
provisions of this Section shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the
Outstanding Securities of all series in respect of which such
suit may be brought, considered as one class, or to any suit
instituted by any Holder for the enforcement of the payment of
the principal of or premium, if any, or interest, if any, on any
Security on or after the Stated Maturity or Maturities expressed
in such Security (or, in the case of redemption, on or after the
Redemption Date).
SECTION 815. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the
duties and responsibilities specified with respect to an
indenture trustee in the Trust Indenture Act and no implied
covenants or obligations shall be read into this Indenture
against the Trustee. For purposes of Sections 315(a) and
315(c) of the Trust Indenture Act, the term "default" is
hereby defined as an Event of Default which has occurred and
is continuing.
(b) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Notwithstanding anything contained in this Indenture
to the contrary, the duties and responsibilities of the
Trustee under this Indenture shall be subject to the
protections, exculpations and limitations on liability
afforded to the Trustee under the provisions of the Trust
Indenture Act.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder
with respect to the Securities of any series to the Holders of
Securities of such series in the manner and to the extent
required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 801(c),
no such notice to Holders shall be given until at least 45 days
after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or
lapse of time, or both, would become, an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the
applicable provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order, or as otherwise expressly provided herein, and
any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at
the request or direction of any Holder pursuant to this
Indenture, unless such Holder shall have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall (subject to
applicable legal requirements) be entitled to examine, during
normal business hours, the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys, and the Trustee shall not
be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
and
(h) the Trustee shall not be charged with knowledge of
any default or Event of Default, as the case may be, with
respect to the Securities of any series for which it is acting
as Trustee unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the default or Event of
Default, as the case may be, or (2) written notice of such
default or Event of Default, as the case may be, shall have
been given to the Trustee by the Company, any other obligor on
such Securities or by any Holder of such Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities
(except the Trustee's certificates of authentication) shall be
taken as the statements of the Company, and neither the Trustee
nor any Authenticating Agent assumes responsibility for their
correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company,
in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it would
have if it were not the Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit of, the
Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein,
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except
to the extent that any such expense, disbursement or advance
may be attributable to the Trustee's negligence, wilful
misconduct or bad faith; and
(c) indemnify the Trustee for, and hold it harmless from
and against, any loss, liability or expense reasonably
incurred by it arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder
or the performance of its duties hereunder, including the
reasonable costs and expenses of defending itself against any
claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except
to the extent any such loss, liability or expense may be
attributable to its negligence, wilful misconduct or bad
faith.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior
to the Securities upon all property and funds held or collected
by the Trustee as such other than property and funds held in
trust under Section 703 (except as otherwise provided in Section
703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided, however, that the negligence,
wilful misconduct or bad faith of any Trustee hereunder shall not
affect the rights of any other Trustee hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 801(d)
or Section 801(e), the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration
under any applicable Federal or State bankruptcy, insolvency or
other similar law.
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture Act, it shall
either eliminate such conflicting interest or resign to the
extent, in the manner and with the effect, and subject to the
conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee,
in its capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting interest
arising from its capacity as trustee in respect of the Securities
of any other series.
SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which
shall be
(a) a corporation organized and doing business under the
laws of the United States, any State or Territory thereof or
the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by
rule, regulation or order upon application, a corporation or
other Person organized and doing business under the laws of a
foreign government, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus
of at least $50,000,000 or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable
requirements of Section 911.
(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 911 shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of
such series delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
908 after written request therefor by the Company or by
any Holder who has been a bona fide Holder for at least
six months, or
(2) the Trustee shall cease to be eligible under
Section 909 and shall fail to resign after written
request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver
of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution
may remove the Trustee with respect to all Securities or
(y) subject to Section 814, any Holder who has been a bona
fide Holder for at least six months may, on behalf of himself
and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office
of Trustee for any cause (other than as contemplated in clause
(y) in Subsection (d) of this Section), with respect to the
Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of
Section 911. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the
applicable requirements of Section 911, become the successor
Trustee with respect to the Securities of such series and to
that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner
required by Section 911, any Holder who has been a bona fide
Holder of a Security of such series for at least six months
may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the
Securities of such series.
(f) So long as no event which is, or after notice or
lapse of time, or both, would become, an Event of Default
shall have occurred and be continuing, and except with respect
to a Trustee appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities pursuant to
Subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a
successor Trustee, effective as of a date specified therein,
and (ii) an instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee in
accordance with Section 911, the Trustee shall be deemed to
have resigned as contemplated in Subsection (b) of this
Section, the successor Trustee shall be deemed to have been
appointed by the Company pursuant to Subsection (e) of this
Section and such appointment shall be deemed to have been
accepted as contemplated in Section 911, all as of such date,
and all other provisions of this Section and Section 911 shall
be applicable to such resignation, appointment and acceptance
except to the extent inconsistent with this Subsection (f).
(g) The Company (or, should the Company fail so to act
promptly, the successor trustee at the expense of the Company)
shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the
Securities of any series by mailing written notice of such
event by first-class mail, postage prepaid, to all Holders of
Securities of such series as their names and addresses appear
in the Security Register. Each notice shall include the name
of the successor Trustee with respect to the Securities of
such series and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of all series, every
such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of all sums owed to it, execute
and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each
successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall
accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder
by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee, upon payment of all
sums owed to it, shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any instruments which fully vest in and
confirm to such successor Trustee all such rights, powers and
trusts referred to in Subsection (a) or (b) of this Section,
as the case may be.
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the
Company or any other obligor upon the Securities (other than by
reason of a relationship described in Section 311(b) of the Trust
Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purpose
of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the
legal requirements of any applicable jurisdiction, the Company
and the Trustee shall have power to appoint, and, upon the
written request of the Trustee or of the Holders of at least 33%
in principal amount of the Securities then Outstanding, the
Company shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, in either case with such
powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons, in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Company
does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default
shall have occurred and be continuing, the Trustee alone shall
have power to make such appointment.
Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so
appointed to more fully confirm to such co-trustee or separate
trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and
delivered by the Company.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject
to the following conditions:
(a) the Securities shall be authenticated and delivered,
and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with,
the Trustee hereunder, shall be exercised solely, by the
Trustee;
(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed either by the Trustee
or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act
is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Company, may
accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, if an Event of
Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of
the Company. Upon the written request of the Trustee, the
Company shall join with the Trustee in the execution and
delivery of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents
with respect to the Securities of one or more series, or Tranche
thereof, which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series or Tranche
issued upon original issuance and upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States,
any State or territory thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having
a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of
this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part
of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The
Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under
this Section, and the Trustee shall be entitled to be reimbursed
for such payments, in accordance with, and subject to the
provisions of, Section 907.
The provisions of Sections 308, 904 and 905 shall be
applicable to each Authenticating Agent.
If an appointment with respect to the Securities of one
or more series shall be made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate
certificate of authentication substantially in the following
form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated: ________________________
As Trustee
By______________________
As Authenticating
Agent
By______________________
Authorized Signatory
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not have
an office capable of authenticating Securities upon original
issuance located in a Place of Payment where the Company wishes
to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing
(which writing need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel), shall appoint, in
accordance with this Section and in accordance with such
procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of
Securities.
ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than June 1 and December 1 in
each year, commencing December 1, 1997, and at such other times
as the Trustee may request in writing, the Company shall furnish
or cause to be furnished to the Trustee information as to the
names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it
in any other capacity and afford to the Holders access to
information so preserved by it, all to such extent, if any, and
in such manner as shall be required by the Trust Indenture Act;
provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE AND COMPANY.
Not later than November 1 in each year, commencing
November 1, 1997, the Trustee shall transmit to the Holders, the
Commission and each securities exchange upon which any Securities
are listed, a report, dated as of the next preceding September
15, with respect to any events and other matters described in
Section 313(a) of the Trust Indenture Act, in such manner and to
the extent required by the Trust Indenture Act. The Trustee
shall transmit to the Holders, the Commission and each securities
exchange upon which any Securities are listed, and the Company
shall file with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the Trust
Indenture Act must be filed with the Commission and furnished to
the Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such
manner, as shall be required by the Trust Indenture Act. The
Company shall notify the Trustee of the listing of any Securities
on any securities exchange.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Company shall not consolidate with or merge into any
other corporation, or convey or otherwise transfer or lease its
properties and assets substantially as an entirety to any Person,
unless
(a) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
Person organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia,
and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of
the principal of and premium, if any, and interest, if any, on
all Outstanding Securities and the performance of every
covenant of this Indenture on the part of the Company to be
performed or observed;
(b) immediately after giving effect to such transaction
no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, conveyance, or other transfer
or lease and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for
relating to such transactions have been complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by
the Company into any other corporation or any conveyance, or
other transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section
1101, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this
Indenture and the Securities Outstanding hereunder.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities, all as
provided in Article Eleven; or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit
of the Holders of, or to remain in effect only so long as
there shall be Outstanding, Securities of one or more
specified series, or one or more specified Tranches thereof,
or to surrender any right or power herein conferred upon the
Company; or
(c) to add any additional Events of Default with respect
to all or any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this
Indenture or to add any new provision to this Indenture;
provided, however, that if such change, elimination or
addition shall adversely affect the interests of the Holders
of Securities of any series or Tranche Outstanding on the date
of such indenture supplemental hereto in any material respect,
such change, elimination or addition shall become effective
with respect to such series or Tranche only pursuant to the
provisions of Section 1202 hereof or when no Security of such
series or Tranche remains Outstanding; or
(e) to provide collateral security for all but not part
of the Securities; or
(f) to establish the form or terms of Securities of any
series or Tranche as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto
representing interest, if any, thereon and for the procedures
for the registration, exchange and replacement thereof and for
the giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(h) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee or
co-trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 911(b); or
(i) to provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all, or any series or Tranche of, the
Securities; or
(j) to change any place or places where (1) the
principal of and premium, if any, and interest, if any, on all
or any series of Securities, or any Tranche thereof, shall be
payable, (2) all or any series of Securities, or any Tranche
thereof, may be surrendered for registration of transfer, (3)
all or any series of Securities, or any Tranche thereof, may
be surrendered for exchange and (4) notices and demands to or
upon the Company in respect of all or any series of
Securities, or any Tranche thereof, and this Indenture may be
served; or
(k) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with
any other provision herein, or to make any other changes to
the provisions hereof or to add other provisions with respect
to matters or questions arising under this Indenture, provided
that such other changes or additions shall not adversely
affect the interests of the Holders of Securities of any
series or Tranche in any material respect.
Without limiting the generality of the foregoing, if the
Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be
amended and
(x) if any such amendment shall require one or more
changes to any provisions hereof or the inclusion herein
of any additional provisions, or shall by operation of
law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, this Indenture
shall be deemed to have been amended so as to conform to
such amendment to the Trust Indenture Act, and the
Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental hereto to
effect or evidence such changes or additional provisions;
or
(y) if any such amendment shall permit one or more
changes to, or the elimination of, any provisions hereof
which, at the date of the execution and delivery hereof
or at any time thereafter, are required by the Trust
Indenture Act to be contained herein, this Indenture
shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee
may, without the consent of any Holders, enter into an
indenture supplemental hereto to evidence such amendment
hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of a majority in
aggregate principal amount of the Securities of all series then
Outstanding under this Indenture, considered as one class, by Act
of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or
modifying in any manner the rights of the Holders of Securities
of such series under the Indenture; provided, however, that if
there shall be Securities of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more,
but less than all, of such series, then the consent only of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected,
considered as one class, shall be required; and provided,
further, that if the Securities of any series shall have been
issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so
directly affected, considered as one class, shall be required;
and provided, further, that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security,
or reduce the principal amount thereof or the rate of interest
thereon (or the amount of any installment of interest thereon)
or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or reduce the
amount of the principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 802, or change the coin
or currency (or other property), in which any Security or any
premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity of any Security (or,
in the case of redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder of such
Security, or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, or any Tranche thereof,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with any provision of
this Indenture or of any default hereunder and its
consequences, or reduce the requirements of Section 1304 for
quorum or voting, without, in any such case, the consent of
the Holders of each Outstanding Security of such series or
Tranche, or
(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of
any series, or any Tranche thereof, except to increase the
percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 911(b), 914 and
1201(h).
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series
of Securities, or one or more Tranches thereof, or which modifies
the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof. A waiver by a Holder of
such Holder's right to consent under this Section shall be deemed
to be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section
901) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may,
but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by
this Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such restatement
shall supersede this Indenture as theretofore in effect for all
purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES.
Securities of any series, or any Tranche thereof,
authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform, in
the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series or Tranche.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall
have been established in a Board Resolution or an Officer's
Certificate as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or the
elimination of any of such terms may be effected by means of a
supplemental Board Resolution or Officer's Certificate, as the
case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or
Officer's Certificate shall not be accepted by the Trustee or
otherwise be effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such
additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied.
Upon the acceptance thereof by the Trustee, any such supplemental
Board Resolution or Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or
all, series, or any Tranche or Tranches thereof, may be called at
any time and from time to time pursuant to this Article to make,
give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be made, given or taken by Holders of Securities of
such series or Tranches.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of
Holders of Securities of one or more, or all, series, or any
Tranche or Tranches thereof, for any purpose specified in
Section 1301, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, as the Trustee
shall determine, or, with the approval of the Company, at any
other place. Notice of every such meeting, setting forth the
time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a
meeting of the Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, by the Company or
by the Holders of 33% in aggregate principal amount of all of
such series and Tranches, considered as one class, for any
purpose specified in Section 1301, by written request setting
forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have given the notice
of such meeting within 21 days after receipt of such request
or shall not thereafter proceed to cause the meeting to be
held as provided herein, then the Company or the Holders of
Securities of such series and Tranches in the amount above
specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved by the
Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in Subsection
(a) of this Section.
(c) Any meeting of Holders of Securities of one or more,
or all, series, or any Tranche or Tranches thereof, shall be
valid without notice if the Holders of all Outstanding
Securities of such series or Tranches are present in person or
by proxy and if representatives of the Company and the Trustee
are present, or if notice is waived in writing before or after
the meeting by the Holders of all Outstanding Securities of
such series, or any Tranche or Tranches thereof, or by such of
them as are not present at the meeting in person or by proxy,
and by the Company and the Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of
Securities of one or more, or all, series, or any Tranche or
Tranches thereof, a Person shall be (a) a Holder of one or more
Outstanding Securities of such series or Tranches, or (b) a
Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such
series or Tranches by such Holder or Holders. The only Persons
who shall be entitled to attend any meeting of Holders of
Securities of any series or Tranche shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of
the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which a meeting shall have been called
as hereinbefore provided, considered as one class, shall
constitute a quorum for a meeting of Holders of Securities of
such series and Tranches; provided, however, that if any action
is to be taken at such meeting which this Indenture expressly
provides may be taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of the
Outstanding Securities of such series and Tranches, considered as
one class, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Securities of such series
and Tranches, considered as one class, shall constitute a quorum.
In the absence of a quorum within one hour of the time appointed
for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series and Tranches, be
dissolved. In any other case the meeting may be adjourned for
such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1305(e), notice
of the reconvening of any meeting adjourned for more than 30 days
shall be given as provided in Section 1302(a) not less than 10
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series and
Tranches which shall constitute a quorum.
Except as limited by Section 1202, any resolution
presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted only by the
affirmative vote of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which such meeting shall have been
called, considered as one class; provided, however, that, except
as so limited, any resolution with respect to any action which
this Indenture expressly provides may be taken by the Holders of
a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, may be adopted at a meeting
or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding
Securities of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any meeting of
Holders of Securities duly held in accordance with this Section
shall be binding on all the Holders of Securities of the series
and Tranches with respect to which such meeting shall have been
held, whether or not present or represented at the meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may
be in person or by proxy; and, to the extent permitted by law,
any such proxy shall remain in effect and be binding upon any
future Holder of the Securities with respect to which it was
given unless and until specifically revoked by the Holder or
future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as
it may deem advisable for any meeting of Holders of Securities
in regard to proof of the holding of such Securities and of
the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct
of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the
holding of Securities shall be proved in the manner specified
in Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104. Such
regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 104 or other
proof.
(c) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the
meeting shall have been called by the Company or by Holders as
provided in Section 1302(b), in which case the Company or the
Holders of Securities of the series and Tranches calling the
meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be
entitled to one vote for each $1 principal amount of
Securities held or represented by him; provided, however, that
no vote shall be cast or counted at any meeting in respect of
any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman
of the meeting shall have no right to vote, except as a Holder
of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1302 at
which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class;
and the meeting may be held as so adjourned without further
notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed
the signatures of the Holders or of their representatives by
proxy and the principal amounts and serial numbers of the
Outstanding Securities, of the series and Tranches with respect
to which the meeting shall have been called, held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports of
all votes cast at the meeting. A record of the proceedings of
each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302
and, if applicable, Section 1304. Each copy shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization,
direction, notice, consent, waiver or other action may be made,
given or taken by Holders by written instruments as provided in
Section 104.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal
of or premium, if any, or interest, if any, on any Securities, or
any part thereof, or for any claim based thereon or otherwise in
respect thereof, or of the indebtedness represented thereby, or
upon any obligation, covenant or agreement under this Indenture,
against any incorporator, shareholder, officer or director, as
such, past, present or future of the Company or of any
predecessor or successor corporation (either directly or through
the Company or a predecessor or successor corporation), whether
by virtue of any constitutional provision, statute or rule of
law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this
Indenture and all the Securities are solely corporate
obligations, and that no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, shareholder,
officer or director, past, present or future, of the Company or
of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor
corporation, because of the indebtedness hereby authorized or
under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the
Securities or to be implied herefrom or therefrom, and that any
such personal liability is hereby expressly waived and released
as a condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the Securities.
ARTICLE FIFTEEN
SECURITIES OF THE FIRST SERIES AND SECOND SERIES
SECTION 1501. DESIGNATION OF SECURITIES OF THE FIRST SERIES.
There is hereby created a series of Securities designated
"6.20% Series A Senior Notes due 2002" (herein sometimes referred
to as "Securities of the First Series") and limited in aggregate
principal amount (except as contemplated in Section 201(b)
hereof) to One Hundred Twenty-Five Million Dollars
($125,000,000). The form and terms of the Securities of the
First Series shall be established in an Officer's Certificate.
SECTION 1502. DESIGNATION OF SECURITIES OF THE SECOND SERIES.
There is hereby created a series of Securities designated
"6.20% Series A Exchange Senior Notes due 2002" (herein sometimes
referred to as "Securities of the Second Series") and limited in
aggregate principal amount (except as contemplated in Section
201(b) hereof) to One Hundred Twenty-Five Million Dollars
($125,000,000). The form and terms of the Securities of the
Second Series shall be established in an Officer's Certificate.
_________________________
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first
above written.
TEXAS UTILITIES COMPANY
By: /s/ Robert S. Shapard
----------------------
Treasurer
<PAGE>
THE BANK OF NEW YORK, Trustee
By: /s/ W.N. Gitlin
------------------------
W.N. GITLIN
Vice President
<PAGE>
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 8th day of October, 1997, before me personally
came Robert S. Shapard, to me known, who, being by me duly sworn,
did depose and say that he is the Treasurer of Texas Utilities
Company, one of the corporations described in and which executed
the foregoing instrument; and that he signed his name thereto by
authority of the Board of Directors of said corporation.
/s/ LeNae B. Davis
------------------------------
LeNae B. Davis
Notary Public, State of Texas
My Commission Expires June 23, 2000
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 9th day of October, 1997, before me personally
came W.N. Gitlin, to me known, who, being by me duly sworn, did
depose and say that he is a Vice President of The Bank of New
York, one of the corporations described in and which executed the
foregoing instrument; and that he signed his name thereto by
authority of the Board of Directors of said corporation.
/s/ Moira Feeney
---------------------------------
Moira Feeney
Notary Public, State of New York
Commission Expires Feb. 18, 1998
__________________________________________
TEXAS UTILITIES COMPANY
TO
THE BANK OF NEW YORK
TRUSTEE
_________
INDENTURE
(FOR UNSECURED DEBT SECURITIES SERIES B)
DATED AS OF OCTOBER 1, 1997
__________________________________________
<PAGE>
TABLE OF CONTENTS
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions and Other Provisions of General Application . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . 3
Company Request or Company Order . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . 3
Discount Security . . . . . . . . . . . . . . . . . 3
Dollar or $ . . . . . . . . . . . . . . . . . . . . 3
Eligible Obligations . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . . 4
Government Obligations . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . 6
Periodic Offering . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . 6
Required Currency . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . 6
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED TO BE PART OF THE INDENTURE.
<PAGE>
Securities . . . . . . . . . . . . . . . . . . . . 7
Security Register and Security Registrar . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . 7
Stated Interest Rate . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . 7
Subsidiary . . . . . . . . . . . . . . . . . . . . 7
Tranche . . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . 7
United States . . . . . . . . . . . . . . . . . . . 7
SECTION 102. Compliance Certificates and Opinions . . . 8
SECTION 103. Form of Documents Delivered to Trustee . . 8
SECTION 104. Acts of Holders . . . . . . . . . . . . . 9
SECTION 105. Notices, etc. to Trustee and Company . . . 11
SECTION 106. Notice to Holders of Securities; Waiver . 12
SECTION 107. Conflict with Trust Indenture Act . . . . 12
SECTION 108. Effect of Headings and Table of Contents . 12
SECTION 109. Successors and Assigns . . . . . . . . . . 13
SECTION 110. Separability Clause . . . . . . . . . . . 13
SECTION 111. Benefits of Indenture . . . . . . . . . . 13
SECTION 112. Governing Law . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . 13
ARTICLE TWO . . . . . . . . . . . . . . . . . . . . . . . . . 14
Security Forms . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 201. Forms Generally . . . . . . . . . . . . . 14
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE THREE . . . . . . . . . . . . . . . . . . . . . . . . 15
The Securities . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 301. Amount Unlimited; Issuable in Series . . . 15
SECTION 302. Denominations . . . . . . . . . . . . . . 18
SECTION 303. Execution, Authentication, Delivery and\
Dating . . . . . . . . . . . . . . . . 19
SECTION 304. Temporary Securities . . . . . . . . . . . 21
SECTION 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . 22
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . 23
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . 24
SECTION 308. Persons Deemed Owners . . . . . . . . . . 25
SECTION 309. Cancellation by Security Registrar . . . . 26
SECTION 310. Computation of Interest . . . . . . . . . 26
SECTION 311. Payment to Be in Proper Currency . . . . . 26
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . 27
Redemption of Securities . . . . . . . . . . . . . . . . . . 27
SECTION 401. Applicability of Article . . . . . . . . . 27
SECTION 402. Election to Redeem; Notice to Trustee . . 27
SECTION 403. Selection of Securities to Be Redeemed . . 27
SECTION 404. Notice of Redemption . . . . . . . . . . . 28
SECTION 405. Securities Payable on Redemption Date . . 29
SECTION 406. Securities Redeemed in Part . . . . . . . 29
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . 30
Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 501. Applicability of Article . . . . . . . . . 30
SECTION 502. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . 30
SECTION 503. Redemption of Securities for Sinking Fund 31
ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . 31
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 601. Payment of Principal, Premium and Interest 31
SECTION 602. Maintenance of Office or Agency . . . . . 32
SECTION 603. Money for Securities Payments to Be Held in
Trust . . . . . . . . . . . . . . . . . 32
SECTION 604. Corporate Existence . . . . . . . . . . . 34
SECTION 605. Maintenance of Properties . . . . . . . . 34
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . . . 34
SECTION 607. Waiver of Certain Covenants . . . . . . . 34
SECTION 608. Limitation on Liens . . . . . . . . . . . 35
ARTICLE SEVEN . . . . . . . . . . . . . . . . . . . . . . . . 38
Satisfaction and Discharge . . . . . . . . . . . . . . . . . 38
SECTION 701. Satisfaction and Discharge of Securities . 38
SECTION 702. Satisfaction and Discharge of Indenture . 40
SECTION 703. Application of Trust Money . . . . . . . . 41
ARTICLE EIGHT . . . . . . . . . . . . . . . . . . . . . . . . 42
Events of Default; Remedies . . . . . . . . . . . . . . . . . 42
SECTION 801. Events of Default . . . . . . . . . . . . 42
SECTION 802. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . 43
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . 44
SECTION 804. Trustee May File Proofs of Claim . . . . . 45
SECTION 805. Trustee May Enforce Claims Without Possession
of Securities . . . . . . . . . . . . . 46
SECTION 806. Application of Money Collected . . . . . . 46
SECTION 807. Limitation on Suits . . . . . . . . . . . 46
SECTION 808. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . 47
SECTION 809. Restoration of Rights and Remedies . . . . 47
SECTION 810. Rights and Remedies Cumulative . . . . . . 48
SECTION 811. Delay or Omission Not Waiver . . . . . . . 48
SECTION 812. Control by Holders of Securities . . . . . 48
SECTION 813. Waiver of Past Defaults . . . . . . . . . 48
SECTION 814. Undertaking for Costs . . . . . . . . . . 49
SECTION 815. Waiver of Stay or Extension Laws . . . . . 49
ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . 50
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 901. Certain Duties and Responsibilities . . . 50
SECTION 902. Notice of Defaults . . . . . . . . . . . . 50
SECTION 903. Certain Rights of Trustee . . . . . . . . 51
SECTION 904. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . 52
SECTION 905. May Hold Securities . . . . . . . . . . . 52
SECTION 906. Money Held in Trust . . . . . . . . . . . 52
SECTION 907. Compensation and Reimbursement . . . . . . 52
SECTION 908. Disqualification; Conflicting Interests. . 53
SECTION 909. Corporate Trustee Required; Eligibility . 54
SECTION 910. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . 54
SECTION 911. Acceptance of Appointment by Successor . . 56
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . 57
SECTION 913. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . 58
SECTION 914. Co-trustees and Separate Trustees. . . . . 58
SECTION 915. Appointment of Authenticating Agent . . . 59
ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . 61
Holders' Lists and Reports by Trustee and Company . . . . . . 61
SECTION 1001. Lists of Holders . . . . . . . . . . . . 61
SECTION 1002. Reports by Trustee and Company . . . . . 62
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . 62
Consolidation, Merger, Conveyance or Other Transfer . . . . 62
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . 62
SECTION 1102. Successor Corporation Substituted . . . . 63
ARTICLE TWELVE . . . . . . . . . . . . . . . . . . . . . . . 63
Supplemental Indentures . . . . . . . . . . . . . . . . . . . 63
SECTION 1201. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . 63
SECTION 1202. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . 65
SECTION 1203. Execution of Supplemental Indentures . . 67
SECTION 1204. Effect of Supplemental Indentures . . . . 67
SECTION 1205. Conformity With Trust Indenture Act . . . 67
SECTION 1206. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . 67
SECTION 1207. Modification Without Supplemental
Indenture . . . . . . . . . . . . . . 67
ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . 68
Meetings of Holders; Action Without Meeting . . . . . . . . . 68
SECTION 1301. Purposes for Which Meetings May Be Called 68
SECTION 1302. Call, Notice and Place of Meetings . . . 68
SECTION 1303. Persons Entitled to Vote at Meetings . . 69
SECTION 1304. Quorum; Action . . . . . . . . . . . . . 69
SECTION 1305. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment of
Meetings . . . . . . . . . . . . . . . 70
SECTION 1306. Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . 71
SECTION 1307. Action Without Meeting . . . . . . . . . 72
ARTICLE FOURTEEN . . . . . . . . . . . . . . . . . . . . . . 72
Immunity of Incorporators, Shareholders, Officers and
Directors . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1401. Liability Solely Corporate . . . . . . . 72
ARTICLE FIFTEEN . . . . . . . . . . . . . . . . . . . . . . . 72
Securities of the First Series and Second Series . . . . . . 72
SECTION 1501. Designation of Securities of the First
Series. . . . . . . . . . . . . . . . 72
SECTION 1502. Designation of Securities of the Second
Series. . . . . . . . . . . . . . . . 73
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . 70
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 70
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . 71
<PAGE>
TEXAS UTILITIES COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF OCTOBER 1, 1997
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<section symbol>310 (a)(1) . . . . . . . . . . . . . . . . . 909
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 909
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 914
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 908
910
<section symbol>311 (a) . . . . . . . . . . . . . . . . . . . 913
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
<section symbol>312 (a) . . . . . . . . . . . . . . . . . . 1001
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
<section symbol>313 (a) . . . . . . . . . . . . . . . . . . 1002
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
<section symbol>314 (a) . . . . . . . . . . . . . . . . . . 1002
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . 606
(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
<section symbol>315 (a) . . . . . . . . . . . . . . . . . . . 901
903
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 814
<section symbol>316 (a) . . . . . . . . . . . . . . . . . . . 812
813
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 802
812
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 813
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 808
<section symbol>317 (a)(1) . . . . . . . . . . . . . . . . . 803
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 804
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 603
<section symbol>318 (a) . . . . . . . . . . . . . . . . . . . 107
<PAGE>
INDENTURE, dated as of October 1, 1997, between TEXAS
UTILITIES COMPANY, a corporation duly organized and existing
under the laws of the State of Texas (herein called the
"Company"), having its principal office at Energy Plaza, 1601
Bryan Street, Dallas, Texas 75201, and THE BANK OF NEW YORK, a
corporation of the State of New York, having its principal
corporate trust office at 101 Barclay Street, New York, New York
10286, as Trustee (herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the "Securities"), in an unlimited
aggregate principal amount to be issued in one or more series as
contemplated herein; and all acts necessary to make this
Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires,
capitalized terms used herein shall have the meanings assigned to
them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as
well as the singular;
(b) all terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles in the United States,
and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United
States at the date of such computation or, at the election of
the Company from time to time, at the date of the execution
and delivery of this Indenture; provided, however, that in
determining generally accepted accounting principles
applicable to the Company, the Company shall, to the extent
required, conform to any order, rule or regulation of any
administrative agency, regulatory authority or other
governmental body having jurisdiction over the Company; and
(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
Certain terms, used principally in Article Nine, are
defined in that Article.
"ACT", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "CONTROL" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or through
one or more intermediaries, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person (other than the
Company or an Affiliate of the Company) authorized by the Trustee
pursuant to Section 915 to act on behalf of the Trustee to
authenticate one or more series of Securities.
"AUTHORIZED OFFICER" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters
relating to this Indenture.
"BOARD OF DIRECTORS" means either the board of directors
of the Company or any committee thereof duly authorized to act in
respect of matters relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered
to the Trustee.
"BUSINESS DAY", when used with respect to a Place of
Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation
or executive order to remain closed, except as may be otherwise
specified as contemplated by Section 301.
"COMMISSION" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934, as amended, or, if at any time
after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any,
performing such duties at such time.
"COMPANY" means the Person named as the "Company" in the
first paragraph of this Indenture until a successor Person shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written
request or order signed in the name of the Company by an
Authorized Officer and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee
at which at any particular time its corporate trust business
shall be principally administered, which office at the date of
execution and delivery of this Indenture is located at 101
Barclay Street, New York, New York 10286.
"CORPORATION" means a corporation, association, company,
joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section
307.
"DISCOUNT SECURITY" means any Security which provides for
an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 802. "Interest" with respect to a
Discount Security means interest, if any, borne by such Security
at a Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private
debts.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Securities denominated in Dollars,
Government Obligations; or
(b) with respect to Securities denominated in a currency
other than Dollars or in a composite currency, such other
obligations or instruments as shall be specified with respect
to such Securities, as contemplated by Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section
801.
"GOVERNMENTAL AUTHORITY" means the government of the
United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any of the foregoing, or any department,
agency, authority or other instrumentality of any of the
foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States and entitled to the benefit of the full
faith and credit thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership interest in
obligations described in clause (a) above or in any specific
interest or principal payments due in respect thereof;
provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or
trust company (which may include the Trustee or any Paying
Agent) subject to Federal or state supervision or examination
with a combined capital and surplus of at least $50,000,000;
and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to
the holders of such certificates, depositary receipts or other
instruments the full amount received by such custodian in
respect of such obligations or specific payments and shall not
be permitted to make any deduction therefrom.
"HOLDER" means a Person in whose name a Security is registered
in the Security Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall
include the terms of a particular series of Securities
established as contemplated by Section 301.
"INTEREST PAYMENT DATE", when used with respect to any
Security, means the Stated Maturity of an installment of interest
on such Security.
"MATURITY", when used with respect to any Security, means the
date on which the principal of such Security or an installment of
principal becomes due and payable as provided in such Security or
in this Indenture, whether at the Stated Maturity, by declaration
of acceleration, upon call for redemption or otherwise.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be counsel for the Company, or other counsel acceptable to
the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(a) Securities theretofore canceled or delivered to the
Security Registrar for cancellation;
(b) Securities deemed to have been paid in accordance
with Section 701; and
(c) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are
held by a bona fide purchaser or purchasers in whose hands
such Securities are valid obligations of the Company;
provided, however, that in determining whether or not the Holders
of the requisite principal amount of the Securities Outstanding
under this Indenture, or the Outstanding Securities of any series
or Tranche, have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Securities,
(x) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor (unless the Company, such Affiliate or such
obligor owns all Securities Outstanding under this Indenture,
or (except for the purposes of actions to be taken by Holders
of (i) more than one series voting as a class under Section
812 or (ii) more than one series or more than one Tranche, as
the case may be, voting as a class under Section 1202) all
Outstanding Securities of each such series and each such
Tranche, as the case may be, determined without regard to this
clause (x)) shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon
any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so
disregarded; provided, however, that Securities so owned which
have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor; and
(y) the principal amount of a Discount Security that
shall be deemed to be Outstanding for such purposes shall be
the amount of the principal thereof that would be due and
payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 802;
provided, further, that, in the case of any Security the
principal of which is payable from time to time without
presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount
thereof less the aggregate amount of principal thereof
theretofore paid.
"PAYING AGENT" means any Person, including the Company,
authorized by the Company to pay the principal of, and premium,
if any, or interest, if any, on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a
series from time to time any or all of the specific terms of
which Securities, including without limitation the rate or rates
of interest, if any, thereon, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon
the issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any Governmental
Authority.
"PLACE OF PAYMENT", when used with respect to the Securities
of any series, or any Tranche thereof, means the place or places,
specified as contemplated by Section 301, at which, subject to
Section 602, principal of and premium, if any, and interest, if
any, on the Securities of such series or Tranche are payable.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered
under Section 306 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"REDEMPTION DATE", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 311.
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any securities
authenticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 305.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by
the Trustee pursuant to Section 307.
"STATED INTEREST RATE" means a rate (whether fixed or
variable) at which an obligation by its terms is stated to bear
simple interest. Any calculation or other determination to be
made under this Indenture by reference to the Stated Interest
Rate on a Security shall be made without regard to the effective
interest cost to the Company of such Security and without regard
to the Stated Interest Rate on, or the effective cost to the
Company of, any other indebtedness in respect of which the
Company's obligations are evidenced or secured in whole or in
part by such Security.
"STATED MATURITY", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means
the date on which the principal of such obligation or such
installment of principal or interest is stated to be due and
payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"SUBSIDIARY" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries,
or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock that
ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
"TRANCHE" means a group of Securities which (a) are of the
same series and (b) have identical terms except as to principal
amount and/or date of issuance.
"TRUST INDENTURE ACT" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in effect at
such time.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have
become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities
of that series.
"UNITED STATES" means the United States of America, its
Territories, its possessions and other areas subject to its
political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture,
upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the
Company shall, if requested by the Trustee, furnish to the
Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action (including any covenants compliance with which
constitutes a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to
which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each Person signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
Person, such Person has made such examination or investigation
as is necessary to enable such Person to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such Person, such condition or covenant has been complied
with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which such Officer's Certificate or
opinion are based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.
Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officer's Certificate, Opinion of Counsel or
other document or instrument, a clerical, typographical or other
inadvertent or unintentional error or omission shall be
discovered therein, a new document or instrument may be
substituted therefor in corrected form with the same force and
effect as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution and/or
delivery thereof, such substitute document or instrument shall be
deemed to have been executed and/or delivered as of the date or
dates required with respect to the document or instrument for
which it is substituted. Anything in this Indenture to the
contrary notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at the
request of the Company which could not have been taken had the
original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or
otherwise rendered ineffective but shall be and remain in full
force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the
generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to
the benefits of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, election, waiver or other action provided by
this Indenture to be made, given or taken by Holders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing or, alternatively,
may be embodied in and evidenced by the record of Holders
voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders duly called
and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments and so voting at any such meeting.
Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of
a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 901) conclusive in favor of
the Trustee and the Company, if made in the manner provided in
this Section. The record of any meeting of Holders shall be
proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit
of a witness of such execution or by a certificate of a notary
public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which
the Trustee and the Company deem sufficient. Where such
execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) The principal amount (except as otherwise
contemplated in clause (y) of the first proviso to the
definition of Outstanding) and serial numbers of Securities
held by any Person, and the date of holding the same, shall be
proved by the Security Register.
(d) Any request, demand, authorization, direction,
notice, consent, election, waiver or other Act of a Holder
shall bind every future Holder of the same Security and the
Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) Until such time as written instruments shall have
been delivered to the Trustee with respect to the requisite
percentage of principal amount of Securities for the action
contemplated by such instruments, any such instrument executed
and delivered by or on behalf of a Holder may be revoked with
respect to any or all of such Securities by written notice by
such Holder or any subsequent Holder, proven in the manner in
which such instrument was proven.
(f) Securities of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and
shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by such Act of
Holders. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform,
in the opinion of the Trustee and the Company, to such action
may be prepared and executed by the Company and authenticated
and delivered by the Trustee in exchange for Outstanding
Securities of such series or Tranche.
(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, fix in
advance a record date for the determination of Holders
entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be
Holders for the purposes of determining whether Holders of the
requisite proportion of the Outstanding Securities have
authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be
computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an
officer or other responsible employee of the addressee, or
transmitted by facsimile transmission or other direct written
electronic means to such telephone number or other electronic
communications address as the parties hereto shall from time to
time designate, or transmitted by certified or registered mail,
charges prepaid, to the applicable address set opposite such
party's name below or to such other address as either party
hereto may from time to time designate:
If to the Trustee, to:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Vice President, Corporate Trust
Administration
Telephone: (212) 815-5375
Telecopy: (212) 815-5915
If to the Company, to:
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Attention: Treasurer
Telephone: (214) 812-4646
Telecopy: (214) 812-3366
Any communication contemplated herein shall be deemed to
have been made, given, furnished and filed if personally
delivered, on the date of delivery, if transmitted by facsimile
transmission or other direct written electronic means, on the
date of transmission, and if transmitted by certified or
registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given, and shall be deemed given, to
Holders if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder
as it appears in the Security Register, not later than the latest
date, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice to Holders by mail, then such notification as
shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
Any notice required by this Indenture may be waived in
writing by the Person entitled to receive such notice, either
before or after the event otherwise to be specified therein, and
such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof which is required or
deemed to be included in this Indenture by, or is otherwise
governed by, any of the provisions of the Trust Indenture Act,
such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and
the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the
Company and Trustee shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto,
their successors hereunder and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT THE LAW OF ANY OTHER JURISDICTION
SHALL BE MANDATORILY APPLICABLE.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities other than a
provision in Securities of any series, or any Tranche thereof, or
in the Board Resolution or Officer's Certificate which
establishes the terms of the Securities of such series or
Tranche, which specifically states that such provision shall
apply in lieu of this Section) payment of interest or principal
and premium, if any, need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at
such Place of Payment, with the same force and effect, and in the
same amount, as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, as the case may be,
and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to such
Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in
substantially the form or forms thereof established in the
indenture supplemental hereto establishing such series or in a
Board Resolution establishing such series, or in an Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form or
forms of Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a Board
Resolution, such Board Resolution and Officer's Certificate, if
any, shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
Unless otherwise specified as contemplated by Sections
301 or 1201(g), the Securities of each series shall be issuable
in registered form without coupons. The definitive Securities
shall be produced in such manner as shall be determined by the
officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
Dated:
_________________________________
as Trustee
By: _____________________________
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series.
Subject to the last paragraph of this Section, prior to the
authentication and delivery of Securities of any series there
shall be established by specification in a supplemental indenture
or in a Board Resolution, or in an Officer's Certificate pursuant
to a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from
Securities of all other series);
(b) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 406 or 1206 and
except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered
hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of such series,
or any Tranche thereof, shall be payable on any Interest
Payment Date, if other than the Persons in whose names such
Securities (or one or more Predecessor Securities) are
registered at the close of business on the Regular Record Date
for such interest;
(d) the date or dates on which the principal of the
Securities of such series, or any Tranche thereof, is payable
or any formulary or other method or other means by which such
date or dates shall be determined, by reference to an index or
other fact or event ascertainable outside of this Indenture or
otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension);
(e) the rate or rates at which the Securities of such
series, or any Tranche thereof, shall bear interest, if any
(including the rate or rates at which overdue principal shall
bear interest, if different from the rate or rates at which
such Securities shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or
interest shall bear interest, if any), or any formulary or
other method or other means by which such rate or rates shall
be determined, by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise; the date
or dates from which such interest shall accrue; the Interest
Payment Dates on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on such
Securities on any Interest Payment Date; and the basis of
computation of interest, if other than as provided in Section
310;
(f) the place or places at which or methods by which (1)
the principal of and premium, if any, and interest, if any, on
Securities of such series, or any Tranche thereof, shall be
payable, (2) registration of transfer of Securities of such
series, or any Tranche thereof, may be effected, (3) exchanges
of Securities of such series, or any Tranche thereof, may be
effected and (4) notices and demands to or upon the Company in
respect of the Securities of such series, or any Tranche
thereof, and this Indenture may be served; the Security
Registrar for such series or Tranche; and if such is the case,
that the principal of such Securities shall be payable without
presentment or surrender thereof;
(g) the period or periods within which, or the date or
dates on which, the price or prices at which and the terms and
conditions upon which the Securities of such series, or any
Tranche thereof, may be redeemed, in whole or in part, at the
option of the Company and any restrictions on such
redemptions, including but not limited to a restriction on a
partial redemption by the Company of the Securities of any
series, or any Tranche thereof, resulting in delisting of such
Securities from any national exchange;
(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series,
or any Tranche thereof, pursuant to any sinking fund or other
mandatory redemption provisions or at the option of a Holder
thereof and the period or periods within which or the date or
dates on which, the price or prices at which and the terms and
conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation,
and applicable exceptions to the requirements of Section 404
in the case of mandatory redemption or redemption at the
option of the Holder;
(i) the denominations in which Securities of such
series, or any Tranche thereof, shall be issuable if other
than denominations of $1,000 and any integral multiple
thereof;
(j) the currency or currencies, including composite
currencies, in which payment of the principal of and premium,
if any, and interest, if any, on the Securities of such
series, or any Tranche thereof, shall be payable (if other
than in Dollars);
(k) if the principal of or premium, if any, or interest,
if any, on the Securities of such series, or any Tranche
thereof, are to be payable, at the election of the Company or
a Holder thereof, in a coin or currency other than that in
which the Securities are stated to be payable, the period or
periods within which and the terms and conditions upon which,
such election may be made;
(l) if the principal of or premium, if any, or interest,
if any, on the Securities of such series, or any Tranche
thereof, are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in securities or
other property, the type and amount of such securities or
other property, or the formulary or other method or other
means by which such amount shall be determined, and the period
or periods within which, and the terms and conditions upon
which, any such election may be made;
(m) if the amount payable in respect of principal of or
premium, if any, or interest, if any, on the Securities of
such series, or any Tranche thereof, may be determined with
reference to an index or other fact or event ascertainable
outside of this Indenture, the manner in which such amounts
shall be determined to the extent not established pursuant to
clause (e) of this paragraph;
(n) if other than the principal amount thereof, the
portion of the principal amount of Securities of such series,
or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant
to Section 802;
(o) any Events of Default, in addition to those
specified in Section 801, with respect to the Securities of
such series, and any covenants of the Company for the benefit
of the Holders of the Securities of such series, or any
Tranche thereof, in addition to those set forth in Article
Six;
(p) the terms, if any, pursuant to which the Securities
of such series, or any Tranche thereof, may be converted into
or exchanged for shares of capital stock or other securities
of the Company or any other Person;
(q) the obligations or instruments, if any, which shall
be considered to be Eligible Obligations in respect of the
Securities of such series, or any Tranche thereof, denominated
in a currency other than Dollars or in a composite currency,
and any additional or alternative provisions for the
reinstatement of the Company's indebtedness in respect of such
Securities after the satisfaction and discharge thereof as
provided in Section 701;
(r) if the Securities of such series, or any Tranche
thereof, are to be issued in global form, (i) any limitations
on the rights of the Holder or Holders of such Securities to
transfer or exchange the same or to obtain the registration of
transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and
all other matters incidental to such Securities;
(s) if the Securities of such series, or any Tranche
thereof, are to be issuable as bearer securities, any and all
matters incidental thereto which are not specifically
addressed in a supplemental indenture as contemplated by
clause (g) of Section 1201;
(t) to the extent not established pursuant to clause (r)
of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series, or any Tranche
thereof, to transfer or exchange such Securities or to obtain
the registration of transfer thereof; and if a service charge
will be made for the registration of transfer or exchange of
Securities of such series, or any Tranche thereof, the amount
or terms thereof;
(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of
such series, or any Tranche thereof;
(v) any collateral security, assurance or guarantee for
the Securities of such series;
(w) the non-applicability of Section 608 to the
Securities of such Series or any exceptions or modifications
of Section 608 with respect to the Securities of such Series;
(x) any rights or duties of another Person to assume the
obligations of the Company with respect to the Securities of
such series (whether as joint obligor, primary obligor,
secondary obligor or substitute obligor) and any rights or
duties to discharge and release any obligor with respect to
the Securities of such series or the Indenture to the extent
related to such series; and
(y) any other terms of the Securities of such series, or
any Tranche thereof, not inconsistent with the provisions of
this Indenture.
With respect to Securities of a series subject to a
Periodic Offering, the indenture supplemental hereto or the Board
Resolution which establishes such series, or the Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, as the case may be, may provide general terms or
parameters for Securities of such series and provide either that
the specific terms of Securities of such series, or any Tranche
thereof, shall be specified in a Company Order or that such terms
shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by
the clause (b) of Section 303.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
the Securities of each series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
the Securities shall be executed on behalf of the Company by an
Authorized Officer and may have the corporate seal of the Company
affixed thereto or reproduced thereon attested by any other
Authorized Officer or by the Secretary or an Assistant Secretary
of the Company. The signature of any or all of these officers on
the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of execution Authorized Officers
or the Secretary or an Assistant Secretary of the Company shall
bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication
and delivery of such Securities or did not hold such offices at
the date of such Securities.
The Trustee shall authenticate and deliver Securities of
a series, for original issue, at one time or from time to time in
accordance with the Company Order referred to below, upon receipt
by the Trustee of:
(a) the instrument or instruments establishing the form
or forms and terms of such series, as provided in Sections 201
and 301;
(b) a Company Order requesting the authentication and
delivery of such Securities and, to the extent that the terms
of such Securities shall not have been established in an
indenture supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental indenture
or Board Resolution, all as contemplated by Sections 201 and
301, either (i) establishing such terms or (ii) in the case of
Securities of a series subject to a Periodic Offering,
specifying procedures, acceptable to the Trustee, by which
such terms are to be established (which procedures may
provide, to the extent acceptable to the Trustee, for
authentication and delivery pursuant to oral or electronic
instructions from the Company or any agent or agents thereof,
which oral instructions are to be promptly confirmed
electronically or in writing), in either case in accordance
with the instrument or instruments delivered pursuant to
clause (a) above;
(c) the Securities of such series, executed on behalf of
the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have been
duly authorized by the Company and have been established
in conformity with the provisions of this Indenture;
(ii) the terms of such Securities have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture; and
(iii) such Securities, when authenticated and
delivered by the Trustee and issued and delivered by the
Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to
the benefits provided by this Indenture, and enforceable
in accordance with their terms, subject, as to
enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or
at law);
provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to
receive such Opinion of Counsel only once at or prior to the time
of the first authentication of such Securities (provided that
such Opinion of Counsel addresses the authentication and delivery
of all Securities of such series) and that in lieu of the
opinions described in clauses (ii) and (iii) above Counsel may
opine that:
(x) when the terms of such Securities shall have
been established pursuant to a Company Order or Orders or
pursuant to such procedures (acceptable to the Trustee)
as may be specified from time to time by a Company Order
or Orders, all as contemplated by and in accordance with
the instrument or instruments delivered pursuant to
clause (a) above, such terms will have been duly
authorized by the Company and will have been established
in conformity with the provisions of this Indenture; and
(y) such Securities, when authenticated and
delivered by the Trustee in accordance with this
Indenture and the Company Order or Orders or specified
procedures referred to in paragraph (x) above and issued
and delivered by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will
constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by the
Indenture, and enforceable in accordance with their
terms, subject, as to enforcement, to laws relating to or
affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy and insolvency
laws, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding
in equity or at law).
With respect to Securities of a series subject to a
Periodic Offering, the Trustee may conclusively rely, as to the
authorization by the Company of any of such Securities, the form,
terms thereof and the legality, validity, binding effect and
enforceability thereof, and compliance of the authentication and
delivery thereof with the terms and conditions of this Indenture,
upon the Opinion of Counsel and other documents delivered
pursuant to Sections 201 and 301 and this Section, as applicable,
at or prior to the time of the first authentication of Securities
of such series unless and until such opinion or other documents
have been superseded or revoked or expire by their terms. In
connection with the authentication and delivery of Securities of
a series subject to a Periodic Offering, the Trustee shall be
entitled to assume that the Company's instructions to
authenticate and deliver such Securities do not violate any
applicable law or any applicable rule, regulation or order of any
Governmental Authority having jurisdiction over the Company.
If the form or terms of the Securities of any series have
been established by or pursuant to a Board Resolution or an
Officer's Certificate as permitted by Sections 201 or 301, the
Trustee shall not be required to authenticate such Securities if
the issuance of such Securities pursuant to this Indenture will
materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the
Trustee.
Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
each Security shall be dated the date of its authentication.
Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, no Security shall be
entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating
Agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and
delivered hereunder to the Company, or any Person acting on its
behalf, but shall never have been issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes
of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be
entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any
series, or any Tranche thereof, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities;
provided, however, that temporary Securities need not recite
specific redemption, sinking fund, conversion or exchange
provisions.
Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche
thereof, after the preparation of definitive Securities of such
series or Tranche, the temporary Securities of such series or
Tranche shall be exchangeable, without charge to the Holder
thereof, for definitive Securities of such series or Tranche upon
surrender of such temporary Securities at the office or agency of
the Company maintained pursuant to Section 602 in a Place of
Payment for such Securities. Upon such surrender of temporary
Securities for such exchange, the Company shall, except as
aforesaid, execute and the Trustee shall authenticate and deliver
in exchange therefor definitive Securities of the same series and
Tranche of authorized denominations and of like tenor and
aggregate principal amount.
Until exchanged in full as hereinabove provided,
temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of
the same series and Tranche and of like tenor authenticated and
delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall cause to be kept in each office
designated pursuant to Section 602, with respect to the
Securities of each series, a register (all registers kept in
accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series, or any Tranche
thereof, and the registration of transfer thereof. The Company
shall designate one Person to maintain the Security Register for
the Securities of each series on a consolidated basis, and such
Person is referred to herein, with respect to such series, as the
"Security Registrar." Anything herein to the contrary
notwithstanding, the Company may designate one or more of its
offices as an office in which a register with respect to the
Securities of one or more series shall be maintained, and the
Company may designate itself the Security Registrar with respect
to one or more of such series. The Security Register shall be
open for inspection by the Trustee and the Company at all
reasonable times.
Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, or any Tranche
thereof, upon surrender for registration of transfer of any
Security of such series or Tranche at the office or agency of the
Company maintained pursuant to Section 602 in a Place of Payment
for such series or Tranche, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities
of the same series and Tranche, of authorized denominations and
of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, or any Tranche
thereof, any Security of such series or Tranche may be exchanged
at the option of the Holder, for one or more new Securities of
the same series and Tranche, of authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities delivered upon any registration of
transfer or exchange of Securities shall be valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
Every Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company,
the Trustee or the Security Registrar) be duly endorsed or shall
be accompanied by a written instrument of transfer in form
satisfactory to the Company, the Trustee or the Security
Registrar, as the case may be, duly executed by the Holder
thereof or his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301
with respect to Securities of any series, or any Tranche thereof,
no service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant
to Section 304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or to
provide for the registration of transfer of or the exchange of
(a) Securities of any series, or any Tranche thereof, during a
period of 15 days immediately preceding the date notice is to be
given identifying the serial numbers of the Securities of such
series or Tranche called for redemption or (b) any Security so
selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series
and Tranche, and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the ownership of
and the destruction, loss or theft of any Security and (b) such
security or indemnity as may be reasonably required by them to
save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such
Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and Tranche,
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security
shall be at any time enforceable by anyone other than the Holder
of such new Security, and any such new Security shall be entitled
to all the benefits of this Indenture equally and proportionately
with any and all other Securities of such series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche
thereof, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the related
Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a date
(herein called a "Special Record Date") for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment,
and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense
of the Company, shall promptly cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at the address of such
Holder as it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such
Special Record Date.
(b) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Security is registered as the absolute owner of such Security for
the purpose of receiving payment of principal of and premium, if
any, and (subject to Sections 305 and 307) interest, if any, on
such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Security Registrar, be delivered to the
Security Registrar and, if not theretofore canceled, shall be
promptly canceled by the Security Registrar. The Company may at
any time deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever or which
the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar.
No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled
Securities held by the Security Registrar shall be disposed of in
accordance with a Company Order delivered to the Security
Registrar and the Trustee, and the Security Registrar shall
promptly deliver a certificate of disposition to the Trustee and
the Company unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Securities be returned to it.
The Security Registrar shall promptly deliver evidence of any
cancellation of a Security in accordance with this Section 309 to
the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section
301 for Securities of any series, or any Tranche thereof,
interest on the Securities of each series shall be computed on
the basis of a 360-day year consisting of twelve 30-day months
and for any period shorter than a full month, on the basis of the
actual number of days elapsed in such period.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series, or any
Tranche thereof, denominated in any currency other than Dollars
or in a composite currency (the "Required Currency"), except as
otherwise specified with respect to such Securities as
contemplated by Section 301, the obligation of the Company to
make any payment of the principal thereof, or the premium or
interest thereon, shall not be discharged or satisfied by any
tender by the Company, or recovery by the Trustee, in any
currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the Trustee timely
holding the full amount of the Required Currency then due and
payable. If any such tender or recovery is in a currency other
than the Required Currency, the Trustee may take such actions as
it considers appropriate to exchange such currency for the
Required Currency. The costs and risks of any such exchange,
including without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall
remain fully liable for any shortfall or delinquency in the full
amount of Required Currency then due and payable, and in no
circumstances shall the Trustee be liable therefor except in the
case of its negligence or willful misconduct.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series, or any Tranche thereof, which
are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified
as contemplated by Section 301 for Securities of such series or
Tranche) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution or an Officer's
Certificate. The Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of
such Securities to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere
in this Indenture or (b) pursuant to an election of the Company
which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction
or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series, or any
Tranche thereof, are to be redeemed, the particular Securities to
be redeemed shall be selected by the Trustee from the Outstanding
Securities of such series or Tranche not previously called for
redemption, by such method as shall be provided for any
particular series, or, in the absence of any such provision, by
such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of
such series or Tranche or any integral multiple thereof) of the
principal amount of Securities of such series or Tranche of a
denomination larger than the minimum authorized denomination for
Securities of such series or Tranche; provided, however, that if,
as indicated in an Officer's Certificate, the Company shall have
offered to purchase all or any principal amount of the Securities
then Outstanding of any series, or any Tranche thereof, and less
than all of such Securities as to which such offer was made shall
have been tendered to the Company for such purchase, the Trustee,
if so directed by Company Order, shall select for redemption all
or any principal amount of such Securities which have not been so
tendered.
The Trustee shall promptly notify the Company and the
Security Registrar in writing of the Securities selected for
redemption and, in the case of any Securities selected to be
redeemed in part, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal
amount of such Securities which has been or is to be redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner
provided in Section 106 to the Holders of the Securities to be
redeemed not less than 30 nor more than 60 days prior to the
Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price (if known),
(c) if less than all the Securities of any series or
Tranche are to be redeemed, the identification of the
particular Securities to be redeemed and the portion of the
principal amount of any Security to be redeemed in part,
(d) that on the Redemption Date the Redemption Price,
together with accrued interest, if any, to the Redemption
Date, will become due and payable upon each such Security to
be redeemed and, if applicable, that interest thereon will
cease to accrue on and after said date,
(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any, unless it shall have been specified as
contemplated by Section 301 with respect to such Securities
that such surrender shall not be required,
(f) that the redemption is for a sinking or other fund,
if such is the case, and
(g) such other matters as the Company shall deem
desirable or appropriate.
Unless otherwise specified with respect to any Securities
in accordance with Section 301, with respect to any notice of
redemption of Securities at the election of the Company, unless,
upon the giving of such notice, such Securities shall be deemed
to have been paid in accordance with Section 701, such notice may
state that such redemption shall be conditional upon the receipt
by the Paying Agent or Agents for such Securities, on or prior to
the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on
such Securities and that if such money shall not have been so
received such notice shall be of no force or effect and the
Company shall not be required to redeem such Securities. In the
event that such notice of redemption contains such a condition
and such money is not so received, the redemption shall not be
made and within a reasonable time thereafter notice shall be
given, in the manner in which the notice of redemption was given,
that such money was not so received and such redemption was not
required to be made, and the Paying Agent or Agents for the
Securities otherwise to have been redeemed shall promptly return
to the Holders thereof any of such Securities which had been
surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company, and any notice of non-satisfaction of a
condition for redemption as aforesaid, shall be given by the
Company or, at the Company's request, by the Security Registrar
in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security
Registrar in the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and
the conditions, if any, set forth in such notice having been
satisfied, the Securities or portions thereof so to be redeemed
shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price
and accrued interest, if any) such Securities or portions
thereof, if interest-bearing, shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with
such notice, such Security or portion thereof shall be paid by
the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that
no such surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to such
Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such
Security, any installment of interest on any Security the Stated
Maturity of which installment is on or prior to the Redemption
Date shall be payable to the Holder of such Security, or one or
more Predecessor Securities, registered as such at the close of
business on the related Regular Record Date according to the
terms of such Security and subject to the provisions of Section
307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be
redeemed only in part at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security
or Securities of the same series and Tranche, of any authorized
denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so
surrendered.
ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of any series,
or any Tranche thereof, except as otherwise specified as
contemplated by Section 301 for Securities of such series or
Tranche.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series, or any Tranche
thereof, is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of any series, or any
Tranche thereof, is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any
series, or any Tranche thereof, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section
502. Each sinking fund payment shall be applied to the
redemption of Securities of the series or Tranche in respect of
which it was made as provided for by the terms of such
Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.
The Company (a) may deliver to the Trustee Outstanding
Securities (other than any previously called for redemption) of a
series or Tranche in respect of which a mandatory sinking fund
payment is to be made and (b) may apply as a credit Securities of
such series or Tranche which have been redeemed either at the
election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case
in satisfaction of all or any part of such mandatory sinking fund
payment with respect to the Securities of such series; provided,
however, that no Securities shall be applied in satisfaction of a
mandatory sinking fund payment if such Securities shall have been
previously so applied. Securities so applied shall be received
and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment
date for the Securities of any series, or any Tranche thereof,
the Company shall deliver to the Trustee an Officer's Certificate
specifying:
(a) the amount of the next succeeding mandatory sinking
fund payment for such series or Tranche;
(b) the amount, if any, of the optional sinking fund
payment to be made together with such mandatory sinking fund
payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by the payment of cash;
(e) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by delivering and crediting
Securities of such series or Tranche pursuant to Section 502
and stating the basis for such credit and that such Securities
have not previously been so credited, and the Company shall
also deliver to the Trustee any Securities to be so delivered.
If the Company shall not deliver such Officer's Certificate,
the next succeeding sinking fund payment for such series shall
be made entirely in cash in the amount of the mandatory
sinking fund payment. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 403 and cause notice of the
redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 404.
Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner
stated in Sections 405 and 406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if
any, and interest, if any, on the Securities of each series in
accordance with the terms of such Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for
the Securities of each series, or any Tranche thereof, an office
or agency where payment of such Securities shall be made, where
the registration of transfer or exchange of such Securities may
be effected and where notices and demands to or upon the Company
in respect of such Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of each such office
or agency and prompt notice to the Holders of any such change in
the manner specified in Section 106. If at any time the Company
shall fail to maintain any such required office or agency in
respect of Securities of any series, or any Tranche thereof, or
shall fail to furnish the Trustee with the address thereof,
payment of such Securities shall be made, registration of
transfer or exchange thereof may be effected and notices and
demands in respect thereof may be served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the
Trustee as its agent for all such purposes in any such event.
The Company may also from time to time designate one or
more other offices or agencies with respect to the Securities of
one or more series, or any Tranche thereof, for any or all of the
foregoing purposes and may from time to time rescind such
designations; provided, however, that, unless otherwise specified
as contemplated by Section 301 with respect to the Securities of
such series or Tranche, no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain
an office or agency for such purposes in each Place of Payment
for such Securities in accordance with the requirements set forth
above. The Company shall give prompt written notice to the
Trustee, and prompt notice to the Holders in the manner specified
in Section 106, of any such designation or rescission and of any
change in the location of any such other office or agency.
Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an
office of the Company, in which event the Company shall perform
all functions to be performed at such office or agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying
Agent with respect to the Securities of any series, or any
Tranche thereof, it shall, on or before each due date of the
principal of and premium, if any, and interest, if any, on any of
such Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the
principal and premium or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided. The Company shall promptly notify the Trustee of any
failure by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any, or
interest, if any, on such Securities.
Whenever the Company shall have one or more Paying Agents
for the Securities of any series, or any Tranche thereof, it
shall, on or before each due date of the principal of and
premium, if any, and interest, if any, on such Securities,
deposit with such Paying Agents sums sufficient (without
duplication) to pay the principal and premium or interest so
becoming due, such sums to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the
Securities of any series, or any Tranche thereof, other than the
Company or the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such
Paying Agent shall:
(a) hold all sums held by it for the payment of the
principal of and premium, if any, or interest, if any, on such
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the
Company (or any other obligor upon such Securities) to make
any payment of principal of or premium, if any, or interest,
if any, on such Securities; and
(c) at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent and furnish to the Trustee such information as it
possesses regarding the names and addresses of the Persons
entitled to such sums.
The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent and, if so stated
in a Company Order delivered to the Trustee, in accordance with
the provisions of Article Seven; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the
principal of and premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or, if
then held by the Company, shall be discharged from such trust;
and, upon such payment or discharge, the Holder of such Security
shall, as an unsecured general creditor and not as a Holder of an
Outstanding Security, look only to the Company for payment of the
amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to
the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such
money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will
be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article
Eleven, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property
owned in common with others, make reasonable effort to cause) all
its properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working
order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made
all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may
be necessary so that the business carried on in connection
therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from
discontinuing, or causing the discontinuance of, the operation
and maintenance of any of its properties if such discontinuance
is, in the judgment of the Company, desirable in the conduct of
its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than June 1, commencing June 1, 1998, the
Company shall deliver to the Trustee an Officer's Certificate
which need not comply with Section 102, executed by the principal
executive officer, the principal financial officer or the
principal accounting officer of the Company, as to such officer's
knowledge of the Company's compliance with all conditions and
covenants under this Indenture, such compliance to be determined
without regard to any period of grace or requirement of notice
under this Indenture.
SECTION 607. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply
with any term, provision or condition set forth in (a) Section
602 or any additional covenant or restriction specified with
respect to the Securities of any series, or any Tranche thereof,
as contemplated by Section 301, if before the time for such
compliance the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series and Tranches
with respect to which compliance with Section 602 or such
additional covenant or restriction is to be omitted, considered
as one class, shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition and (b) Section 604, 605 or
Article Eleven if before the time for such compliance the Holders
of a majority in principal amount of Securities Outstanding under
this Indenture shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition; but, in the case of (a) or
(b), no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of
the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and
effect.
SECTION 608. LIMITATION ON LIENS.
(a) Except as otherwise specified as contemplated by
Section 301 for Securities of any series, so long as any
Securities of any series are Outstanding, the Company will not
pledge, mortgage, hypothecate or grant a security interest in, or
permit any mortgage, pledge, security interest or other lien
upon, any capital stock of any Subsidiary now or hereafter owned
by the Company, to secure any Indebtedness (hereinafter defined)
without making effective provision whereby the Outstanding
Securities shall (so long as such other Indebtedness shall be so
secured) be equally and ratably secured with any and all such
other Indebtedness and any other indebtedness similarly entitled
to be equally and ratably secured; provided, however, that this
restriction shall not apply to nor prevent the creation or
existence of:
(1) any mortgage, pledge, security interest, lien or
encumbrance upon any such capital stock created at the time of
the acquisition of such capital stock by the Company or within
one year after such time to secure all or a portion of the
purchase price for such capital stock;
(2) any mortgage, pledge, security interest, lien or
encumbrance upon any such capital stock existing thereon at
the time of the acquisition thereof by the Company (whether or
not the obligations secured thereby are assumed by the
Company); or
(3) any extension, renewal of refunding of any mortgage,
pledge, security interest, lien or encumbrance permitted by
Subsection (1) or (2) above on capital stock of any Subsidiary
theretofore subject thereto (or substantially the same capital
stock) or any portion thereof.
(4) any judgment, levy, execution, attachment or other
similar lien arising in connection with court proceedings,
provided that either
(i) the execution or enforcement of each such lien
is effectively stayed within 30 days after entry of the
corresponding judgment (or the corresponding judgment has
been discharged within such 30 day period) and the claims
secured thereby are being contested in good faith by
appropriate proceedings timely commenced and diligently
prosecuted;
(ii) the payment of each such lien is covered in
full by insurance and the insurance company has not
denied or contested coverage thereof; or
(iii) so long as each such lien is adequately
bonded, any appropriate legal proceedings that may have
been duly initiated for the review of the corresponding
judgment, decree or order shall not have been fully
terminated or the period within which such proceedings
may be initiated shall not have expired.
For purposes of this Section 608, "Indebtedness" means
all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by the
Company for the repayment of money borrowed. All indebtedness
for money borrowed secured by a lien upon property owned by the
Company and upon which indebtedness for money borrowed the
Company customarily pays interest, although the Company has not
assumed or become liable for the payment of such indebtedness for
money borrowed, shall for purposes of this Section 608 be deemed
to be Indebtedness of the Company. All indebtedness of others
for money borrowed which is guaranteed as to payment of principal
by the Company or in effect guaranteed by the Company through a
contingent agreement to purchase such indebtedness for money
borrowed shall for purposes of this Section 608 be deemed to be
Indebtedness of the Company, but no other contingent obligation
of the Company in respect of indebtedness for money borrowed or
other obligations incurred by others shall for purposes of this
Section 608 be deemed to be Indebtedness of the Company.
In case the Company or any Subsidiary shall propose to
pledge, mortgage, hypothecate or grant a security interest in any
capital stock of any Subsidiary owned by the Company to secure
any Indebtedness, other than as permitted by Subsections (a)(1)
to (a)(3), inclusive, of this Section, the Company will prior
thereto give written notice thereof to the Trustee, and the
Company will prior to or simultaneously with such pledge,
mortgage, hypothecation or grant of security interest, by
supplemental indenture executed to the Trustee (or to the extent
legally necessary to another trustee or an additional or separate
trustee), in form satisfactory to the Trustee, effectively secure
(for so long as such other Indebtedness shall be so secured) all
the Securities equally and ratably with such Indebtedness and
with any other indebtedness for money borrowed similarly entitled
to be equally and ratably secured.
(b) Except as otherwise specified as contemplated by
Section 301 for Securities of any series, the provisions of
Subsection (a) of this Section 608 shall not apply in the event
that the Company or any Subsidiary shall pledge, mortgage,
hypothecate or grant a security interest in or other lien upon
any capital stock of any Subsidiary now or hereafter owned by the
Company to secure any Indebtedness which would otherwise be
subject to the foregoing restriction up to an aggregate amount
which, together with all other Indebtedness (other than
mortgages, pledges, security interests, liens or encumbrances
permitted by Subsection (a) of this Section 608) which would
otherwise be subject to the foregoing restriction, does not at
the time exceed 5% of Consolidated Capitalization.
For purposes of this Section 608:
(1) The term "Consolidated Capitalization" means the sum
obtained by adding (i) Consolidated Shareholders' Equity, (ii)
Consolidated Indebtedness for money borrowed (exclusive of any
thereof which is due and payable within one year of the date
such sum is determined) and, without duplication, (iii) any
preference or preferred stock of the Company or any
Consolidated Subsidiary which is subject to mandatory
redemption or sinking fund provisions.
(2) The term "Consolidated Shareholders' Equity" means
the total Assets of the Company and its Consolidated
Subsidiaries less all liabilities of the Company and its
Consolidated Subsidiaries. As used in this definition,
"liabilities" means all obligations which would, in accordance
with generally accepted accounting principles, be classified
on a balance sheet as liabilities, including without
limitation, (i) indebtedness secured by property of the
Company or any of its Consolidated Subsidiaries whether or not
the Company or such Consolidated Subsidiary is liable for the
payment thereof unless, in the case that the Company or such
Consolidated Subsidiary is not so liable, such property has
not been included among the Assets of the Company or such
Consolidated Subsidiary on such balance sheet, (ii) deferred
liabilities, (iii) indebtedness of the Company or any of its
Consolidated Subsidiaries that is expressly subordinated in
right and priority of payment to other liabilities of the
Company or such Consolidated Subsidiary. As used in this
definition, "liabilities" includes preference or preferred
stock of the Company or any Consolidated Subsidiary only to
the extent of any such preference or preferred stock that is
subject to mandatory redemption or sinking fund provisions.
(3) The term "Consolidated Subsidiary" means at any date
any Subsidiary the financial statements of which under
generally accepted accounting principles would be consolidated
with those of the Company in its consolidated financial
statements as of such date.
(4) The "Assets" of any Person means the whole or any
part of its business, property, assets, cash and receivables.
(5) The term "Consolidated Indebtedness" means total
indebtedness as shown on the consolidated balance sheet of the
Company and its Consolidated Subsidiaries.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES.
Any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for
all purposes of this Indenture, and the entire indebtedness of
the Company in respect thereof shall be deemed to have been
satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the
Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity
of such Securities or portions thereof, Eligible Obligations,
which shall not contain provisions permitting the redemption
or other prepayment thereof at the option of the issuer
thereof, the principal of and the interest on which when due,
without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with
or held by the Trustee or such Paying Agent, shall be
sufficient, or
(c) a combination of (a) or (b) which shall be
sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof on or prior to Maturity; provided, however, that
in the case of the provision for payment or redemption of less
than all the Securities of any series or Tranche, such Securities
or portions thereof shall have been selected by the Trustee as
provided herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have been
given or irrevocable authority shall have been given by the
Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the
Company shall have delivered to the Trustee and such Paying
Agent:
(x) if such deposit shall have been made prior to
the Maturity of such Securities, a Company Order stating
that the money and Eligible Obligations deposited in
accordance with this Section shall be held in trust, as
provided in Section 703; and
(y) if Eligible Obligations shall have been
deposited, an Opinion of Counsel that the obligations so
deposited constitute Eligible Obligations and do not
contain provisions permitting the redemption or other
prepayment at the option of the issuer thereof, and an
opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the
effect that the requirements set forth in clause (b)
above have been satisfied; and
(z) if such deposit shall have been made prior to
the Maturity of such Securities, an Officer's Certificate
stating the Company's intention that, upon delivery of
such Officer's Certificate, its indebtedness in respect
of such Securities or portions thereof will have been
satisfied and discharged as contemplated in this Section.
Upon the deposit of money or Eligible Obligations, or
both, in accordance with this Section, together with the
documents required by clauses (x), (y) and (z) above, the Trustee
shall, upon receipt of a Company Request, acknowledge in writing
that the Security or Securities or portions thereof with respect
to which such deposit was made are deemed to have been paid for
all purposes of this Indenture and that the entire indebtedness
of the Company in respect thereof has been satisfied and
discharged as contemplated in this Section. In the event that
all of the conditions set forth in the preceding paragraph shall
have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate
specified in clause (z) shall not have been delivered, such
Securities or portions thereof shall nevertheless be deemed to
have been paid for all purposes of this Indenture, and the
Holders of such Securities or portions thereof shall nevertheless
be no longer entitled to the benefits of this Indenture or of any
of the covenants of the Company under Article Six (except the
covenants contained in Sections 602 and 603) or any other
covenants made in respect of such Securities or portions thereof
as contemplated by Section 301, but the indebtedness of the
Company in respect of such Securities or portions thereof shall
not be deemed to have been satisfied and discharged prior to
Maturity for any other purpose, and the Holders of such
Securities or portions thereof shall continue to be entitled to
look to the Company for payment of the indebtedness represented
thereby; and, upon Company Request, the Trustee shall acknowledge
in writing that such Securities or portions thereof are deemed to
have been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all of the
Securities of any series, or any Tranche thereof, is to be
provided for in the manner and with the effect provided in this
Section, the Security Registrar shall select such Securities, or
portions of principal amount thereof, in the manner specified by
Section 403 for selection for redemption of less than all the
Securities of a series or Tranche.
In the event that Securities which shall be deemed to
have been paid for purposes of this Indenture, and, if such is
the case, in respect of which the Company's indebtedness shall
have been satisfied and discharged, all as provided in this
Section do not mature and are not to be redeemed within the 60
day period commencing with the date of the deposit of moneys or
Eligible Obligations, as aforesaid, the Company shall, as
promptly as practicable, give a notice, in the same manner as a
notice of redemption with respect to such Securities, to the
Holders of such Securities to the effect that such deposit has
been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to
have been paid for purposes of this Indenture, as aforesaid, the
obligations of the Company and the Trustee in respect of such
Securities under Sections 304, 305, 306, 404, 503 (as to notice
of redemption), 602, 603, 907 and 915 and this Article Seven
shall survive.
The Company shall pay, and shall indemnify the Trustee or
any Paying Agent with which Eligible Obligations shall have been
deposited as provided in this Section against, any tax, fee or
other charge imposed on or assessed against such Eligible
Obligations or the principal or interest received in respect of
such Eligible Obligations, including, but not limited to, any
such tax payable by any entity deemed, for tax purposes, to have
been created as a result of such deposit.
Anything herein to the contrary notwithstanding, (a) if,
at any time after a Security would be deemed to have been paid
for purposes of this Indenture, and, if such is the case, the
Company's indebtedness in respect thereof would be deemed to have
been satisfied or discharged, pursuant to this Section (without
regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the
money or Eligible Obligations, or combination thereof, deposited
with it as aforesaid to the Company or its representative under
any applicable Federal or State bankruptcy, insolvency or other
similar law, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction and
discharge of the Company's indebtedness in respect thereof shall
retroactively be deemed not to have been effected, and such
Security shall be deemed to remain Outstanding and (b) any
satisfaction and discharge of the Company's indebtedness in
respect of any Security shall be subject to the provisions of the
last paragraph of Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of
further effect (except as hereinafter expressly provided), and
the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
provided, however, that if, in accordance with the last paragraph
of Section 701, any Security, previously deemed to have been paid
for purposes of this Indenture, shall be deemed retroactively not
to have been so paid, this Indenture shall thereupon be deemed
retroactively not to have been satisfied and discharged, as
aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee
shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company and the
Trustee under Sections 304, 305, 306, 404, 503 (as to notice of
redemption), 602, 603, 907 and 915 and this Article Seven shall
survive.
Upon satisfaction and discharge of this Indenture as
provided in this Section, the Trustee shall assign, transfer and
turn over to the Company, subject to the lien provided by Section
907, any and all money, securities and other property then held
by the Trustee for the benefit of the Holders of the Securities
other than money and Eligible Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited
pursuant to Section 701, nor the principal or interest payments
on any such Eligible Obligations, shall be withdrawn or used for
any purpose other than, and shall be held in trust for, the
payment of the principal of and premium, if any, and interest, if
any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to
the provisions of Section 603; provided, however, that, so long
as there shall not have occurred and be continuing an Event of
Default, any cash received from such principal or interest
payments on such Eligible Obligations, if not then needed for
such purpose, shall, to the extent practicable and upon Company
Request, be invested in Eligible Obligations of the type
described in clause (b) in the first paragraph of Section 701
maturing at such times and in such amounts as shall be
sufficient, together with any other moneys and the principal of
and interest on any other Eligible Obligations then held by the
Trustee, to pay when due the principal of and premium, if any,
and interest, if any, due and to become due on such Securities or
portions thereof on and prior to the Maturity thereof, and
interest earned from such reinvestment shall be paid over to the
Company as received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section 907; and
provided, further, that, so long as there shall not have occurred
and be continuing an Event of Default, any moneys held in
accordance with this Section on the Maturity of all such
Securities in excess of the amount required to pay the principal
of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of
any trust, lien or pledge under this Indenture except the lien
provided by Section 907; and provided, further, that if an Event
of Default shall have occurred and be continuing, moneys to be
paid over to the Company pursuant to this Section shall be held
until such Event of Default shall have been waived or cured.
ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security of
such series within 30 days after the same becomes due and
payable; or
(b) failure to pay the principal of or premium, if any,
on any Security of such series at its Maturity; or
(c) failure to perform or breach of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance of which or
breach of which is elsewhere in this Section specifically
dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days
after there has been given, by registered or certified mail,
to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 33% in principal amount of
the Outstanding Securities of such series, a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder, unless the Trustee, or the Trustee and the Holders
of a principal amount of Securities of such series not less
than the principal amount of Securities the Holders of which
gave such notice, as the case may be, shall agree in writing
to an extension of such period prior to its expiration;
provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Securities of such series,
as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by
the Company within such period and is being diligently
pursued; or
(d) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition by one or more Persons other than
the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official for the Company or for any substantial part
of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order for relief or any
such other decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case
or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in a case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of
any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally
as they become due, or the authorization of such action by the
Board of Directors; or
(f) any other Event of Default specified with respect to
Securities of such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of
principal of, or interest on, any series of Securities or due to
the default in the performance or breach of any other covenant or
warranty of the Company applicable to the Securities of such
series but not applicable to all Outstanding Securities shall
have occurred and be continuing, either the Trustee or the
Holders of not less than 33% in principal amount of the
Securities of such series may then declare the principal amount
(or, if any of the Securities of such series are Discount
Securities, such portion of the principal amount as may be
specified in the terms thereof as contemplated by Section 301) of
all Securities of such series and interest accrued thereon to be
due and payable immediately. If an Event of Default due to
default in the performance of any other of the covenants or
agreements herein applicable to all Outstanding Securities or an
Event of Default specified in Section 801(d) or (e) shall have
occurred and be continuing, either the Trustee or the Holders of
not less than 33% in principal amount of all Securities then
Outstanding (considered as one class), and not the Holders of the
Securities of any one of such series, may declare the principal
of all Securities and interest accrued thereon to be due and
payable immediately. As a consequence of each such declaration
(herein referred to as a declaration of acceleration) with
respect to Securities of any series, the principal amount (or
portion thereof in the case of Discount Securities) of such
Securities and interest accrued thereon shall become due and
payable immediately.
At any time after such a declaration of acceleration with
respect to Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall
have been obtained by the Trustee as hereinafter in this Article
provided, the Event or Events of Default giving rise to such
declaration of acceleration shall, without further act, be deemed
to have been waived, and such declaration and its consequences
shall, without further act, be deemed to have been rescinded and
annulled, if
(a) the Company shall have paid or deposited with the
Trustee a sum sufficient to pay
(1) all overdue interest on all Securities of such
series;
(2) the principal of and premium, if any, on any
Securities of such series which have become due otherwise
than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Securities;
(3) to the extent that payment of such interest is
lawful, interest upon overdue interest, if any, at the
rate or rates prescribed therefor in such Securities;
(4) all amounts due to the Trustee under Section
907;
and
(b) any other Event or Events of Default with respect to
Securities of such series, other than the nonpayment of the
principal of Securities of such series which shall have become
due solely by such declaration of acceleration, shall have
been cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default
or impair any right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of
Section 801 shall have occurred and be continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of the Securities of the series with respect to which
such Event of Default shall have occurred, the whole amount then
due and payable on such Securities for principal and premium, if
any, and interest, if any, and, to the extent permitted by law,
interest on any overdue principal and interest, at the rate or
rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover any
amounts due to the Trustee under Section 907.
If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of
an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any
series shall have occurred and be continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal, premium, if any, and interest, if any, owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for
amounts due to the Trustee under Section 907) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or premium, if any, or
interest, if any, upon presentation of the Securities in respect
of which or for the benefit of which such money shall have been
collected and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 907;
SECOND: To the payment of the amounts then due and
unpaid upon the Securities for principal of and premium, if
any, and interest, if any, in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal,
premium, if any, and interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(a) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with
respect to the Securities of such series;
(b) the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series in respect
of which an Event of Default shall have occurred and be
continuing, considered as one class, shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period
by the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series in respect of which
an Event of Default shall have occurred and be continuing,
considered as one class;
it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders or
to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal
of and premium, if any, and (subject to Section 307) interest, if
any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the
consent of such Holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the
Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee
and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and
remedies of the Trustee and such Holder shall continue as though
no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 811. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be
continuing in respect of a series of Securities, the Holders of a
majority in principal amount of the Outstanding Securities of
such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities,
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all such series, considered as one
class, shall have the right to make such direction, and not the
Holders of the Securities of any one of such series; and
provided, further, that such direction shall not be in conflict
with any rule of law or with this Indenture. The Trustee may
take any other action, deemed proper by the Trustee, which is not
inconsistent with any such direction. Before proceeding to
exercise any right or power hereunder at the direction of such
Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its
consequences, except a default
(a) in the payment of the principal of or premium, if
any, or interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which
under Section 1202 cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such
series affected.
Upon any such waiver, such default shall cease to exist,
and any and all Events of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including
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; but the
provisions of this Section shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the
Outstanding Securities of all series in respect of which such
suit may be brought, considered as one class, or to any suit
instituted by any Holder for the enforcement of the payment of
the principal of or premium, if any, or interest, if any, on any
Security on or after the Stated Maturity or Maturities expressed
in such Security (or, in the case of redemption, on or after the
Redemption Date).
SECTION 815. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the
duties and responsibilities specified with respect to an
indenture trustee in the Trust Indenture Act and no implied
covenants or obligations shall be read into this Indenture
against the Trustee. For purposes of Sections 315(a) and
315(c) of the Trust Indenture Act, the term "default" is
hereby defined as an Event of Default which has occurred and
is continuing.
(b) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Notwithstanding anything contained in this Indenture
to the contrary, the duties and responsibilities of the
Trustee under this Indenture shall be subject to the
protections, exculpations and limitations on liability
afforded to the Trustee under the provisions of the Trust
Indenture Act.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder
with respect to the Securities of any series to the Holders of
Securities of such series in the manner and to the extent
required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 801(c),
no such notice to Holders shall be given until at least 45 days
after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or
lapse of time, or both, would become, an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the
applicable provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order, or as otherwise expressly provided herein, and
any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at
the request or direction of any Holder pursuant to this
Indenture, unless such Holder shall have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall (subject to
applicable legal requirements) be entitled to examine, during
normal business hours, the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys, and the Trustee shall not
be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
and
(h) the Trustee shall not be charged with knowledge of
any default or Event of Default, as the case may be, with
respect to the Securities of any series for which it is acting
as Trustee unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the default or Event of
Default, as the case may be, or (2) written notice of such
default or Event of Default, as the case may be, shall have
been given to the Trustee by the Company, any other obligor on
such Securities or by any Holder of such Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities
(except the Trustee's certificates of authentication) shall be
taken as the statements of the Company, and neither the Trustee
nor any Authenticating Agent assumes responsibility for their
correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company,
in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it would
have if it were not the Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit of, the
Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein,
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except
to the extent that any such expense, disbursement or advance
may be attributable to the Trustee's negligence, wilful
misconduct or bad faith; and
(c) indemnify the Trustee for, and hold it harmless from
and against, any loss, liability or expense reasonably
incurred by it arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder
or the performance of its duties hereunder, including the
reasonable costs and expenses of defending itself against any
claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except
to the extent any such loss, liability or expense may be
attributable to its negligence, wilful misconduct or bad
faith.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior
to the Securities upon all property and funds held or collected
by the Trustee as such other than property and funds held in
trust under Section 703 (except as otherwise provided in Section
703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided, however, that the negligence,
wilful misconduct or bad faith of any Trustee hereunder shall not
affect the rights of any other Trustee hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 801(d)
or Section 801(e), the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration
under any applicable Federal or State bankruptcy, insolvency or
other similar law.
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture Act, it shall
either eliminate such conflicting interest or resign to the
extent, in the manner and with the effect, and subject to the
conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee,
in its capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting interest
arising from its capacity as trustee in respect of the Securities
of any other series.
SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which
shall be
(a) a corporation organized and doing business under the
laws of the United States, any State or Territory thereof or
the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by
rule, regulation or order upon application, a corporation or
other Person organized and doing business under the laws of a
foreign government, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus
of at least $50,000,000 or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable
requirements of Section 911.
(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 911 shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of
such series delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
908 after written request therefor by the Company or by
any Holder who has been a bona fide Holder for at least
six months, or
(2) the Trustee shall cease to be eligible under
Section 909 and shall fail to resign after written
request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver
of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution
may remove the Trustee with respect to all Securities or
(y) subject to Section 814, any Holder who has been a bona
fide Holder for at least six months may, on behalf of himself
and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office
of Trustee for any cause (other than as contemplated in clause
(y) in Subsection (d) of this Section), with respect to the
Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of
Section 911. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the
applicable requirements of Section 911, become the successor
Trustee with respect to the Securities of such series and to
that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner
required by Section 911, any Holder who has been a bona fide
Holder of a Security of such series for at least six months
may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the
Securities of such series.
(f) So long as no event which is, or after notice or
lapse of time, or both, would become, an Event of Default
shall have occurred and be continuing, and except with respect
to a Trustee appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities pursuant to
Subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a
successor Trustee, effective as of a date specified therein,
and (ii) an instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee in
accordance with Section 911, the Trustee shall be deemed to
have resigned as contemplated in Subsection (b) of this
Section, the successor Trustee shall be deemed to have been
appointed by the Company pursuant to Subsection (e) of this
Section and such appointment shall be deemed to have been
accepted as contemplated in Section 911, all as of such date,
and all other provisions of this Section and Section 911 shall
be applicable to such resignation, appointment and acceptance
except to the extent inconsistent with this Subsection (f).
(g) The Company (or, should the Company fail so to act
promptly, the successor trustee at the expense of the Company)
shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the
Securities of any series by mailing written notice of such
event by first-class mail, postage prepaid, to all Holders of
Securities of such series as their names and addresses appear
in the Security Register. Each notice shall include the name
of the successor Trustee with respect to the Securities of
such series and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of all series, every
such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of all sums owed to it, execute
and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each
successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall
accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder
by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee, upon payment of all
sums owed to it, shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any instruments which fully vest in and
confirm to such successor Trustee all such rights, powers and
trusts referred to in Subsection (a) or (b) of this Section,
as the case may be.
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the
Company or any other obligor upon the Securities (other than by
reason of a relationship described in Section 311(b) of the Trust
Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purpose
of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the
legal requirements of any applicable jurisdiction, the Company
and the Trustee shall have power to appoint, and, upon the
written request of the Trustee or of the Holders of at least 33%
in principal amount of the Securities then Outstanding, the
Company shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, in either case with such
powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons, in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Company
does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default
shall have occurred and be continuing, the Trustee alone shall
have power to make such appointment.
Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so
appointed to more fully confirm to such co-trustee or separate
trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and
delivered by the Company.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject
to the following conditions:
(a) the Securities shall be authenticated and delivered,
and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with,
the Trustee hereunder, shall be exercised solely, by the
Trustee;
(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed either by the Trustee
or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act
is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Company, may
accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, if an Event of
Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of
the Company. Upon the written request of the Trustee, the
Company shall join with the Trustee in the execution and
delivery of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents
with respect to the Securities of one or more series, or Tranche
thereof, which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series or Tranche
issued upon original issuance and upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States,
any State or territory thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having
a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of
this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part
of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The
Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under
this Section, and the Trustee shall be entitled to be reimbursed
for such payments, in accordance with, and subject to the
provisions of, Section 907.
The provisions of Sections 308, 904 and 905 shall be
applicable to each Authenticating Agent.
If an appointment with respect to the Securities of one
or more series shall be made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate
certificate of authentication substantially in the following
form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated: ________________________
As Trustee
By______________________
As Authenticating
Agent
By______________________
Authorized Signatory
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not have
an office capable of authenticating Securities upon original
issuance located in a Place of Payment where the Company wishes
to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing
(which writing need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel), shall appoint, in
accordance with this Section and in accordance with such
procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of
Securities.
ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than June 1 and December 1 in
each year, commencing December 1, 1997, and at such other times
as the Trustee may request in writing, the Company shall furnish
or cause to be furnished to the Trustee information as to the
names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it
in any other capacity and afford to the Holders access to
information so preserved by it, all to such extent, if any, and
in such manner as shall be required by the Trust Indenture Act;
provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE AND COMPANY.
Not later than November 1 in each year, commencing
November 1, 1997, the Trustee shall transmit to the Holders, the
Commission and each securities exchange upon which any Securities
are listed, a report, dated as of the next preceding September
15, with respect to any events and other matters described in
Section 313(a) of the Trust Indenture Act, in such manner and to
the extent required by the Trust Indenture Act. The Trustee
shall transmit to the Holders, the Commission and each securities
exchange upon which any Securities are listed, and the Company
shall file with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the Trust
Indenture Act must be filed with the Commission and furnished to
the Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such
manner, as shall be required by the Trust Indenture Act. The
Company shall notify the Trustee of the listing of any Securities
on any securities exchange.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Company shall not consolidate with or merge into any
other corporation, or convey or otherwise transfer or lease its
properties and assets substantially as an entirety to any Person,
unless
(a) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
Person organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia,
and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of
the principal of and premium, if any, and interest, if any, on
all Outstanding Securities and the performance of every
covenant of this Indenture on the part of the Company to be
performed or observed;
(b) immediately after giving effect to such transaction
no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, conveyance, or other transfer
or lease and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for
relating to such transactions have been complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by
the Company into any other corporation or any conveyance, or
other transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section
1101, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this
Indenture and the Securities Outstanding hereunder.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities, all as
provided in Article Eleven; or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit
of the Holders of, or to remain in effect only so long as
there shall be Outstanding, Securities of one or more
specified series, or one or more specified Tranches thereof,
or to surrender any right or power herein conferred upon the
Company; or
(c) to add any additional Events of Default with respect
to all or any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this
Indenture or to add any new provision to this Indenture;
provided, however, that if such change, elimination or
addition shall adversely affect the interests of the Holders
of Securities of any series or Tranche Outstanding on the date
of such indenture supplemental hereto in any material respect,
such change, elimination or addition shall become effective
with respect to such series or Tranche only pursuant to the
provisions of Section 1202 hereof or when no Security of such
series or Tranche remains Outstanding; or
(e) to provide collateral security for all but not part
of the Securities; or
(f) to establish the form or terms of Securities of any
series or Tranche as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto
representing interest, if any, thereon and for the procedures
for the registration, exchange and replacement thereof and for
the giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(h) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee or
co-trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 911(b); or
(i) to provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all, or any series or Tranche of, the
Securities; or
(j) to change any place or places where (1) the
principal of and premium, if any, and interest, if any, on all
or any series of Securities, or any Tranche thereof, shall be
payable, (2) all or any series of Securities, or any Tranche
thereof, may be surrendered for registration of transfer, (3)
all or any series of Securities, or any Tranche thereof, may
be surrendered for exchange and (4) notices and demands to or
upon the Company in respect of all or any series of
Securities, or any Tranche thereof, and this Indenture may be
served; or
(k) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with
any other provision herein, or to make any other changes to
the provisions hereof or to add other provisions with respect
to matters or questions arising under this Indenture, provided
that such other changes or additions shall not adversely
affect the interests of the Holders of Securities of any
series or Tranche in any material respect.
Without limiting the generality of the foregoing, if the
Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be
amended and
(x) if any such amendment shall require one or more
changes to any provisions hereof or the inclusion herein
of any additional provisions, or shall by operation of
law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, this Indenture
shall be deemed to have been amended so as to conform to
such amendment to the Trust Indenture Act, and the
Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental hereto to
effect or evidence such changes or additional provisions;
or
(y) if any such amendment shall permit one or more
changes to, or the elimination of, any provisions hereof
which, at the date of the execution and delivery hereof
or at any time thereafter, are required by the Trust
Indenture Act to be contained herein, this Indenture
shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee
may, without the consent of any Holders, enter into an
indenture supplemental hereto to evidence such amendment
hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of a majority in
aggregate principal amount of the Securities of all series then
Outstanding under this Indenture, considered as one class, by Act
of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or
modifying in any manner the rights of the Holders of Securities
of such series under the Indenture; provided, however, that if
there shall be Securities of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more,
but less than all, of such series, then the consent only of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected,
considered as one class, shall be required; and provided,
further, that if the Securities of any series shall have been
issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so
directly affected, considered as one class, shall be required;
and provided, further, that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security,
or reduce the principal amount thereof or the rate of interest
thereon (or the amount of any installment of interest thereon)
or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or reduce the
amount of the principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 802, or change the coin
or currency (or other property), in which any Security or any
premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity of any Security (or,
in the case of redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder of such
Security, or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, or any Tranche thereof,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with any provision of
this Indenture or of any default hereunder and its
consequences, or reduce the requirements of Section 1304 for
quorum or voting, without, in any such case, the consent of
the Holders of each Outstanding Security of such series or
Tranche, or
(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of
any series, or any Tranche thereof, except to increase the
percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 911(b), 914 and
1201(h).
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series
of Securities, or one or more Tranches thereof, or which modifies
the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof. A waiver by a Holder of
such Holder's right to consent under this Section shall be deemed
to be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section
901) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may,
but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by
this Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such restatement
shall supersede this Indenture as theretofore in effect for all
purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES.
Securities of any series, or any Tranche thereof,
authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform, in
the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series or Tranche.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall
have been established in a Board Resolution or an Officer's
Certificate as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or the
elimination of any of such terms may be effected by means of a
supplemental Board Resolution or Officer's Certificate, as the
case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or
Officer's Certificate shall not be accepted by the Trustee or
otherwise be effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such
additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied.
Upon the acceptance thereof by the Trustee, any such supplemental
Board Resolution or Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or
all, series, or any Tranche or Tranches thereof, may be called at
any time and from time to time pursuant to this Article to make,
give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be made, given or taken by Holders of Securities of
such series or Tranches.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of
Holders of Securities of one or more, or all, series, or any
Tranche or Tranches thereof, for any purpose specified in
Section 1301, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, as the Trustee
shall determine, or, with the approval of the Company, at any
other place. Notice of every such meeting, setting forth the
time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a
meeting of the Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, by the Company or
by the Holders of 33% in aggregate principal amount of all of
such series and Tranches, considered as one class, for any
purpose specified in Section 1301, by written request setting
forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have given the notice
of such meeting within 21 days after receipt of such request
or shall not thereafter proceed to cause the meeting to be
held as provided herein, then the Company or the Holders of
Securities of such series and Tranches in the amount above
specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved by the
Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in Subsection
(a) of this Section.
(c) Any meeting of Holders of Securities of one or more,
or all, series, or any Tranche or Tranches thereof, shall be
valid without notice if the Holders of all Outstanding
Securities of such series or Tranches are present in person or
by proxy and if representatives of the Company and the Trustee
are present, or if notice is waived in writing before or after
the meeting by the Holders of all Outstanding Securities of
such series, or any Tranche or Tranches thereof, or by such of
them as are not present at the meeting in person or by proxy,
and by the Company and the Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of
Securities of one or more, or all, series, or any Tranche or
Tranches thereof, a Person shall be (a) a Holder of one or more
Outstanding Securities of such series or Tranches, or (b) a
Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such
series or Tranches by such Holder or Holders. The only Persons
who shall be entitled to attend any meeting of Holders of
Securities of any series or Tranche shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of
the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which a meeting shall have been called
as hereinbefore provided, considered as one class, shall
constitute a quorum for a meeting of Holders of Securities of
such series and Tranches; provided, however, that if any action
is to be taken at such meeting which this Indenture expressly
provides may be taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of the
Outstanding Securities of such series and Tranches, considered as
one class, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Securities of such series
and Tranches, considered as one class, shall constitute a quorum.
In the absence of a quorum within one hour of the time appointed
for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series and Tranches, be
dissolved. In any other case the meeting may be adjourned for
such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1305(e), notice
of the reconvening of any meeting adjourned for more than 30 days
shall be given as provided in Section 1302(a) not less than 10
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series and
Tranches which shall constitute a quorum.
Except as limited by Section 1202, any resolution
presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted only by the
affirmative vote of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which such meeting shall have been
called, considered as one class; provided, however, that, except
as so limited, any resolution with respect to any action which
this Indenture expressly provides may be taken by the Holders of
a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, may be adopted at a meeting
or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding
Securities of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any meeting of
Holders of Securities duly held in accordance with this Section
shall be binding on all the Holders of Securities of the series
and Tranches with respect to which such meeting shall have been
held, whether or not present or represented at the meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may
be in person or by proxy; and, to the extent permitted by law,
any such proxy shall remain in effect and be binding upon any
future Holder of the Securities with respect to which it was
given unless and until specifically revoked by the Holder or
future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as
it may deem advisable for any meeting of Holders of Securities
in regard to proof of the holding of such Securities and of
the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct
of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the
holding of Securities shall be proved in the manner specified
in Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104. Such
regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 104 or other
proof.
(c) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the
meeting shall have been called by the Company or by Holders as
provided in Section 1302(b), in which case the Company or the
Holders of Securities of the series and Tranches calling the
meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be
entitled to one vote for each $1 principal amount of
Securities held or represented by him; provided, however, that
no vote shall be cast or counted at any meeting in respect of
any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman
of the meeting shall have no right to vote, except as a Holder
of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1302 at
which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class;
and the meeting may be held as so adjourned without further
notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed
the signatures of the Holders or of their representatives by
proxy and the principal amounts and serial numbers of the
Outstanding Securities, of the series and Tranches with respect
to which the meeting shall have been called, held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports of
all votes cast at the meeting. A record of the proceedings of
each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302
and, if applicable, Section 1304. Each copy shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization,
direction, notice, consent, waiver or other action may be made,
given or taken by Holders by written instruments as provided in
Section 104.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal
of or premium, if any, or interest, if any, on any Securities, or
any part thereof, or for any claim based thereon or otherwise in
respect thereof, or of the indebtedness represented thereby, or
upon any obligation, covenant or agreement under this Indenture,
against any incorporator, shareholder, officer or director, as
such, past, present or future of the Company or of any
predecessor or successor corporation (either directly or through
the Company or a predecessor or successor corporation), whether
by virtue of any constitutional provision, statute or rule of
law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this
Indenture and all the Securities are solely corporate
obligations, and that no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, shareholder,
officer or director, past, present or future, of the Company or
of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor
corporation, because of the indebtedness hereby authorized or
under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the
Securities or to be implied herefrom or therefrom, and that any
such personal liability is hereby expressly waived and released
as a condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the Securities.
ARTICLE FIFTEEN
SECURITIES OF THE FIRST SERIES AND SECOND SERIES
SECTION 1501. DESIGNATION OF SECURITIES OF THE FIRST SERIES.
There is hereby created a series of Securities designated
"6.375% Series B Senior Notes due 2004" (herein sometimes
referred to as "Securities of the First Series") and limited in
aggregate principal amount (except as contemplated in Section
201(b) hereof) to One Hundred Seventy-Five Million Dollars
($175,000,000). The form and terms of the Securities of the
First Series shall be established in an Officer's Certificate.
SECTION 1502. DESIGNATION OF SECURITIES OF THE SECOND SERIES.
There is hereby created a series of Securities designated
"6.375% Series B Exchange Senior Notes due 2004" (herein
sometimes referred to as "Securities of the Second Series") and
limited in aggregate principal amount (except as contemplated in
Section 201(b) hereof) to One Hundred Seventy-Five Million
Dollars ($175,000,000). The form and terms of the Securities of
the Second Series shall be established in an Officer's
Certificate.
_________________________
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first
above written.
TEXAS UTILITIES COMPANY
By: /s/ Robert S. Shapard
---------------------------
Treasurer
<PAGE>
THE BANK OF NEW YORK, Trustee
By: /s/ W.N. Gitlin
------------------------------
W.N. GITLIN
Vice President
<PAGE>
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 8th day of October, 1997, before me personally
came Robert S. Shapard, to me known, who, being by me duly sworn,
did depose and say that he is the Treasurer of Texas Utilities
Company, one of the corporations described in and which executed
the foregoing instrument; and that he signed his name thereto by
authority of the Board of Directors of said corporation.
/s/ LeNae B. Davis
----------------------------------------
LeNae B. Davis
Notary Public, State of Texas
My Commission Expires June 23, 2000
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 9th day of October, 1997, before me personally
came W.N. Gitlin, to me known, who, being by me duly sworn, did
depose and say that he is a Vice President of The Bank of New
York, one of the corporations described in and which executed the
foregoing instrument; and that he signed his name thereto by
authority of the Board of Directors of said corporation.
/s/ Moira Feeney
--------------------------------------
Moira Feeney
Notary Public, State of New York
Commission Expires Feb. 18, 1998
REGISTRATION RIGHTS AGREEMENT
Dated October 10, 1997
among
TEXAS UTILITIES COMPANY
and
LEHMAN BROTHERS INC.,
CITICORP SECURITIES, INC.
and
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED,
as Initial Purchasers
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of October 10, 1997 between TEXAS UTILITIES
COMPANY, a Texas corporation (the "Company"), and LEHMAN BROTHERS
INC. ("Lehman Brothers"), CITICORP SECURITIES, INC. and MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED (collectively, the
"Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated October 7, 1997 (the "Purchase Agreement"), among the
Company, as issuer of the 6.20% Series A Senior Notes 2002 (the
"Notes"), and the Initial Purchasers, which provides for, among
other things, the sale by the Company to the Initial Purchasers
of $125,000,000 principal amount of the Notes. In order to
induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide to the Initial
Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing
under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree
as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Additional Interest" shall have the meaning set forth in
-------------------
Section 2(e) hereof.
"Advice" shall have the meaning set forth in the last
------
paragraph of Section 3 hereof.
"Applicable Period" shall have the meaning set forth in
-----------------
Section 3(t) hereof.
"Business Day" shall mean a day other than (i) a Saturday or
------------
a Sunday, (ii) a day on which banks in New York, New York are
authorized or obligated by law or executive order to remain
closed or (iii) a day on which the Trustee's principal corporate
trust office is closed for business.
"Closing Date" shall mean the Closing Date as defined in the
------------
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble
-------
to this Agreement and also includes the Company's successors and
permitted assigns.
"Depositary" shall mean The Depository Trust Company, or any
----------
other depositary appointed by the Trust; provided, however, that
such depositary must have an address in the Borough of Manhattan,
in The City of New York.
"Effectiveness Period" shall have the meaning set forth in
--------------------
Section 2(b) hereof.
"Eligible Holder" shall have the meaning set forth in
---------------
Section 2(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of
------------
1934, as amended from time to time.
"Exchange Offer" shall mean the offer by the Company to the
--------------
Holders to exchange the Registrable Securities for a like
principal amount of Exchange Securities pursuant to Section 2(a)
hereof.
"Exchange Offer Registration" shall mean a registration
---------------------------
under the Securities Act effected pursuant to Section 2(a)
hereof.
"Exchange Offer Registration Statement" shall mean an
-------------------------------------
exchange offer registration statement on Form S-4 (or, if
applicable, on another appropriate form), and all amendments and
supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in
---------------
Section 2(a) hereof.
"Exchange Notes" shall mean the 6.20% Series A Exchange
--------------
Senior Notes due 2002 containing terms identical to the Notes
(except that they will not contain terms with respect to the
transfer restrictions under the Securities Act and will not
provide for any Additional Interest to be payable with respect
thereto).
"Holder" shall mean the Initial Purchasers, for so long as
------
they own any Registrable Securities, and each of their respective
successors, assigns and direct and indirect transferees who
become registered owners of Registrable Securities under the
Indenture.
"Indenture" shall mean the Indenture (for Unsecured Debt
---------
Securities Series A) relating to the Notes and the Exchange Notes
dated as of October 1, 1997 between the Company, as issuer, and
The Bank of New York, as the Trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
------------------
preamble of this Agreement.
"Inspectors" shall have the meaning set forth in Section
----------
3(n) hereof.
"Issue Date" shall mean the date of original issuance of the
----------
Notes.
"Majority Holders" shall mean the Holders of a majority of
----------------
the aggregate principal amount of outstanding Notes.
"Notes" shall have the meaning set forth in the preamble to
-----
this Agreement.
"Participating Broker-Dealer" shall have the meaning set
---------------------------
forth in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation,
------
trust or unincorporated organization, limited liability company,
or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
----------
Registration Statement, including any preliminary prospectus, and
any such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the
terms of the offering of any portion of the Registrable
Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-
effective amendments, and in each case including all material
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
------------------
preamble of this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
-------
hereof.
"Registrable Securities" shall mean the Notes; provided,
----------------------
however, that the Notes shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Notes
shall have been declared effective under the Securities Act and
such Notes shall have been disposed of pursuant to such
Registration Statement, (ii) such Notes shall have been sold to
the public pursuant to Rule 144(k) (or any similar provision then
in force, but not Rule 144A) under the Securities Act, (iii) such
Notes shall have ceased to be outstanding, (iv) such Notes have
been exchanged for Exchange Notes upon consummation of the
Exchange Offer and are thereafter freely tradable by the holder
thereof (other than an affiliate of the Company) or (v) two years
(or such shorter period as may hereafter be provided in Rule
144(k) under the Securities Act (or similar rule) have elapsed
since the date of original issuances of the Notes.
"Registration Expenses" shall mean any and all expenses
---------------------
incident to performance of or compliance by the Company with this
Agreement, including, without limitation: (i) all SEC or
National Association of Securities Dealers, Inc. (the "NASD")
registration and filing fees; (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky
laws (including reasonable fees and disbursements of counsel for
any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Notes or Registrable
Securities) and compliance with the rules of the NASD in an
amount not exceeding $15,000 in the aggregate, (iii) all expenses
of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement,
any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing
any Registration Statement, any Prospectus and any amendments or
supplements thereto, and in preparing or assisting in preparing,
printing and distributing any underwriting agreements, securities
sales agreements and other documents relating to the performance
of and compliance with this Agreement, (iv) all rating agency
fees, (v) the fees and disbursements of counsel for the Company,
of Winthrop, Stimson, Putnam & Roberts, as counsel for the
Holders hereunder in connection with the Exchange Offer, and of
the independent certified public accountants of the Company,
including the expenses of any "cold comfort" letters required by
or incident to such performance and compliance, (vi) the fees and
expenses of the Trustee, and any paying agent, exchange agent or
custodian, (vii) all fees and expenses incurred in connection
with the listing, if any, of any of the Registrable Securities or
the Exchange Notes on any securities exchange or exchanges, and
(viii) the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration
Statement.
"Registration Statement" shall mean any registration
----------------------
statement of the Company which covers any of the Exchange Notes
or Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or
------------------
such shorter period as may hereafter be provided in Rule 144(k)
under the Securities Act (or similar successor rule)) commencing
on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933, as
--------------
amended from time to time.
"Shelf Registration" shall mean a registration effected
------------------
pursuant to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth
------------------------
in Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set
-----------------------------
forth in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
----------------------------
registration statement of the Company pursuant to the provisions
of Section 2(b) hereof which covers all of the Registrable
Securities, on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the
SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"TIA" shall mean the Trust Indenture Act of 1939, as amended
---
from time to time.
"Trustee" shall mean The Bank of New York, and any successor
-------
thereto, as trustee under the Indenture.
2. Registration Under the Securities Act.
-------------------------------------
(a) Exchange Offer.
--------------
To the extent not prohibited by any applicable law or
applicable interpretation of the staff of the SEC, the Company
shall, for the benefit of the Holders, at the Company's cost, (i)
cause to be filed with the SEC an Exchange Offer Registration
Statement on an appropriate form under the Securities Act
covering the Exchange Offer, (ii) use its reasonable best efforts
to cause such Exchange Offer Registration Statement to be
declared effective under the Securities Act by the SEC not later
than the date which is 180 days after the Issue Date, and (iii)
use its reasonable best efforts to keep such Exchange Offer
Registration Statement effective for not less than 30 calendar
days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to the Holders. Upon the
effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder electing
to exchange Registrable Securities for a like principal amount of
Exchange Notes (assuming that such Holder is not an affiliate of
the Company within the meaning of Rule 405 under the Securities
Act and is not a broker-dealer tendering Registrable Securities
acquired directly from the Company for its own account, acquires
the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements or understandings with any
Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Securities) (any Holder meeting all
such requirements, hereinafter an "Eligible Holder"), and to
transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act
and under state securities or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and
related documents (together, the "Notice");
(ii) use its reasonable best efforts to keep the
Exchange Offer open for acceptance for a period of not less
than 30 days after the date Notice thereof is mailed to the
Holders (or longer if required by applicable law) (such
period referred to herein as the "Exchange Period");
(iii) utilize the services of the Depositary for the
Exchange Offer;
(iv) permit Holders to withdraw, at any time prior to
the close of business, New York time, on the last Business
Day of the Exchange Period, any Notes tendered for exchange
by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting
forth the name of such Holder, the principal amount of Notes
delivered for exchange, and a statement that such Holder is
withdrawing his election to have such Notes exchanged;
(v) notify each Holder by means of the Notice that any
Note not tendered by such Holder in the Exchange Offer will
remain outstanding and continue to accrue interest, but will
not retain any rights under this Agreement (except in the
case of the Initial Purchasers and Participating Broker-
Dealers as provided herein); and
(vi) otherwise comply in all respects with all
applicable laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange
Offer, the Company shall:
accept for exchange all Notes or portions thereof
tendered and not validly withdrawn pursuant to the Exchange
Offer;
deliver, or cause to be delivered, to the Trustee for
cancellation all Notes or portions thereof so accepted for
exchange by the Company; and
issue, and cause the Trustee to promptly authenticate
and deliver to each Holder, Exchange Notes equal in
principal amount to the principal amount of the Notes
surrendered by such Holder.
Interest on each Exchange Note issued pursuant to the
Registered Exchange Offer will accrue from the last date on which
interest was paid on the Note surrendered in exchange therefor
or, if no interest has been paid on such Note, from the Issue
Date. To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Company shall use its
reasonable best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements
of the Securities Act, the Exchange Act and other applicable laws
in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange
Offer does not violate applicable law or any applicable
interpretation of the staff of the SEC and that each Holder
tendering Notes for exchange shall be an Eligible Holder. Each
Holder of Registrable Securities who wishes to exchange such
Registrable Securities for Exchange Notes in the Exchange Offer
will be required to make certain customary representations in
connection therewith, including representations that (i) it is
not an affiliate of the Company, (ii) the Exchange Notes to be
received by it were acquired in the ordinary course of its
business and (iii) at the time of the Exchange Offer, it has no
arrangement with any person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Notes.
Each Holder hereby acknowledges and agrees that any Participating
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the Exchange Notes: (1) could
not under SEC policy as in effect on the date of this Agreement
rely on the position of the SEC enunciated in Morgan Stanley and
Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the SEC's
letter to Shearman & Sterling dated July 2, 1993, and similar no-
action letters (including any no-action letter obtained based on
the representations in clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with the secondary resale
transaction and that such a secondary resale transaction should
be covered by an effective registration statement containing the
selling security holder information required by Item 507 and 508,
as applicable, of Regulation S-K if the resales are of Exchange
Notes obtained by such Holder in exchange for Notes acquired by
such Holder directly from the Company.
Upon consummation of the Exchange Offer in accordance
with this Section 2(a), the provisions of this Agreement shall
continue to apply, mutatis mutandis, solely with respect to
Registrable Securities that are Exchange Notes held by
Participating Broker-Dealers, and the Company shall have no
further obligation to register the Registrable Securities (other
than pursuant to Section 2(b)(iii)) pursuant to Section 2(b) of
this Agreement.
(b) Shelf Registration.
------------------
In the event that (i) the Company is not permitted to
effect the Exchange Offer because of any change in law or in
currently prevailing interpretations of the staff of the SEC,
(ii) the Exchange Offer Registration Statement is not declared
effective within 180 days of the Issue Date, or (iii) (1) any
Initial Purchaser is not permitted, in the reasonable opinion of
Winthrop, Stimson, Putnam & Roberts, pursuant to applicable law
or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities
that are freely tradeable without restriction under the
Securities Act and applicable blue sky or state securities laws,
(2) such Initial Purchaser requests registration of Registrable
Securities held by such Initial Purchaser and (3) such Initial
Purchaser's request is made no later than the later of (A) the
date of filing of the Exchange Offer Registration Statement and
(B) 120 days following the Issue Date (any of the events
specified in (i) - (iii) being a "Shelf Registration Event" and
the date of occurrence thereof, the "Shelf Registration Event
Date"), the Company shall promptly deliver to the Holders and the
Trustee written notice thereof and, at its cost, file as promptly
as practicable after such Shelf Registration Event Date, and, in
any event, within 45 days after such Shelf Registration Event
Date (which shall be no earlier than 90 days after the Closing
Date) a Shelf Registration Statement providing for the sale by
the holders of all of the Registrable Securities, and shall use
its reasonable best efforts to have such Shelf Registration
Statement declared effective by the SEC as soon as practicable;
provided, however that if the Shelf Registration Event is
pursuant to clause (iii), the Company may register such
Registrable Securities together with the Exchange Offer
Registration Statement, filed pursuant to Section 2(a), and the
requirements as to timing applicable thereto. No Holder of
Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this
Agreement unless and until such Holder agrees in writing to be
bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company in writing, within 15
days after receipt of a request therefor, such information as the
Company may, after conferring with counsel with regard to
information relating to Holders that would be required by the SEC
to be included in such Shelf Registration Statement or Prospectus
included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each
Holder as to which any Shelf Registration is being effected
agrees promptly to furnish to the Company all information with
respect to such Holder necessary to make the information
previously furnished to the Company by such Holder not materially
misleading.
The Company agrees to use its reasonable best efforts to
keep the Shelf Registration Statement continuously effective for
the Rule 144(k) Period (subject to extension pursuant to the last
paragraph of Section 3 hereof) or for such shorter period which
will terminate when all of the securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be Registrable Securities
(the "Effectiveness Period"). The Company shall not permit any
securities other than Registrable Securities to be included in
the Shelf Registration. The Company will, in the event a Shelf
Registration Statement is declared effective, provide to each
Holder a reasonable number of copies of the Prospectus which is a
part of the Shelf Registration Statement and notify each such
Holder when the Shelf Registration has become effective. The
Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or by
the Securities Act or by any other rules and regulations
thereunder for shelf registrations, and the Company agrees to
furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or
filed with the SEC.
(c) Expenses.
--------
The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b)
hereof. Except as provided herein, each Holder shall pay all
expenses of its counsel, underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition
of such Holder's Registrable Securities pursuant to the Shelf
Registration Statement.
(d) Effective Registration Statement.
--------------------------------
An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof (or a combination of the two) will not be
deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has
been declared effective, the offering of Registrable Securities
pursuant to a Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the
SEC or any other governmental agency or court, such Registration
Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable
Securities pursuant to such Registration Statement may legally
resume. The Company will be deemed not to have used its
reasonable best efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may
be, to become, or to remain, effective during the requisite
period if the Company voluntarily takes any action that would
result in any such Registration Statement not being declared
effective or in the Holders of Registrable Securities covered
thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless such action is
required by applicable law.
(e) Additional Interest.
-------------------
In the event that:
(i) notwithstanding that the Company has consummated or
will consummate an Exchange Offer, the Company is required
to file a Shelf Registration Statement and such Shelf
Registration Statement is not filed on or prior to the date
required by Section 2(b) hereof, then commencing on the day
after the applicable required filing date, additional
interest shall accrue on the principal amount of the Notes
("Additional Interest") at a rate of 0.25% per annum; or
(ii) (A) the Exchange Offer Registration Statement is
not declared effective by the SEC on or prior to the 180th
day after the Issue Date or (B) whether or not the Company
has consummated or will consummate an Exchange Offer, the
Company is required to file a Shelf Registration Statement
and such Shelf Registration Statement is not declared
effective by the SEC on or prior to the 30th day after the
date such Shelf Registration Statement was required to be
filed, then, commencing on the 31st day after the applicable
required filing date, Additional Interest shall accrue on
the principal amount of the Notes at a rate of 0.25% per
annum; or
(iii) (A) the Company has not exchanged the Exchange
Notes for the Notes validly tendered, in accordance with the
terms of the Exchange Offer, on or prior to the 40th day
after the date on which the Exchange Offer Registration
Statement was declared effective or (B) the Shelf
Registration Statement has been declared effective and such
Shelf Registration Statement ceases to be effective at any
time prior to the expiration of the Rule 144(k) Period
(other than after such time as all Notes have been disposed
of thereunder or otherwise cease to be Registrable
Securities), then Additional Interest shall accrue on the
principal amount of Notes, at a rate of 0.25% per annum,
commencing on the day such Shelf Registration Statement
ceases to be effective;
provided, however, that the Additional Interest rate on the Notes
may not exceed in the aggregate 0.25% per annum; provided
further, however, that (1) upon the filing of the Shelf
Registration Statement (in the case of clause (i) above), (2)
upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of
clause (ii) above), (3) upon the exchange of Exchange Notes for
all Notes tendered (in the case of clause (iii)(A) above), or
upon the effectiveness of the Shelf Registration Statement which
had ceased to remain effective (in the case of clause (iii) (B)
above), or (4) upon the expiration of two years (or such shorter
period as may hereafter be provided in Rule 144(k) under the
Securities Act (or similar rule)) commencing on the date of
original issuance of the Notes, Additional Interest on the Notes
as a result of such clause (or the relevant subclause thereof),
as the case may be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to Section
2(e)(i), (ii) or (iii) above will be payable in cash on the
relevant payment dates for the payment of interest pursuant to
the Indenture.
(f) Specific Enforcement.
--------------------
Without limiting the remedies available to the Holders,
the Company acknowledges that any failure of the Company to
comply with its obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Holders
for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and
that, in the event of any such failure, any Holder may obtain
such relief as may be required to specifically enforce the
Company's obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
-----------------------
In connection with the obligations of the Company with
respect to the Registration Statements pursuant to Sections 2(a)
and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement
or Registration Statements as prescribed by Sections 2(a) and
2(b) hereof within (in the case of Section 2(b) hereof) the
relevant time period specified and on the appropriate form(s)
under the Securities Act, which form(s) (i) shall be selected by
the Company, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Securities by the
selling Holders thereof and (iii) shall comply as to form in all
material respects with the requirements of the applicable form
and include all financial statements required by the SEC to be
filed therewith; and use its reasonable best efforts to cause
such Registration Statement(s) to become effective and remain
effective in accordance with Section 2 hereof; provided, however,
that if (1) such filing is pursuant to Section 2(b), or (2) a
Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under
the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Notes, before filing any Registration Statement
or Prospectus or any amendments or supplements thereto, the
Company shall furnish to and afford the Holders of the
Registrable Securities and each such Participating Broker-Dealer,
as the case may be, covered by such Registration Statement, their
counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including
copies of any documents to be incorporated by reference therein
and all exhibits thereto) proposed to be filed. The Company
shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders
must be afforded an opportunity to review prior to the filing of
such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-
effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may
be; and cause each Prospectus to be supplemented, if so
determined by the Company or requested by the SEC, by any
required prospectus supplement and as so supplemented to be filed
pursuant to Rule 424 (or any similar provision then in force)
under the Securities Act, and comply with the provisions of the
Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder applicable to it with respect to the
disposition of all securities covered by each Registration
Statement during the Effectiveness Period or the Applicable
Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof
described in this Agreement (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf
Registration Statement, at least three Business Days prior to
filing, that a Shelf Registration Statement with respect to the
Registrable Securities is being filed and advising such Holder
that the distribution of Registrable Securities will be made in
accordance with the method selected by the Majority Holders; (ii)
furnish to each Holder of Registrable Securities included in the
Shelf Registration Statement and to each underwriter of an
underwritten offering of Registrable Securities, if any, without
charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto
and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or
other disposition of the Registrable Securities; (iii) consent to
the use of the Prospectus or any amendment or supplement thereto
by each of the selling Holders of Registrable Securities included
in the Shelf Registration Statement in connection with the
offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto; and (iv)
furnish to each Holder of Registrable Securities either a summary
of the terms of this Agreement or a copy of this Agreement;
(d) in the case of a Shelf Registration, cooperate with the
Trustee to register or qualify the Registrable Securities under
all applicable state securities or "blue sky" laws of such
jurisdictions by the time the applicable Registration Statement
is declared effective by the SEC as any Holder of Registrable
Securities covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Securities
shall reasonably request in writing in advance of such date of
effectiveness; provided, however, that the Company and the Trust
shall not be required to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii)
file any general consent to service of process in any
jurisdiction where it would not otherwise be subject to such
service of process or (iii) file annual reports or comply with
any other requirements deemed by the Company in its reasonable
judgment to be unduly burdensome;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company has received
prior written notice that they will be utilizing the Prospectus
contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof, are seeking to sell Exchange
Notes and are required to deliver Prospectuses, notify each
Holder of Registrable Securities, or such Participating Broker-
Dealers, as the case may be, their counsel and the managing
underwriters, if any, promptly and promptly confirm such notice
in writing (i) when a Registration Statement has become effective
and when any post-effective amendments and supplements thereto
become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional
information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the
effectiveness of a Registration Statement or the qualification of
the Registrable Securities or the Exchange Notes to be offered or
sold by any Participating Broker-Dealer in any jurisdiction
described in paragraph 3(d) hereof or the initiation of any
proceedings for that purpose, (iv) in the case of a Shelf
Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the
Company contained in any purchase agreement, securities sales
agreement or other similar agreement, if any cease to be true and
correct in all material respects, and (v) of the happening of any
event or the failure of any event to occur or the discovery of
any facts or otherwise, during the Effectiveness Period which
makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which causes
such Registration Statement or Prospectus to omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, and (vi) when the Company reasonably determines that
a post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration
Statement at the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of
such Shelf Registration Statement, without charge, at least one
conformed copy of each Registration Statement relating to such
Shelf Registration and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits
thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive
legends and in such denominations (consistent with the provisions
of the Indenture) and registered in such names as the selling
Holders or the underwriters may reasonably request at least two
Business Days prior to the closing of any sale of Registrable
Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange
Offer Registration, upon the occurrence of any circumstance
contemplated by Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi)
hereof, prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
the Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and
to notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event,
and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated
by reference into a Registration Statement or a Prospectus after
the initial filing of a Registration Statement, provide a
reasonable number of copies of such document to the Holders; and
make such of the representatives of the Company as shall be
reasonably requested by the Holders of Registrable Securities or
the Initial Purchasers on behalf of such Holders available for
reasonable discussion of such document;
(k) obtain a CUSIP number for all Exchange Notes, no later
than the effective date of a Registration Statement, and provide
the Trustee with printed certificates for the Exchange Notes or
the Registrable Securities, as the case may be, in a form
eligible for deposit with the Depositary;
(l) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Notes or
Registrable Securities, as the case may be, and effect such
changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute,
and use its reasonable best efforts to cause the Trustee to
execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the
SEC to enable such documents to be so qualified in a timely
manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary
in underwritten offerings and consistent with the terms of the
Purchase Agreement and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities,
and in such connection, whether or not an underwriting agreement
is entered into and whether or not the registration is with
respect to an underwritten offering, if requested by (x) any
Initial Purchaser, in the case where an Initial Purchaser holds
Registrable Securities acquired by it as part of its initial
distribution and (y) other Holders of Notes covered thereby: (i)
make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with
respect to the business of the Company and its subsidiaries as
then conducted and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings, and confirm
the same if and when requested; (ii) obtain opinions of counsel
to the Company and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to
the managing underwriters (if any) and the Holders of a majority
in principal amount of the Registrable Securities being sold,
addressed to each selling Holder and the underwriters (if any)
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such underwriters (it being agreed that
the matters to be covered by such opinions may be subject to
customary qualifications and exceptions); (iii) obtain "cold
comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of
any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement),
addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten
offerings and such other matters as reasonably requested by such
underwriters in accordance with Statement on Auditing Standards
No. 72; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures
no less favorable than those set forth in Section 4 hereof (or
such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section (including, without
limitation, such underwriters and selling Holders). The above
shall be done at each closing under such underwriting agreement,
or as and to the extent required thereunder and as consistent
with the terms of the Purchase Agreement;
(n) if (1) a Shelf Registration is filed pursuant to
Section 2(b) or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, make reasonably available for inspection by
any selling Holder of such Registrable Securities being sold, or
each such Participating Broker-Dealer, as the case may be, any
underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively,
the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and
its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable
due diligence responsibilities, and cause the officers, directors
and employees of the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any
such Inspector in connection with such Registration Statement;
provided, however, that the foregoing inspection and information
gathering shall be coordinated on behalf of all such parties by
Company-designated Holders counsel, at the expense of such
parties as described in Section 2(c) hereof. Records which the
Company determines, in good faith, to be confidential and any
records which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of
such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, provided
that the Company shall be consulted prior to any such disclosure,
(ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or
is necessary in connection with any action, suit or proceeding or
(iii) the information in such Records has been made available to
the public. Each selling Holder of such Registrable Securities
and each such Participating Broker-Dealer will be required to
agree in writing that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the
securities of the Company unless and until such is made generally
available to the public. Each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be
required to further agree in writing that it will, upon learning
that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company at
its expense to undertake appropriate action to prevent disclosure
of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be
applicable and make generally available to its security holders
earning statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act), with such adjustments as
are necessary to reflect the merger transactions in August 1997
involving the Company and the predecessors of the Company, no
later than 60 days after the end of any 12-month period (or 120
days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company after the
effective date of a Registration Statement, which statements
shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer, if requested by
the Trustee, obtain an opinion of counsel to the Company
addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer and
which includes an opinion that (i) the Company has duly
authorized, executed and delivered the Exchange Notes, and (ii)
each of the Exchange Notes constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms (with customary exceptions);
(q) if an Exchange Offer is to be consummated, upon
delivery of the Registrable Securities by Holders to the Company
(or to such other Person as directed by the Company), in exchange
for the Exchange Notes, the Company shall mark, or cause to be
marked, on such Registrable Securities delivered by such Holders
that such Registrable Securities are being cancelled in exchange
for the Exchange Notes and in no event shall such Registrable
Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if
any, participating in the disposition of such Registrable
Securities covered by a Registration Statement contemplated
hereby;
(s) use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable
Securities covered by a Registration Statement contemplated
hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (1) indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer
Registration Statement that any broker or dealer registered under
the Exchange Act who holds Notes that are Registrable Securities
and that were acquired for its own account as a result of market-
making activities or other trading activities (other than
Registrable Securities acquired directly from the Company) (such
broker or dealer, a "Participating Broker-Dealer"), may exchange
such Notes pursuant to the Exchange Offer; however, such
Participating Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities
Act in connection with any resales of the Exchange Notes received
by such Participating Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery
by such Participating Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information
with respect to such resales by Participating Broker-Dealers that
the SEC may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such
Participating Broker-Dealer or disclose the amount of Exchange
Notes held by any such Participating Broker-Dealer except to the
extent required by the Commission as a result of a change in
policy announced after the date of this Agreement, (ii) furnish
to each Participating Broker who has delivered to the Company the
notice referred to in Section 3(e), without charge, as many
copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary prospectus, and
any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request (the Company hereby consents
to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto by
any Person subject to the prospectus delivery requirements of the
Securities Act, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Notes
covered by the Prospectus or any amendment of supplement
thereto), (iii) use its reasonable best efforts to keep the
Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit
such Prospectus to be lawfully delivered by all Persons subject
to the prospectus delivery requirements of the Securities Act for
such period of time as such Persons must comply with such
requirements under the Securities Act and applicable rules and
regulations in order to resell the Exchange Notes; provided,
however, that such period shall not be required to exceed 90 days
(or such longer period if extended pursuant to the last sentence
of Section 3 hereof) (the "Applicable Period"), and (iv) include
in the transmittal letter or similar documentation to be executed
by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the exchange offeree is a broker-dealer
holding Registrable Notes acquired for its own account
as a result of market-making activities or other
trading activities, it will deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resale of Exchange Notes received
in respect of such Registrable Securities pursuant to
the Exchange Offer",
and (y) a statement to the effect that by a broker-
dealer making the acknowledgement described in clause (x) and by
delivering a Prospectus in connection with the exchange of
Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration
Statement, the Company agrees to deliver to the Initial
Purchasers or to another representative of the Participating
Broker-Dealers, if requested by any such Initial Purchasers or
such other representative of the Participating Broker-Dealers, on
behalf of the Participating Broker-Dealers upon consummation of
the Exchange Offer (i) an opinion of counsel in form and
substance reasonably satisfactory to the Initial Purchasers or
such other representative of the Participating Broker-Dealers,
covering the matters customarily covered in opinions requested in
connection with Exchange Offer Registration Statements and such
other matters as may be reasonably requested (it being agreed
that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions), (ii) an officers
certificate containing certifications substantially similar to
those set forth in certificates delivered pursuant to Section 8
of the Purchase Agreement and such additional certifications as
are customarily delivered in a public offering of debt securities
and (iii) as well as upon the effectiveness of the Exchange Offer
Registration Statement, a comfort letter, in each case, in
customary form as permitted by Statement on Auditing Standards
No. 72 and with such variations necessary to reflect the merger
transactions in August 1997 involving the Company and the
predecessors of the Company. Each of the foregoing shall be
consistent with the terms of the Purchase Agreement.
The Company may require each seller of Registrable
Securities as to which any registration is being effected to
furnish to the Company such information regarding such seller as
may be required by the Staff of the SEC to be included in a
Registration Statement. The Company may exclude from such
registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a
reasonable time after receiving such request. The Company shall
have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such
information.
In the case of (1) a Shelf Registration Statement or
(2) Participating Broker-Dealers who have notified the Company
that they will be utilizing the Prospectus contained in the
Exchange Offer Registration Statement as provided in Section 3(t)
hereof, are seeking to sell Exchange Notes and are required to
deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Company of the happening of any event of the
kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or
3(e)(vi) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration
Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i)
hereof or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed,
and, if so directed by the Company, such Holder will deliver to
the Company (at the Company's expense) all copies in such
Holder's possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such
Registrable Securities or Exchange Notes, as the case may be,
current at the time of receipt of such notice. If the Company
shall give any such notice to suspend the disposition of
Registrable Securities or Exchange Notes, as the case may be,
pursuant to a Registration Statement, the Company shall file and
use its best efforts to have declared effective (if an amendment)
as soon as practicable an amendment or supplement to the
Registration Statement and shall extend the period during which
such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days in the period
from and including the date of the giving of such notice to and
including the date when the Company shall have made available to
the Holders (x) copies of the supplemented or amended Prospectus
necessary to resume such dispositions or (y) the Advice.
4. Indemnification.
---------------
(a) In connection with any Registration Statement, the
Company shall indemnify and hold harmless each Initial Purchaser,
each Holder, each underwriter who participates in an offering of
the Registrable Securities, each Participating Broker-Dealer, and
each Person, if any, who controls any of such parties within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each an "Indemnified Party") from and against any
and all losses, claims, damages or liabilities, joint or several,
to which they or any of them may become subject under the
Securities Act or any other statute or common law and shall
reimburse each such Indemnified Party for any legal or other
expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or liabilities or
in connection with defending any actions, insofar as such losses,
claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus or
Prospectus, or in a Registration Statement, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the indemnity agreement
contained in this Section 4 as to any Indemnified Party shall not
apply to any such losses, claims, damages, liabilities, expenses
or actions arising out of, or based upon, any such untrue
statement or alleged untrue statement, or any such omission or
alleged omission, if such statement or omission was made in
reliance upon information furnished in writing to the Company by
such Indemnified Party for use in connection with the preparation
of the Registration Statement or the Prospectus or any amendment
or supplement to either thereof, or arising out of, or based
upon, statements in or omissions from the part of the
Registration Statement which shall constitute the Statement of
Eligibility and Qualification of the Trustee under the TIA; and
provided further, that the indemnity agreement contained in this
Section 4 with respect to the Prospectus (if the Company shall
have furnished any amendment or supplement thereto) shall not
inure to the benefit of any Indemnified Party on account of any
such losses, claims, damages, liabilities, expenses or actions
arising from the sale of Registrable Securities to any person if
a copy of the Prospectus (exclusive of any documents incorporated
by reference) shall not have been given or sent to such person by
or on behalf of such Indemnified Party with or prior to the
written confirmation of the sale involved unless, with respect to
the delivery of any amendment or supplement to the Prospectus,
the alleged omission or alleged untrue statement was not
corrected in such amendment or supplement at the time of such
written confirmation. The indemnity agreement of the Company
contained in this Section 4 shall remain operative and in full
force and effect regardless of any termination of this Agreement
or of any investigation made by or on behalf of any Indemnified
Party, and shall survive the registration of the Registrable
Securities.
(b) Each Holder shall indemnify, defend and hold harmless
the Company and any underwriter and other selling Holder, and
their respective officers and directors, and each person who
controls the Company or any underwriter or any other selling
Holder within the meaning of Section 15 of the Securities Act,
from and against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or any other statute or
common law and shall reimburse each of them for any legal or
other expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or liabilities or
in connection with defending any actions, insofar as such losses,
claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or the
Prospectus, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in
writing to the Company by or on behalf of such Holder, for use in
connection with the preparation of the Registration Statement or
the Prospectus or any amendment or supplement to either thereof.
The indemnity agreement of the respective Holders contained in
this Section 4 shall remain operative and in full force and
effect regardless of any termination of this Agreement or of any
investigation made by or on behalf of the Company, any
underwriter, or any other selling Holder, or their respective
directors or officers, or any such controlling person, and shall
survive the registration of the Registrable Securities; provided,
however, that, in the case of a Shelf Registration Statement, no
such Holder shall be liable for any claims hereunder in excess of
the amount of net proceeds received by such Holder from the sale
of Registrable Securities pursuant to such Shelf Registration
Statement.
(c) The Company and the Holders each shall, upon the
receipt of notice of the commencement of any action against it or
any person controlling it as aforesaid, in respect of which
indemnity may be sought on account of any indemnity agreement
contained herein, promptly give written notice of the
commencement thereof to the party or parties against whom
indemnity shall be sought hereunder, but the omission so to
notify such indemnifying party or parties of any such action
shall not relieve such indemnifying party or parties from any
liabilities which it or they may have to the indemnified party
otherwise than on account of such indemnity agreement. In case
such notice of any such action shall be so given, such
indemnifying party shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume (in
conjunction with any other indemnifying parties) the defense of
such action, in which event such defense shall be conducted by
counsel chosen by such indemnifying party or parties and
satisfactory to the indemnified party or parties who shall be
defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional
counsel retained by them; but if the indemnifying party shall
elect not to assume the defense of such action, such indemnifying
party will reimburse such indemnified party or parties for the
reasonable fees and expenses of any counsel retained by them;
provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and counsel
for the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the
representation by such counsel of both the indemnifying party and
the indemnified party, the indemnified party or parties shall
have the right to select separate counsel, satisfactory to the
indemnifying party, to participate in the defense of such action
on behalf of such indemnified party or parties (it being
understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel
representing the indemnified parties who are parties to such
action).
(d) If the indemnification provided for in (a) or (b) above
shall be unenforceable under applicable law by an indemnified
party, each indemnifying party agrees to contribute to such
indemnified party with respect to any and all losses, claims,
damages, liabilities and expenses for which each such
indemnification provided for in (a) or (b) above shall be
unenforceable, in such proportion as shall be appropriate to
reflect the relative fault of each indemnifying party on the one
hand and the indemnified party on the other in connection with
the statement or omissions which have resulted in such losses,
claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations; provided, however, that no
indemnified party guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any indemnifying party not guilty
of such fraudulent misrepresentation. Relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the
indemnified party and each such party's relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and each
of the Holders agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be
determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of
allocation which does not taken account of the equitable
consideration referred to above.
5. Participation in Underwritten Registrations. No Holder may
-------------------------------------------
participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably
required under the terms of such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
-------------------------
Securities covered by the Shelf Registration Statement who desire
to do so may sell the securities covered by such Shelf
Registration in an underwritten offering. In any such
underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be
selected by the Holders of a majority in aggregate principal
amount of the Registrable Securities included in such offering;
provided, however, that such underwriters and managers must be
reasonably satisfactory to the Company.
7. Miscellaneous.
-------------
(a) Rule 144 and Rule 144A. For so long as the Company is
----------------------
subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding,
the Company will file the reports required to be filed by it
under the Securities Act and Section 13(a) or 15(d) of the
Exchange Act and the rules and regulations adopted by the SEC
thereunder. If the Company ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is
necessary to permit sales of their securities pursuant to Rule
144 under the Securities Act, (b) deliver such information to
prospective purchasers as is necessary to permit sales of their
securities pursuant to Rule 144A under the Securities Act and it
will take such further action as any Holder of Registrable
Securities may reasonably request, and (c) take such further
action that is reasonable in the circumstances, in each case, to
the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided
by (i) Rule 144 under the Securities Act, as such rule may be
amended from time to time, (ii) Rule 144A under the Securities
Act, as such rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Securities, the Company
will deliver to such Holder a written statement as to whether it
has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not
--------------------------
entered into nor will the Company on or after the date of this
Agreement enter into any agreement which is inconsistent with the
rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to
the holders of the Company's other issued and outstanding
securities under any such agreements.
(c) Amendments and Waivers. The provisions of this
----------------------
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers of consents to
departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of at least a
majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no departure with
respect to the provisions of Section 4 hereof shall be effective
as against any Holder of Registrable Securities without the
unanimous consent of the Holders. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent
of any Holder of Registrable Securities, by written agreement
signed by the Company and Lehman Brothers Inc., to cure any
ambiguity, correct or supplement any provision of this Agreement
that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be
inconsistent with other provisions of this Agreement, (ii) this
Agreement may be amended, modified or supplemented, and waivers
and consents to departures from the provisions hereof may be
given, by written agreement signed by the Company and Lehman
Brothers Inc. to the extent that any such amendment,
modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the Staff of the
SEC) or any change therein and (iii) to the extent any provision
of this Agreement relates to the Initial Purchasers, such
provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may be given, by
written agreement signed by Lehman Brothers Inc. and the Company.
(d) Notices. All notices and other communications provided
-------
for or permitted hereunder shall be made in writing by hand-
delivery, registered first-class mail, telex, telecopier, or any
courier guaranteeing overnight delivery (i) if to a Holder, at
the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase
Agreement; and (ii) if to the Company, initially at the Company s
address set forth in the Purchase Agreement and thereafter at
such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the
next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other
communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the
Indenture.
(e) Successors and Assigns. This Agreement shall inure to
----------------------
the benefit of and be binding upon the successors, assigns and
transferees of the Initial Purchasers, including, without
limitation and without the need for an express assignment,
subsequent Holders; provided, however, that nothing herein shall
be deemed to permit any assignment, transfer or other disposition
of Registrable Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any
Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities,
such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the
benefits hereof.
(f) Third Party Beneficiary. Each of the Initial
-----------------------
Purchasers shall be a third party beneficiary of the agreements
made hereunder between the Company and the Holders and shall have
the right to enforce such agreements directly to the extent it
deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(h) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
-------------
BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND
INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS
SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF
THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(k) Securities Held by the Company or its Affiliates.
------------------------------------------------
Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or any of its
affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required
percentage.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
TEXAS UTILITIES COMPANY
By: /s/ Robert S. Shapard
------------------------
Name: Robert S. Shapard
Title: Treasurer
Confirmed and accepted as of
the date first above written:
LEHMAN BROTHERS INC.
By: /s/ Robert H. Illegible
----------------------------
CITICORP SECURITIES,
INC.
By: /s/ Illegible
----------------------------
MERRILL, LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /s/ Illegible
----------------------------
REGISTRATION RIGHTS AGREEMENT
Dated October 10, 1997
among
TEXAS UTILITIES COMPANY
and
LEHMAN BROTHERS INC.,
CITICORP SECURITIES, INC.
and
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED,
as Initial Purchasers
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of October 10, 1997 between TEXAS UTILITIES
COMPANY, a Texas corporation (the "Company"), and LEHMAN BROTHERS
INC. ("Lehman Brothers"), CITICORP SECURITIES, INC. and MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED (collectively, the
"Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated October 7, 1997 (the "Purchase Agreement"), among the
Company, as issuer of the 6.375% Series B Senior Notes 2004 (the
"Notes"), and the Initial Purchasers, which provides for, among
other things, the sale by the Company to the Initial Purchasers
of $175,000,000 principal amount of the Notes. In order to
induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide to the Initial
Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing
under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree
as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Additional Interest" shall have the meaning set forth in
-------------------
Section 2(e) hereof.
"Advice" shall have the meaning set forth in the last
------
paragraph of Section 3 hereof.
"Applicable Period" shall have the meaning set forth in
-----------------
Section 3(t) hereof.
"Business Day" shall mean a day other than (i) a Saturday or
------------
a Sunday, (ii) a day on which banks in New York, New York are
authorized or obligated by law or executive order to remain
closed or (iii) a day on which the Trustee's principal corporate
trust office is closed for business.
"Closing Date" shall mean the Closing Date as defined in the
------------
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble
-------
to this Agreement and also includes the Company's successors and
permitted assigns.
"Depositary" shall mean The Depository Trust Company, or any
----------
other depositary appointed by the Trust; provided, however, that
such depositary must have an address in the Borough of Manhattan,
in The City of New York.
"Effectiveness Period" shall have the meaning set forth in
--------------------
Section 2(b) hereof.
"Eligible Holder" shall have the meaning set forth in
---------------
Section 2(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of
------------
1934, as amended from time to time.
"Exchange Offer" shall mean the offer by the Company to the
--------------
Holders to exchange the Registrable Securities for a like
principal amount of Exchange Securities pursuant to Section 2(a)
hereof.
"Exchange Offer Registration" shall mean a registration
---------------------------
under the Securities Act effected pursuant to Section 2(a)
hereof.
"Exchange Offer Registration Statement" shall mean an
-------------------------------------
exchange offer registration statement on Form S-4 (or, if
applicable, on another appropriate form), and all amendments and
supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in
---------------
Section 2(a) hereof.
"Exchange Notes" shall mean the 6.375% Series B Exchange
--------------
Senior Notes due 2004 containing terms identical to the Notes
(except that they will not contain terms with respect to the
transfer restrictions under the Securities Act and will not
provide for any Additional Interest to be payable with respect
thereto).
"Holder" shall mean the Initial Purchasers, for so long as
------
they own any Registrable Securities, and each of their respective
successors, assigns and direct and indirect transferees who
become registered owners of Registrable Securities under the
Indenture.
"Indenture" shall mean the Indenture (for Unsecured Debt
---------
Securities Series B) relating to the Notes and the Exchange Notes
dated as of October 1, 1997 between the Company, as issuer, and
The Bank of New York, as the Trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
------------------
preamble of this Agreement.
"Inspectors" shall have the meaning set forth in Section
----------
3(n) hereof.
"Issue Date" shall mean the date of original issuance of the
----------
Notes.
"Majority Holders" shall mean the Holders of a majority of
----------------
the aggregate principal amount of outstanding Notes.
"Notes" shall have the meaning set forth in the preamble to
-----
this Agreement.
"Participating Broker-Dealer" shall have the meaning set
---------------------------
forth in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation,
------
trust or unincorporated organization, limited liability company,
or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
----------
Registration Statement, including any preliminary prospectus, and
any such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the
terms of the offering of any portion of the Registrable
Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-
effective amendments, and in each case including all material
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
------------------
preamble of this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
-------
hereof.
"Registrable Securities" shall mean the Notes; provided,
----------------------
however, that the Notes shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Notes
shall have been declared effective under the Securities Act and
such Notes shall have been disposed of pursuant to such
Registration Statement, (ii) such Notes shall have been sold to
the public pursuant to Rule 144(k) (or any similar provision then
in force, but not Rule 144A) under the Securities Act, (iii) such
Notes shall have ceased to be outstanding, (iv) such Notes have
been exchanged for Exchange Notes upon consummation of the
Exchange Offer and are thereafter freely tradable by the holder
thereof (other than an affiliate of the Company) or (v) two years
(or such shorter period as may hereafter be provided in Rule
144(k) under the Securities Act (or similar rule) have elapsed
since the date of original issuances of the Notes.
"Registration Expenses" shall mean any and all expenses
---------------------
incident to performance of or compliance by the Company with this
Agreement, including, without limitation: (i) all SEC or
National Association of Securities Dealers, Inc. (the "NASD")
registration and filing fees; (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky
laws (including reasonable fees and disbursements of counsel for
any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Notes or Registrable
Securities) and compliance with the rules of the NASD in an
amount not exceeding $15,000 in the aggregate, (iii) all expenses
of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement,
any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing
any Registration Statement, any Prospectus and any amendments or
supplements thereto, and in preparing or assisting in preparing,
printing and distributing any underwriting agreements, securities
sales agreements and other documents relating to the performance
of and compliance with this Agreement, (iv) all rating agency
fees, (v) the fees and disbursements of counsel for the Company,
of Winthrop, Stimson, Putnam & Roberts, as counsel for the
Holders hereunder in connection with the Exchange Offer, and of
the independent certified public accountants of the Company,
including the expenses of any "cold comfort" letters required by
or incident to such performance and compliance, (vi) the fees and
expenses of the Trustee, and any paying agent, exchange agent or
custodian, (vii) all fees and expenses incurred in connection
with the listing, if any, of any of the Registrable Securities or
the Exchange Notes on any securities exchange or exchanges, and
(viii) the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration
Statement.
"Registration Statement" shall mean any registration
----------------------
statement of the Company which covers any of the Exchange Notes
or Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or
------------------
such shorter period as may hereafter be provided in Rule 144(k)
under the Securities Act (or similar successor rule)) commencing
on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933, as
--------------
amended from time to time.
"Shelf Registration" shall mean a registration effected
------------------
pursuant to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth
------------------------
in Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set
-----------------------------
forth in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
----------------------------
registration statement of the Company pursuant to the provisions
of Section 2(b) hereof which covers all of the Registrable
Securities, on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the
SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"TIA" shall mean the Trust Indenture Act of 1939, as amended
---
from time to time.
"Trustee" shall mean The Bank of New York, and any successor
-------
thereto, as trustee under the Indenture.
2. Registration Under the Securities Act.
-------------------------------------
(a) Exchange Offer.
--------------
To the extent not prohibited by any applicable law or
applicable interpretation of the staff of the SEC, the Company
shall, for the benefit of the Holders, at the Company's cost, (i)
cause to be filed with the SEC an Exchange Offer Registration
Statement on an appropriate form under the Securities Act
covering the Exchange Offer, (ii) use its reasonable best efforts
to cause such Exchange Offer Registration Statement to be
declared effective under the Securities Act by the SEC not later
than the date which is 180 days after the Issue Date, and (iii)
use its reasonable best efforts to keep such Exchange Offer
Registration Statement effective for not less than 30 calendar
days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to the Holders. Upon the
effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder electing
to exchange Registrable Securities for a like principal amount of
Exchange Notes (assuming that such Holder is not an affiliate of
the Company within the meaning of Rule 405 under the Securities
Act and is not a broker-dealer tendering Registrable Securities
acquired directly from the Company for its own account, acquires
the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements or understandings with any
Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Securities) (any Holder meeting all
such requirements, hereinafter an "Eligible Holder"), and to
transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act
and under state securities or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and
related documents (together, the "Notice");
(ii) use its reasonable best efforts to keep the
Exchange Offer open for acceptance for a period of not less
than 30 days after the date Notice thereof is mailed to the
Holders (or longer if required by applicable law) (such
period referred to herein as the "Exchange Period");
(iii) utilize the services of the Depositary for the
Exchange Offer;
(iv) permit Holders to withdraw, at any time prior to
the close of business, New York time, on the last Business
Day of the Exchange Period, any Notes tendered for exchange
by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting
forth the name of such Holder, the principal amount of Notes
delivered for exchange, and a statement that such Holder is
withdrawing his election to have such Notes exchanged;
(v) notify each Holder by means of the Notice that any
Note not tendered by such Holder in the Exchange Offer will
remain outstanding and continue to accrue interest, but will
not retain any rights under this Agreement (except in the
case of the Initial Purchasers and Participating Broker-
Dealers as provided herein); and
(vi) otherwise comply in all respects with all
applicable laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange
Offer, the Company shall:
accept for exchange all Notes or portions thereof
tendered and not validly withdrawn pursuant to the Exchange
Offer;
deliver, or cause to be delivered, to the Trustee for
cancellation all Notes or portions thereof so accepted for
exchange by the Company; and
issue, and cause the Trustee to promptly authenticate
and deliver to each Holder, Exchange Notes equal in
principal amount to the principal amount of the Notes
surrendered by such Holder.
Interest on each Exchange Note issued pursuant to the
Registered Exchange Offer will accrue from the last date on which
interest was paid on the Note surrendered in exchange therefor
or, if no interest has been paid on such Note, from the Issue
Date. To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Company shall use its
reasonable best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements
of the Securities Act, the Exchange Act and other applicable laws
in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange
Offer does not violate applicable law or any applicable
interpretation of the staff of the SEC and that each Holder
tendering Notes for exchange shall be an Eligible Holder. Each
Holder of Registrable Securities who wishes to exchange such
Registrable Securities for Exchange Notes in the Exchange Offer
will be required to make certain customary representations in
connection therewith, including representations that (i) it is
not an affiliate of the Company, (ii) the Exchange Notes to be
received by it were acquired in the ordinary course of its
business and (iii) at the time of the Exchange Offer, it has no
arrangement with any person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Notes.
Each Holder hereby acknowledges and agrees that any Participating
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the Exchange Notes: (1) could
not under SEC policy as in effect on the date of this Agreement
rely on the position of the SEC enunciated in Morgan Stanley and
Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the SEC's
letter to Shearman & Sterling dated July 2, 1993, and similar no-
action letters (including any no-action letter obtained based on
the representations in clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with the secondary resale
transaction and that such a secondary resale transaction should
be covered by an effective registration statement containing the
selling security holder information required by Item 507 and 508,
as applicable, of Regulation S-K if the resales are of Exchange
Notes obtained by such Holder in exchange for Notes acquired by
such Holder directly from the Company.
Upon consummation of the Exchange Offer in accordance
with this Section 2(a), the provisions of this Agreement shall
continue to apply, mutatis mutandis, solely with respect to
Registrable Securities that are Exchange Notes held by
Participating Broker-Dealers, and the Company shall have no
further obligation to register the Registrable Securities (other
than pursuant to Section 2(b)(iii)) pursuant to Section 2(b) of
this Agreement.
(b) Shelf Registration.
------------------
In the event that (i) the Company is not permitted to
effect the Exchange Offer because of any change in law or in
currently prevailing interpretations of the staff of the SEC,
(ii) the Exchange Offer Registration Statement is not declared
effective within 180 days of the Issue Date, or (iii) (1) any
Initial Purchaser is not permitted, in the reasonable opinion of
Winthrop, Stimson, Putnam & Roberts, pursuant to applicable law
or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities
that are freely tradeable without restriction under the
Securities Act and applicable blue sky or state securities laws,
(2) such Initial Purchaser requests registration of Registrable
Securities held by such Initial Purchaser and (3) such Initial
Purchaser's request is made no later than the later of (A) the
date of filing of the Exchange Offer Registration Statement and
(B) 120 days following the Issue Date (any of the events
specified in (i) - (iii) being a "Shelf Registration Event" and
the date of occurrence thereof, the "Shelf Registration Event
Date"), the Company shall promptly deliver to the Holders and the
Trustee written notice thereof and, at its cost, file as promptly
as practicable after such Shelf Registration Event Date, and, in
any event, within 45 days after such Shelf Registration Event
Date (which shall be no earlier than 90 days after the Closing
Date) a Shelf Registration Statement providing for the sale by
the holders of all of the Registrable Securities, and shall use
its reasonable best efforts to have such Shelf Registration
Statement declared effective by the SEC as soon as practicable;
provided, however that if the Shelf Registration Event is
pursuant to clause (iii), the Company may register such
Registrable Securities together with the Exchange Offer
Registration Statement, filed pursuant to Section 2(a), and the
requirements as to timing applicable thereto. No Holder of
Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this
Agreement unless and until such Holder agrees in writing to be
bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company in writing, within 15
days after receipt of a request therefor, such information as the
Company may, after conferring with counsel with regard to
information relating to Holders that would be required by the SEC
to be included in such Shelf Registration Statement or Prospectus
included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each
Holder as to which any Shelf Registration is being effected
agrees promptly to furnish to the Company all information with
respect to such Holder necessary to make the information
previously furnished to the Company by such Holder not materially
misleading.
The Company agrees to use its reasonable best efforts to
keep the Shelf Registration Statement continuously effective for
the Rule 144(k) Period (subject to extension pursuant to the last
paragraph of Section 3 hereof) or for such shorter period which
will terminate when all of the securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be Registrable Securities
(the "Effectiveness Period"). The Company shall not permit any
securities other than Registrable Securities to be included in
the Shelf Registration. The Company will, in the event a Shelf
Registration Statement is declared effective, provide to each
Holder a reasonable number of copies of the Prospectus which is a
part of the Shelf Registration Statement and notify each such
Holder when the Shelf Registration has become effective. The
Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or by
the Securities Act or by any other rules and regulations
thereunder for shelf registrations, and the Company agrees to
furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or
filed with the SEC.
(c) Expenses.
--------
The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b)
hereof. Except as provided herein, each Holder shall pay all
expenses of its counsel, underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition
of such Holder's Registrable Securities pursuant to the Shelf
Registration Statement.
(d) Effective Registration Statement.
--------------------------------
An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof (or a combination of the two) will not be
deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has
been declared effective, the offering of Registrable Securities
pursuant to a Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the
SEC or any other governmental agency or court, such Registration
Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable
Securities pursuant to such Registration Statement may legally
resume. The Company will be deemed not to have used its
reasonable best efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may
be, to become, or to remain, effective during the requisite
period if the Company voluntarily takes any action that would
result in any such Registration Statement not being declared
effective or in the Holders of Registrable Securities covered
thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless such action is
required by applicable law.
(e) Additional Interest.
-------------------
In the event that:
(i) notwithstanding that the Company has consummated or
will consummate an Exchange Offer, the Company is required
to file a Shelf Registration Statement and such Shelf
Registration Statement is not filed on or prior to the date
required by Section 2(b) hereof, then commencing on the day
after the applicable required filing date, additional
interest shall accrue on the principal amount of the Notes
("Additional Interest") at a rate of 0.25% per annum; or
(ii) (A) the Exchange Offer Registration Statement is
not declared effective by the SEC on or prior to the 180th
day after the Issue Date or (B) whether or not the Company
has consummated or will consummate an Exchange Offer, the
Company is required to file a Shelf Registration Statement
and such Shelf Registration Statement is not declared
effective by the SEC on or prior to the 30th day after the
date such Shelf Registration Statement was required to be
filed, then, commencing on the 31st day after the applicable
required filing date, Additional Interest shall accrue on
the principal amount of the Notes at a rate of 0.25% per
annum; or
(iii) (A) the Company has not exchanged the Exchange
Notes for the Notes validly tendered, in accordance with the
terms of the Exchange Offer, on or prior to the 40th day
after the date on which the Exchange Offer Registration
Statement was declared effective or (B) the Shelf
Registration Statement has been declared effective and such
Shelf Registration Statement ceases to be effective at any
time prior to the expiration of the Rule 144(k) Period
(other than after such time as all Notes have been disposed
of thereunder or otherwise cease to be Registrable
Securities), then Additional Interest shall accrue on the
principal amount of Notes, at a rate of 0.25% per annum,
commencing on the day such Shelf Registration Statement
ceases to be effective;
provided, however, that the Additional Interest rate on the Notes
may not exceed in the aggregate 0.25% per annum; provided
further, however, that (1) upon the filing of the Shelf
Registration Statement (in the case of clause (i) above), (2)
upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of
clause (ii) above), (3) upon the exchange of Exchange Notes for
all Notes tendered (in the case of clause (iii)(A) above), or
upon the effectiveness of the Shelf Registration Statement which
had ceased to remain effective (in the case of clause (iii) (B)
above), or (4) upon the expiration of two years (or such shorter
period as may hereafter be provided in Rule 144(k) under the
Securities Act (or similar rule)) commencing on the date of
original issuance of the Notes, Additional Interest on the Notes
as a result of such clause (or the relevant subclause thereof),
as the case may be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to Section
2(e)(i), (ii) or (iii) above will be payable in cash on the
relevant payment dates for the payment of interest pursuant to
the Indenture.
(f) Specific Enforcement.
--------------------
Without limiting the remedies available to the Holders,
the Company acknowledges that any failure of the Company to
comply with its obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Holders
for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and
that, in the event of any such failure, any Holder may obtain
such relief as may be required to specifically enforce the
Company's obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
-----------------------
In connection with the obligations of the Company with
respect to the Registration Statements pursuant to Sections 2(a)
and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement
or Registration Statements as prescribed by Sections 2(a) and
2(b) hereof within (in the case of Section 2(b) hereof) the
relevant time period specified and on the appropriate form(s)
under the Securities Act, which form(s) (i) shall be selected by
the Company, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Securities by the
selling Holders thereof and (iii) shall comply as to form in all
material respects with the requirements of the applicable form
and include all financial statements required by the SEC to be
filed therewith; and use its reasonable best efforts to cause
such Registration Statement(s) to become effective and remain
effective in accordance with Section 2 hereof; provided, however,
that if (1) such filing is pursuant to Section 2(b), or (2) a
Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under
the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Notes, before filing any Registration Statement
or Prospectus or any amendments or supplements thereto, the
Company shall furnish to and afford the Holders of the
Registrable Securities and each such Participating Broker-Dealer,
as the case may be, covered by such Registration Statement, their
counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including
copies of any documents to be incorporated by reference therein
and all exhibits thereto) proposed to be filed. The Company
shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders
must be afforded an opportunity to review prior to the filing of
such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-
effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may
be; and cause each Prospectus to be supplemented, if so
determined by the Company or requested by the SEC, by any
required prospectus supplement and as so supplemented to be filed
pursuant to Rule 424 (or any similar provision then in force)
under the Securities Act, and comply with the provisions of the
Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder applicable to it with respect to the
disposition of all securities covered by each Registration
Statement during the Effectiveness Period or the Applicable
Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof
described in this Agreement (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf
Registration Statement, at least three Business Days prior to
filing, that a Shelf Registration Statement with respect to the
Registrable Securities is being filed and advising such Holder
that the distribution of Registrable Securities will be made in
accordance with the method selected by the Majority Holders; (ii)
furnish to each Holder of Registrable Securities included in the
Shelf Registration Statement and to each underwriter of an
underwritten offering of Registrable Securities, if any, without
charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto
and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or
other disposition of the Registrable Securities; (iii) consent to
the use of the Prospectus or any amendment or supplement thereto
by each of the selling Holders of Registrable Securities included
in the Shelf Registration Statement in connection with the
offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto; and (iv)
furnish to each Holder of Registrable Securities either a summary
of the terms of this Agreement or a copy of this Agreement;
(d) in the case of a Shelf Registration, cooperate with the
Trustee to register or qualify the Registrable Securities under
all applicable state securities or "blue sky" laws of such
jurisdictions by the time the applicable Registration Statement
is declared effective by the SEC as any Holder of Registrable
Securities covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Securities
shall reasonably request in writing in advance of such date of
effectiveness; provided, however, that the Company and the Trust
shall not be required to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii)
file any general consent to service of process in any
jurisdiction where it would not otherwise be subject to such
service of process or (iii) file annual reports or comply with
any other requirements deemed by the Company in its reasonable
judgment to be unduly burdensome;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company has received
prior written notice that they will be utilizing the Prospectus
contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof, are seeking to sell Exchange
Notes and are required to deliver Prospectuses, notify each
Holder of Registrable Securities, or such Participating Broker-
Dealers, as the case may be, their counsel and the managing
underwriters, if any, promptly and promptly confirm such notice
in writing (i) when a Registration Statement has become effective
and when any post-effective amendments and supplements thereto
become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional
information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the
effectiveness of a Registration Statement or the qualification of
the Registrable Securities or the Exchange Notes to be offered or
sold by any Participating Broker-Dealer in any jurisdiction
described in paragraph 3(d) hereof or the initiation of any
proceedings for that purpose, (iv) in the case of a Shelf
Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the
Company contained in any purchase agreement, securities sales
agreement or other similar agreement, if any cease to be true and
correct in all material respects, and (v) of the happening of any
event or the failure of any event to occur or the discovery of
any facts or otherwise, during the Effectiveness Period which
makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which causes
such Registration Statement or Prospectus to omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, and (vi) when the Company reasonably determines that
a post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration
Statement at the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of
such Shelf Registration Statement, without charge, at least one
conformed copy of each Registration Statement relating to such
Shelf Registration and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits
thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive
legends and in such denominations (consistent with the provisions
of the Indenture) and registered in such names as the selling
Holders or the underwriters may reasonably request at least two
Business Days prior to the closing of any sale of Registrable
Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange
Offer Registration, upon the occurrence of any circumstance
contemplated by Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi)
hereof, prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
the Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and
to notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event,
and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated
by reference into a Registration Statement or a Prospectus after
the initial filing of a Registration Statement, provide a
reasonable number of copies of such document to the Holders; and
make such of the representatives of the Company as shall be
reasonably requested by the Holders of Registrable Securities or
the Initial Purchasers on behalf of such Holders available for
reasonable discussion of such document;
(k) obtain a CUSIP number for all Exchange Notes, no later
than the effective date of a Registration Statement, and provide
the Trustee with printed certificates for the Exchange Notes or
the Registrable Securities, as the case may be, in a form
eligible for deposit with the Depositary;
(l) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Notes or
Registrable Securities, as the case may be, and effect such
changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute,
and use its reasonable best efforts to cause the Trustee to
execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the
SEC to enable such documents to be so qualified in a timely
manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary
in underwritten offerings and consistent with the terms of the
Purchase Agreement and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities,
and in such connection, whether or not an underwriting agreement
is entered into and whether or not the registration is with
respect to an underwritten offering, if requested by (x) any
Initial Purchaser, in the case where an Initial Purchaser holds
Registrable Securities acquired by it as part of its initial
distribution and (y) other Holders of Notes covered thereby: (i)
make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with
respect to the business of the Company and its subsidiaries as
then conducted and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings, and confirm
the same if and when requested; (ii) obtain opinions of counsel
to the Company and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to
the managing underwriters (if any) and the Holders of a majority
in principal amount of the Registrable Securities being sold,
addressed to each selling Holder and the underwriters (if any)
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such underwriters (it being agreed that
the matters to be covered by such opinions may be subject to
customary qualifications and exceptions); (iii) obtain "cold
comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of
any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement),
addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten
offerings and such other matters as reasonably requested by such
underwriters in accordance with Statement on Auditing Standards
No. 72; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures
no less favorable than those set forth in Section 4 hereof (or
such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section (including, without
limitation, such underwriters and selling Holders). The above
shall be done at each closing under such underwriting agreement,
or as and to the extent required thereunder and as consistent
with the terms of the Purchase Agreement;
(n) if (1) a Shelf Registration is filed pursuant to
Section 2(b) or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, make reasonably available for inspection by
any selling Holder of such Registrable Securities being sold, or
each such Participating Broker-Dealer, as the case may be, any
underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively,
the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and
its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable
due diligence responsibilities, and cause the officers, directors
and employees of the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any
such Inspector in connection with such Registration Statement;
provided, however, that the foregoing inspection and information
gathering shall be coordinated on behalf of all such parties by
Company-designated Holders' counsel, at the expense of such
parties as described in Section 2(c) hereof. Records which the
Company determines, in good faith, to be confidential and any
records which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of
such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, provided
that the Company shall be consulted prior to any such disclosure,
(ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or
is necessary in connection with any action, suit or proceeding or
(iii) the information in such Records has been made available to
the public. Each selling Holder of such Registrable Securities
and each such Participating Broker-Dealer will be required to
agree in writing that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the
securities of the Company unless and until such is made generally
available to the public. Each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be
required to further agree in writing that it will, upon learning
that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company at
its expense to undertake appropriate action to prevent disclosure
of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be
applicable and make generally available to its security holders
earning statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act), with such adjustments as
are necessary to reflect the merger transactions in August 1997
involving the Company and the predecessors of the Company, no
later than 60 days after the end of any 12-month period (or 120
days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company after the
effective date of a Registration Statement, which statements
shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer, if requested by
the Trustee, obtain an opinion of counsel to the Company
addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer and
which includes an opinion that (i) the Company has duly
authorized, executed and delivered the Exchange Notes, and (ii)
each of the Exchange Notes constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms (with customary exceptions);
(q) if an Exchange Offer is to be consummated, upon
delivery of the Registrable Securities by Holders to the Company
(or to such other Person as directed by the Company), in exchange
for the Exchange Notes, the Company shall mark, or cause to be
marked, on such Registrable Securities delivered by such Holders
that such Registrable Securities are being cancelled in exchange
for the Exchange Notes and in no event shall such Registrable
Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if
any, participating in the disposition of such Registrable
Securities covered by a Registration Statement contemplated
hereby;
(s) use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable
Securities covered by a Registration Statement contemplated
hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (1) indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer
Registration Statement that any broker or dealer registered under
the Exchange Act who holds Notes that are Registrable Securities
and that were acquired for its own account as a result of market-
making activities or other trading activities (other than
Registrable Securities acquired directly from the Company) (such
broker or dealer, a "Participating Broker-Dealer"), may exchange
such Notes pursuant to the Exchange Offer; however, such
Participating Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities
Act in connection with any resales of the Exchange Notes received
by such Participating Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery
by such Participating Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information
with respect to such resales by Participating Broker-Dealers that
the SEC may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such
Participating Broker-Dealer or disclose the amount of Exchange
Notes held by any such Participating Broker-Dealer except to the
extent required by the Commission as a result of a change in
policy announced after the date of this Agreement, (ii) furnish
to each Participating Broker who has delivered to the Company the
notice referred to in Section 3(e), without charge, as many
copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary prospectus, and
any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request (the Company hereby consents
to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto by
any Person subject to the prospectus delivery requirements of the
Securities Act, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Notes
covered by the Prospectus or any amendment of supplement
thereto), (iii) use its reasonable best efforts to keep the
Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit
such Prospectus to be lawfully delivered by all Persons subject
to the prospectus delivery requirements of the Securities Act for
such period of time as such Persons must comply with such
requirements under the Securities Act and applicable rules and
regulations in order to resell the Exchange Notes; provided,
however, that such period shall not be required to exceed 90 days
(or such longer period if extended pursuant to the last sentence
of Section 3 hereof) (the "Applicable Period"), and (iv) include
in the transmittal letter or similar documentation to be executed
by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the exchange offeree is a broker-dealer
holding Registrable Notes acquired for its own account
as a result of market-making activities or other
trading activities, it will deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resale of Exchange Notes received
in respect of such Registrable Securities pursuant to
the Exchange Offer",
and (y) a statement to the effect that by a broker-
dealer making the acknowledgement described in clause (x) and by
delivering a Prospectus in connection with the exchange of
Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration
Statement, the Company agrees to deliver to the Initial
Purchasers or to another representative of the Participating
Broker-Dealers, if requested by any such Initial Purchasers or
such other representative of the Participating Broker-Dealers, on
behalf of the Participating Broker-Dealers upon consummation of
the Exchange Offer (i) an opinion of counsel in form and
substance reasonably satisfactory to the Initial Purchasers or
such other representative of the Participating Broker-Dealers,
covering the matters customarily covered in opinions requested in
connection with Exchange Offer Registration Statements and such
other matters as may be reasonably requested (it being agreed
that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions), (ii) an officers'
certificate containing certifications substantially similar to
those set forth in certificates delivered pursuant to Section 8
of the Purchase Agreement and such additional certifications as
are customarily delivered in a public offering of debt securities
and (iii) as well as upon the effectiveness of the Exchange Offer
Registration Statement, a comfort letter, in each case, in
customary form as permitted by Statement on Auditing Standards
No. 72 and with such variations necessary to reflect the merger
transactions in August 1997 involving the Company and the
predecessors of the Company. Each of the foregoing shall be
consistent with the terms of the Purchase Agreement.
The Company may require each seller of Registrable
Securities as to which any registration is being effected to
furnish to the Company such information regarding such seller as
may be required by the Staff of the SEC to be included in a
Registration Statement. The Company may exclude from such
registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a
reasonable time after receiving such request. The Company shall
have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such
information.
In the case of (1) a Shelf Registration Statement or
(2) Participating Broker-Dealers who have notified the Company
that they will be utilizing the Prospectus contained in the
Exchange Offer Registration Statement as provided in Section 3(t)
hereof, are seeking to sell Exchange Notes and are required to
deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Company of the happening of any event of the
kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or
3(e)(vi) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration
Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i)
hereof or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed,
and, if so directed by the Company, such Holder will deliver to
the Company (at the Company's expense) all copies in such
Holder's possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such
Registrable Securities or Exchange Notes, as the case may be,
current at the time of receipt of such notice. If the Company
shall give any such notice to suspend the disposition of
Registrable Securities or Exchange Notes, as the case may be,
pursuant to a Registration Statement, the Company shall file and
use its best efforts to have declared effective (if an amendment)
as soon as practicable an amendment or supplement to the
Registration Statement and shall extend the period during which
such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days in the period
from and including the date of the giving of such notice to and
including the date when the Company shall have made available to
the Holders (x) copies of the supplemented or amended Prospectus
necessary to resume such dispositions or (y) the Advice.
4. Indemnification.
---------------
(a) In connection with any Registration Statement, the
Company shall indemnify and hold harmless each Initial Purchaser,
each Holder, each underwriter who participates in an offering of
the Registrable Securities, each Participating Broker-Dealer, and
each Person, if any, who controls any of such parties within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each an "Indemnified Party") from and against any
and all losses, claims, damages or liabilities, joint or several,
to which they or any of them may become subject under the
Securities Act or any other statute or common law and shall
reimburse each such Indemnified Party for any legal or other
expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or liabilities or
in connection with defending any actions, insofar as such losses,
claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus or
Prospectus, or in a Registration Statement, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the indemnity agreement
contained in this Section 4 as to any Indemnified Party shall not
apply to any such losses, claims, damages, liabilities, expenses
or actions arising out of, or based upon, any such untrue
statement or alleged untrue statement, or any such omission or
alleged omission, if such statement or omission was made in
reliance upon information furnished in writing to the Company by
such Indemnified Party for use in connection with the preparation
of the Registration Statement or the Prospectus or any amendment
or supplement to either thereof, or arising out of, or based
upon, statements in or omissions from the part of the
Registration Statement which shall constitute the Statement of
Eligibility and Qualification of the Trustee under the TIA; and
provided further, that the indemnity agreement contained in this
Section 4 with respect to the Prospectus (if the Company shall
have furnished any amendment or supplement thereto) shall not
inure to the benefit of any Indemnified Party on account of any
such losses, claims, damages, liabilities, expenses or actions
arising from the sale of Registrable Securities to any person if
a copy of the Prospectus (exclusive of any documents incorporated
by reference) shall not have been given or sent to such person by
or on behalf of such Indemnified Party with or prior to the
written confirmation of the sale involved unless, with respect to
the delivery of any amendment or supplement to the Prospectus,
the alleged omission or alleged untrue statement was not
corrected in such amendment or supplement at the time of such
written confirmation. The indemnity agreement of the Company
contained in this Section 4 shall remain operative and in full
force and effect regardless of any termination of this Agreement
or of any investigation made by or on behalf of any Indemnified
Party, and shall survive the registration of the Registrable
Securities.
(b) Each Holder shall indemnify, defend and hold harmless
the Company and any underwriter and other selling Holder, and
their respective officers and directors, and each person who
controls the Company or any underwriter or any other selling
Holder within the meaning of Section 15 of the Securities Act,
from and against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or any other statute or
common law and shall reimburse each of them for any legal or
other expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or liabilities or
in connection with defending any actions, insofar as such losses,
claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or the
Prospectus, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in
writing to the Company by or on behalf of such Holder, for use in
connection with the preparation of the Registration Statement or
the Prospectus or any amendment or supplement to either thereof.
The indemnity agreement of the respective Holders contained in
this Section 4 shall remain operative and in full force and
effect regardless of any termination of this Agreement or of any
investigation made by or on behalf of the Company, any
underwriter, or any other selling Holder, or their respective
directors or officers, or any such controlling person, and shall
survive the registration of the Registrable Securities; provided,
however, that, in the case of a Shelf Registration Statement, no
such Holder shall be liable for any claims hereunder in excess of
the amount of net proceeds received by such Holder from the sale
of Registrable Securities pursuant to such Shelf Registration
Statement.
(c) The Company and the Holders each shall, upon the
receipt of notice of the commencement of any action against it or
any person controlling it as aforesaid, in respect of which
indemnity may be sought on account of any indemnity agreement
contained herein, promptly give written notice of the
commencement thereof to the party or parties against whom
indemnity shall be sought hereunder, but the omission so to
notify such indemnifying party or parties of any such action
shall not relieve such indemnifying party or parties from any
liabilities which it or they may have to the indemnified party
otherwise than on account of such indemnity agreement. In case
such notice of any such action shall be so given, such
indemnifying party shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume (in
conjunction with any other indemnifying parties) the defense of
such action, in which event such defense shall be conducted by
counsel chosen by such indemnifying party or parties and
satisfactory to the indemnified party or parties who shall be
defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional
counsel retained by them; but if the indemnifying party shall
elect not to assume the defense of such action, such indemnifying
party will reimburse such indemnified party or parties for the
reasonable fees and expenses of any counsel retained by them;
provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and counsel
for the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the
representation by such counsel of both the indemnifying party and
the indemnified party, the indemnified party or parties shall
have the right to select separate counsel, satisfactory to the
indemnifying party, to participate in the defense of such action
on behalf of such indemnified party or parties (it being
understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel
representing the indemnified parties who are parties to such
action).
(d) If the indemnification provided for in (a) or (b) above
shall be unenforceable under applicable law by an indemnified
party, each indemnifying party agrees to contribute to such
indemnified party with respect to any and all losses, claims,
damages, liabilities and expenses for which each such
indemnification provided for in (a) or (b) above shall be
unenforceable, in such proportion as shall be appropriate to
reflect the relative fault of each indemnifying party on the one
hand and the indemnified party on the other in connection with
the statement or omissions which have resulted in such losses,
claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations; provided, however, that no
indemnified party guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any indemnifying party not guilty
of such fraudulent misrepresentation. Relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the
indemnified party and each such party's relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and each
of the Holders agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be
determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of
allocation which does not taken account of the equitable
consideration referred to above.
5. Participation in Underwritten Registrations. No Holder may
-------------------------------------------
participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably
required under the terms of such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
-------------------------
Securities covered by the Shelf Registration Statement who desire
to do so may sell the securities covered by such Shelf
Registration in an underwritten offering. In any such
underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be
selected by the Holders of a majority in aggregate principal
amount of the Registrable Securities included in such offering;
provided, however, that such underwriters and managers must be
reasonably satisfactory to the Company.
7. Miscellaneous.
-------------
(a) Rule 144 and Rule 144A. For so long as the Company is
----------------------
subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding,
the Company will file the reports required to be filed by it
under the Securities Act and Section 13(a) or 15(d) of the
Exchange Act and the rules and regulations adopted by the SEC
thereunder. If the Company ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is
necessary to permit sales of their securities pursuant to Rule
144 under the Securities Act, (b) deliver such information to
prospective purchasers as is necessary to permit sales of their
securities pursuant to Rule 144A under the Securities Act and it
will take such further action as any Holder of Registrable
Securities may reasonably request, and (c) take such further
action that is reasonable in the circumstances, in each case, to
the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided
by (i) Rule 144 under the Securities Act, as such rule may be
amended from time to time, (ii) Rule 144A under the Securities
Act, as such rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Securities, the Company
will deliver to such Holder a written statement as to whether it
has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not
--------------------------
entered into nor will the Company on or after the date of this
Agreement enter into any agreement which is inconsistent with the
rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to
the holders of the Company's other issued and outstanding
securities under any such agreements.
(c) Amendments and Waivers. The provisions of this
----------------------
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers of consents to
departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of at least a
majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no departure with
respect to the provisions of Section 4 hereof shall be effective
as against any Holder of Registrable Securities without the
unanimous consent of the Holders. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent
of any Holder of Registrable Securities, by written agreement
signed by the Company and Lehman Brothers Inc., to cure any
ambiguity, correct or supplement any provision of this Agreement
that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be
inconsistent with other provisions of this Agreement, (ii) this
Agreement may be amended, modified or supplemented, and waivers
and consents to departures from the provisions hereof may be
given, by written agreement signed by the Company and Lehman
Brothers Inc. to the extent that any such amendment,
modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the Staff of the
SEC) or any change therein and (iii) to the extent any provision
of this Agreement relates to the Initial Purchasers, such
provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may be given, by
written agreement signed by Lehman Brothers Inc. and the Company.
(d) Notices. All notices and other communications provided
-------
for or permitted hereunder shall be made in writing by hand-
delivery, registered first-class mail, telex, telecopier, or any
courier guaranteeing overnight delivery (i) if to a Holder, at
the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase
Agreement; and (ii) if to the Company, initially at the Company's
address set forth in the Purchase Agreement and thereafter at
such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the
next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other
communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the
Indenture.
(e) Successors and Assigns. This Agreement shall inure to
----------------------
the benefit of and be binding upon the successors, assigns and
transferees of the Initial Purchasers, including, without
limitation and without the need for an express assignment,
subsequent Holders; provided, however, that nothing herein shall
be deemed to permit any assignment, transfer or other disposition
of Registrable Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any
Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities,
such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the
benefits hereof.
(f) Third Party Beneficiary. Each of the Initial
-----------------------
Purchasers shall be a third party beneficiary of the agreements
made hereunder between the Company and the Holders and shall have
the right to enforce such agreements directly to the extent it
deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(h) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
-------------
BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND
INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS
SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF
THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(k) Securities Held by the Company or its Affiliates.
------------------------------------------------
Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or any of its
affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required
percentage.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
TEXAS UTILITIES COMPANY
By: /s/ Robert S. Shapard
------------------------
Name: Robert S. Shapard
Title: Treasurer
Confirmed and accepted as of
the date first above written:
LEHMAN BROTHERS INC.
By: /s/ Robert H. Illegible
----------------------------
CITICORP SECURITIES,
INC.
By: /s/ Illegible
----------------------------
MERRILL, LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /s/ Illegible
----------------------------
TEXAS UTILITIES COMPANY
OFFICER'S CERTIFICATE
Robert S. Shapard, the Treasurer of Texas Utilities Company
(the "Company"), pursuant to the authority granted in the Board
Resolutions of the Company dated August 14 and August 15, 1997,
and Sections 201, 301 1501 and 1502 of the Indenture defined
herein, does hereby certify to The Bank of New York (the
"Trustee"), as Trustee under the Indenture of the Company (For
Unsecured Debt Securities Series A) dated as of October 1, 1997
(the "Indenture") that:
1. The securities of the first series to be issued under the
Indenture shall be designated "6.20% Series A Senior Notes
due 2002" (the "Senior Notes of the First Series"). The
securities of the second series to be issued under the
Indenture shall be designated "6.20% Series A Exchange
Senior Notes due 2002" (the "Senior Notes of the Second
Series," and together with the Senior Notes of the First
Series, the "Senior Notes of the First and Second Series").
(The term "Senior Notes of the First or Second Series" shall
refer to either Senior Notes of the First Series or Senior
Notes of the Second Series, except as otherwise noted.) All
capitalized terms used in this certificate which are not
defined herein but are defined in the Indenture shall have
the meanings set forth in the Indenture;
2. The Senior Notes of the First and Second Series shall be
limited in aggregate principal amount to $125,000,000 at any
time Outstanding, except as contemplated in Section 301(b)
of the Indenture;
3. The Senior Notes of the First and Second Series shall mature
and the principal shall be due and payable together with all
accrued and unpaid interest thereon on October 1, 2002;
4. The Senior Notes of the First and Second Series shall be
issued in the denominations of $5,000 and in integral
multiples of $1,000 in excess thereof.
5. The Senior Notes of the First and Second Series shall bear
interest at the rate of 6.20% per annum payable semi-
annually on April 1 and October 1 of each year (each, an
"Interest Payment Date"). Interest on the Senior Notes of
the First Series will accrue from October 10, 1997, but if
interest has been paid on such Senior Notes of the First
Series, then from the most recent Interest Payment Date to
which interest has been paid or duly provided for. Interest
on the Senior Notes of the Second Series will accrue from
the most recent Interest Payment Date to which interest has
been paid on or duly provided for with respect to the Senior
Notes of the First Series, or if no such interest has been
paid or duly provided for, from October 10, 1997, but if
interest has been paid on or duly provided for with respect
to such Senior Notes of the Second Series, then from the
most recent Interest Payment Date to which interest has been
paid or duly provided for. In the event that any Interest
Payment Date is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of such delay), with the same force and
effect as if made on such Interest Payment Date;
6. Each installment of interest on a Senior Note of the First
or Second Series shall be payable to the Person in whose
name such Senior Note of the First or Second Series is
registered at the close of business on the 15th day of the
calendar month next preceding the corresponding Interest
Payment Date (the "Regular Record Date") for the Senior
Notes of the First or Second Series. Any installment of
interest on the Senior Notes of the First or Second Series
not punctually paid or duly provided for shall forthwith
cease to be payable to the Holders of such Senior Notes of
the First or Second Series on such Regular Record Date, and
may be paid to the Persons in whose name such Senior Notes
of the First or Second Series are registered at the close of
business on a Special Record Date to be fixed by the Trustee
for the payment of such Defaulted Interest. Notice of such
Defaulted Interest and Special Record Date shall be given to
the Holders of such Senior Notes of the First or Second
Series not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities
exchange on which such Senior Notes of the First or Second
Series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the
Indenture;
7. The principal and each installment of interest on the Senior
Notes of the First and Second Series shall be payable at,
and registration and registration of transfers and exchanges
in respect of the Senior Notes of the First and Second
Series may be effected at, the office or agency of the
Company in The City of New York; provided that payment of
interest may be made at the option of the Company by check
mailed to the address of the persons entitled thereto.
Notices and demands to or upon the Company in respect of the
Senior Notes of the First and Second Series may be served at
the office or agency of the Company in The City of New York.
The Corporate Trust Office of the Trustee will initially be
the agency of the Company for such payment, registration and
registration of transfers and exchanges and service of
notices and demands and the Company hereby appoints the
Trustee as its agent for all such purposes; provided,
however, that the Company reserves the right to change, by
one or more Officer's Certificates, any such office or
agency and such agent. The Trustee will be the Security
Registrar and the Paying Agent for the Senior Notes of the
First and Second Series;
8. The Senior Notes of the First Series will be redeemable as
provided in the form thereof attached hereto as Exhibit A;
the Senior Notes of the Second Series will be redeemable as
provided in the form thereof attached hereto as Exhibit B;
9. The Senior Notes of the First Series will be initially
issued pursuant to Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act"), in global form
registered in the name of Cede & Co. (as nominee for The
Depository Trust Company ("DTC"), New York, New York). The
Senior Notes of the First Series in global form shall bear
the depository legend in substantially the form set forth in
Exhibit A hereto. The Senior Notes of the First Series
shall contain restrictions on transfer, substantially as
described in the form set forth in Exhibit A hereto. Each
Senior Note of the First Series, whether in a global form or
in a certificated form, shall bear the non-registration
legend and the registration rights legend in substantially
the form set forth in such form, unless otherwise agreed by
the Company, such agreement to be confirmed in writing to
the Trustee. Nothing in the Indenture, the Senior Notes of
the First Series or this certificate shall be construed to
require the Company to register any Senior Notes of the
First Series under the Securities Act, unless otherwise
expressly agreed by the Company, confirmed in writing to the
Trustee, or to make any transfer of such Senior Notes of the
First Series in violation of applicable law. The Company
will enter into a registration rights agreement with the
initial purchasers of the Senior Notes of the First Series
pursuant to which, among other things, the Senior Notes of
the First Series may be exchanged for Senior Notes of the
Second Series registered under the Securities Act.
10. It is contemplated that beneficial interests in Senior Notes
of the First Series owned by qualified institutional buyers
(as defined in Rule 144A under the Securities Act)("QIBs")
or sold to QIBs in reliance upon Rule 144A under the
Securities Act will be represented by a global certificate
registered in the name of Cede & Co., as registered owner
and as nominee for DTC; beneficial interests in Senior Notes
of the First Series sold to foreign purchasers pursuant to
Regulation S under the Securities Act will be evidenced by
one or more separate global certificates (each the
"Regulation S Global Certificate") and will be registered in
the name of Cede & Co., as registered owner and as nominee
for DTC for the accounts of Euroclear and Cedel Bank; prior
to the 40th day after the date of initial issuance of the
Senior Notes of the First Series, beneficial interests in
the Regulation S Global Certificate may be held only through
Euroclear or Cedel Bank; Senior Notes of the First Series
acquired by Institutional Accredited Investors (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
("IAIs") and other eligible transferees, who are not QIBs
and who are not foreign purchasers pursuant to Regulation S
under the Securities Act, will be in certificated form. The
Trustee, the Security Registrar and the Company will have no
responsibility under the Indenture for transfers of
beneficial interests in the Senior Notes of the First and
Second Series.
In connection with any transfer of Senior Notes of the First
Series, the Trustee, the Security Registrar and the Company
shall be under no duty to inquire into, may conclusively
presume the correctness of, and shall be fully protected in
relying upon the certificates and other information (in the
forms attached hereto as Exhibit A, for use in connection
with the transfer of the Senior Notes of the First Series in
certificated form, or Exhibit C, for use in connection with
the transfer of beneficial interests in one global
certificate to another global certificate or to a Senior
Note of the First Series in certificated form, or otherwise)
received from the Holders and any transferees of any Senior
Notes of the First Series regarding the validity, legality
and due authorization of any such transfer, the eligibility
of the transferee to receive such Security and any other
facts and circumstances related to such transfer;
11. No service charge shall be made for the registration of
transfer or exchange of the Senior Notes of the First and
Second Series; provided, however, that the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
with the exchange or transfer;
12. If the Company shall make any deposit of money and/or
Eligible Obligations with respect to any Senior Notes of the
First or Second Series, or any portion of the principal
amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's
Certificate described in clause (z) in the first paragraph
of said Section 701 unless the Company shall also deliver to
the Trustee,together with such Officer'sCertificate, either:
(A) an instrument wherein the Company, notwithstanding
the satisfaction and discharge of its indebtedness in
respect of the Senior Notes of the First or Second Series,
shall assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee or
Paying Agent such additional sums of money, if any, or
additional Eligible Obligations (meeting the requirements of
Section 701), if any, or any combination thereof, at such
time or times, as shall be necessary, together with the
money and/or Eligible Obligations theretofore so deposited,
to pay when due the principal of and premium, if any, and
interest due and to become due on such Senior Notes of the
First or Second Series or portions thereof, all in
accordance with and subject to the provisions of said
Section 701; provided, however, that such instrument may
state that the obligation of the Company to make additional
deposits as aforesaid shall be subject to the delivery to
the Company by the Trustee of a notice asserting the
deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a
result of a change in law occurring after the date of this
certificate, the Holders of such Senior Notes of the First
or Second Series, or portions of the principal amount
thereof, will not recognize income, gain or loss for United
States federal income tax purposes as a result of the
satisfaction and discharge of the Company's indebtedness in
respect thereof and will be subject to United States federal
income tax on the same amounts, at the same times and in the
same manner as if such satisfaction and discharge had not
been effected.
13. The obligations of the Company under the Senior Notes of the
First and Second Series and under the Indenture to the
extent related to such series will be subject to assignment
by the Company to and assumption by a wholly owned
Subsidiary of the Company at any time, as provided in the
form set forth in Exhibit A hereto with respect to the
Senior Notes of the First Series, and in the form set forth
in Exhibit B hereto in the respect to the Senior Notes of
the Second Series; provided, however, that in the absence of
an Insurer Default (defined below) and so long as the
Insurance Policy (defined below) remains in effect, the
Insurer (defined below) must consent to such assignment,
which consent shall not be unreasonably withheld.
In the event that such Subsidiary assumes the obligations
under the Senior Notes of the First and Second Series, the
Company will unconditionally guarantee payment of the Senior
Notes of the First and Second Series and will execute a
guarantee in form and substance satisfactory to the Trustee.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of
such assuming Subsidiary under the Senior Notes of the First
and Second Series and under the Indenture, including,
without limitation, payment, as and when due, of the
principal of, premium, if any, and interest on, the Senior
Notes of the First and Second Series. Other than the
obligation to make payments of the principal of, premium, if
any, and interest on, the Senior Notes of the First and
Second Series, the Company will be released and discharged
from all of its other obligations under the Indenture. The
foregoing assignment and assumption shall be in compliance
with applicable law including the Securities Act.
14. The Senior Notes of the First Series shall have such other
terms and provisions as are provided in the form set forth
in Exhibit A hereto, and shall be issued in substantially
such form; the Senior Notes of the Second Series shall have
such other terms and provisions as are provided in the form
set forth in Exhibit B hereto, and shall be issued in
substantially such form.
15. Payment of the principal of and interest on the Senior Notes
of the First and Second Series when due will be guaranteed
by a financial guaranty insurance policy (the "Insurance
Policy") by MBIA Insurance Corporation (the "Insurer"). In
the absence of an Insurer Default (defined below) and so
long as the Insurance Policy remains in effect, the
following terms will be applicable to the Senior Notes of
the First and Second Series.
(A) Notice of Certain Redemptions. The Trustee shall
notify the Insurer in the manner required by Subsection (H)
hereof of any redemption of the Senior Notes of the First or
Second Series pursuant to the provisions of Section 404 of
the Indenture, of which the Trustee has actual knowledge.
(B) Notice of Default; Notices of Claims under
Insurance Policy.
(a) Events of Default. The Trustee shall give
the Insurer a notice of any Event of Default with
respect to the Senior Notes of the First or Second
Series pursuant to the provisions of Section 902 of the
Indenture, of which the Trustee has actual knowledge.
(b) Claims Under Insurance Policy
(i) If the Paying Agent has been notified by
the Company that the Company is unable to pay all
principal and interest on the Senior Notes of the
First or Second Series on any date on which
payment of principal of or interest on the
Securities of the First or Second Series is due,
the Paying Agent shall immediately notify the
Insurer or its designee by telephone or telegraph,
confirmed in writing by registered or certified
mail, of the amount of the deficiency.
(ii) If insufficient funds are received by
the Paying Agent in whole or in part on the
relevant Interest Payment Date or principal
payment date, the Paying Agent shall notify the
Insurer or its designee.
(iii) In addition, if the Paying Agent has
received written notification that any Holders
have been required to disgorge payments of
principal or interest on Senior Notes of the First
or Second Series to the Company or the trustee in
bankruptcy for creditors or others pursuant to a
final judgment by a court of competent
jurisdiction or that such payment constitutes a
voidable preference to such Holders within the
meaning of any applicable bankruptcy laws, then
the Paying Agent shall notify the Insurer or its
designee of such fact by telephone or telegraphic
notice, confirmed in writing by registered or
certified mail.
(iv) The Paying Agent is hereby irrevocably
designated, appointed, directed and authorized to
act as attorney-in-fact for the Holders as
follows:
(x) If and to the extent there is a
deficiency in amounts required to pay
interest on the Bonds, the Paying Agent shall
(1) execute and deliver to State Street Bank
and Trust Company, N.A., or its successors
under the Insurance Policy (the "Insurance
Paying Agent"), in form satisfactory to the
Insurance Paying Agent, an instrument
appointing the Insurer as agent for such
Holders in any legal proceeding related to
the payment of such interest and an
assignment to the Insurer of any claims for
interest to which such deficiency relates and
which are paid by the Insurer, (2) receive as
designee of the respective Holders (and not
as Paying Agent) in accordance with the tenor
of the Insurance Policy payment from the
Insurance Paying Agent with respect to the
claims for interest so assigned and (3)
disburse the same to such respective Holders;
and
(y) If and to the extent there is a
deficiency in amounts required to pay
principal of the Senior Notes of the First or
Second Series, the Paying Agent shall (1)
execute and deliver to the Insurance Paying
Agent, in form satisfactory to the Insurance
Paying Agent, an instrument appointing the
Insurer as agent for such Holders in any
legal proceeding related to the payment of
such principal and an assignment to the
Insurer of any of the Senior Notes of the
First or Second Series surrendered to the
Insurance Paying Agent of so much of the
principal amount thereof as has not
previously been paid or for which moneys are
not held by the Paying Agent and available
for such payment (but such assignment shall
be delivered only if payment from the
Insurance Paying Agent is received), (2)
receive as designee of the respective Holders
(and not as Paying Agent) in accordance with
the tenor of the Insurance Policy payment
from the Insurance Paying Agent with respect
to the claims for principal so assigned and
(3) disburse the same to such respective
Holders.
(v) Irrespective of whether any such
assignment is executed and delivered, the Company
and the Paying Agent hereby agree for the benefit
of the Insurer that:
(x) to the extent the Insurer makes
payments, directly or indirectly (as by
paying through the Paying Agent), on account
of principal of or interest on the Senior
Notes of the First or Second Series, the
Insurer will be subrogated to the rights of
such Holders to receive the amount of such
principal and interest from the Company, with
interest thereon as provided in the Indenture
and the Senior Notes of the First or Second
Series; and
(y) the Company will accordingly pay to
the Insurer the amount of such principal and
interest (including reimbursement of any such
payment of principal and interest recovered
from any Holder pursuant to a final judgment
by a court of competent jurisdiction that
such payment constitutes an avoidable
preference to such Holder within the meaning
of any applicable bankruptcy law, which
principal and interest shall be deemed past
due and not to have been paid) paid by the
Insurer to any Holders, and will otherwise
treat the Insurer as the owner of such rights
to the amount of such principal and interest.
(C) Deemed Holder for Default and Remedies. For all
purposes of Article Eight of the Indenture other than
Sections 802 and 808, the Insurer shall be deemed to be the
sole Holder of the Senior Notes of the First and Second
Series. Notwithstanding Section 802, without the written
consent of the Insurer, which consent shall not be
unreasonably withheld, (a) upon the occurrence of an Event
of Default, the principal of the Senior Notes of the First
and Second Series then Outstanding and interest thereon
shall not become immediately due and payable and (b) the
Trustee may not waive a default or annul a declaration that
the principal of the Senior Notes of the First and Second
Series and interest thereon are immediately due and payable.
(D) Supplemental Indentures. Anything in the
Indenture to the contrary notwithstanding, no consent or
approval of any Holder of Senior Notes of the First or
Second Series to any Supplemental Indenture pursuant to
Section 1202 of the Indenture shall become effective without
the written consent of the Insurer, which consent shall not
be unreasonably withheld. In the case of any Supplemental
Indenture requiring the consent of Holders of Senior Notes
of the First or Second Series, at least 15 Business Days
prior to executing such proposed Supplemental Indenture, the
Trustee shall give notice of such execution together with a
copy of such Supplemental Indenture to the Insurer. The
Trustee shall give notice to the Insurer of any Supplemental
Indenture not requiring the consent of Holders.
(E) Successor Trustees. The Trustee shall give
written notice of its resignation in accordance with Section
910 of the Indenture to the Insurer at the same time such
notice is given to the Company. The Company shall give
notice to the Insurer of its removal of the Trustee and of
its appointment of a successor Trustee in the event of a
resignation or removal of the Trustee, all in accordance
with Subsection H hereof.
(F) Bond Insurer as Party in Interest. The Insurer
shall be included as a party in interest with respect to the
Senior Notes of the First and Second Series under the
Indenture.
(G) Access to the Register. Upon the occurrence of an
Event of Default which would require the Insurer to make
payments of principal of or interest on the Senior Notes of
the First and Second Series in accordance with the Insurance
Policy, the Paying Agent shall provide access to the books
kept for the registration of transfer of Senior Notes of
such First or Second Series to the Insurer, the Insurance
Paying Agent or other designee of the Insurer.
(H) Notices to Insurer. All notices, consents or
other communications required or permitted to be given to
the Insurer under the Indenture shall be deemed sufficiently
given if given in writing, mailed by registered or certified
mail, postage prepaid and addressed to the following
address: MBIA Insurance Corporation, 113 King Street,
Armonk, New York 10504 Attention: Surveillance Department.
The Insurer may from time to time give notice in writing to
all parties to the Indenture designating a different address
or addresses for notice thereunder.
(I) Termination of Special Insurance Requirements.
The provisions of this Section 15 (other than the first
sentence hereof) shall apply only so long as there is no
Insurer Default (defined below).
(J) Confirmation of Application of Term "Outstanding"
to Senior Notes of the First and Second Series paid by
Insurer, Recordation of Rights of Subrogation in
Registration Books.
(a) Notwithstanding anything herein to the
contrary, in the event that the principal and/or
interest due on the Senior Notes of the First or Second
Series shall be paid by the Insurer pursuant to the
Insurance Policy, such Senior Notes of the First or
Second Series (i) shall continue to be Outstanding
within the meaning of the Indenture for all purposes;
(ii) shall not be considered defeased, otherwise
satisfied or paid by the Company, and (iii) the
assignment and pledge of the Indenture and all
covenants, agreements and other obligations of the
Company to the registered owners shall continue to
exist and shall run to the benefit of the Insurer, and
the Insurer shall be subrogated to the rights of such
registered owners to the extent of each such payment.
(b) To assist the Trustee in allocating available
money held under the Indenture, (i) in the case of
subrogation as to claims for past due interest, the
Security Registrar shall note the Insurer's rights as
subrogee on the registration books of the Company
maintained by the Security Registrar upon receipt from
the Insurer of proof of the payment of interest thereon
to the registered owners of the Senior Notes of the
First or Second Series, and (ii) in the case of
subrogation as to claims for past due principal, the
Trustee shall note the Insurer's rights as subrogee on
the registration books of the Company maintained by the
Security Registrar upon surrender of the Senior Notes
of the First or Second Series by the registered owners
thereof together with proof of the payment of principal
thereof.
"Insurer Default" means any of the following events:
(A) The occurrence and continuance of one or more of
the following events: (a) the issuance of an order of
rehabilitation, liquidation or dissolution of the Insurer;
(b) the commencement by the Insurer of a voluntary case or
other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
in effect including, without limitation, the appointment of
a trustee, receiver, liquidator, custodian or other similar
official for itself or any substantial part of its property;
(c) the consent of the Insurer to or the acquiescence by the
Insurer in any case or proceeding described in the preceding
clause (b) that is commenced against it; (d) the making by
the Insurer of an assignment for the benefit of creditors;
(e) the failure of the Insurer or the admission by the
Insurer in writing of its inability to generally pay its
debts or claims as they become due; (f) the initiation by
the Insurer of any actions to authorize any of the
foregoing; (g) the commencement of an involuntary case or
other proceeding against the Insurer seeking liquidation,
reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case remaining undismissed and unstayed for
a period of 60 days; or (h) the entering of an order for
relief against the Insurer under the federal bankruptcy laws
as now or hereafter in after;
(B) The Insurer shall fail, wholly or partially, to
make a payment when and as required under the provisions of
the Insurance Policy (including without limitation,
principal of and interest on the Senior Notes of the First
or Second Series);
(C) The Insurer (or any Person acting on behalf of the
Insurer) purports to surrender, cancel, terminate or amend
or modify in any material respect, the Insurance Policy,
without each Holder's prior written consent; or
(D) A court of competent jurisdiction enters a final
nonappealable judgment that the Insurance Policy is not
valid and binding or enforceable against the Insurer.
16. The undersigned has read all of the covenants and
conditions contained in the Indenture relating to the
issuance of the Senior Notes of the First and Second
Series and the definitions in the Indenture relating
thereto and in respect of which this certificate is
made;
17. The statements contained in this certificate are based
upon the familiarity of the undersigned with the
Indenture, the documents accompanying this certificate,
and upon discussions by the undersigned with officers
and employees of the Company familiar with the matters
set forth herein;
18. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to enable
him to express an informed opinion whether or not such
covenants and conditions have been complied with; and
19. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including
any covenants compliance with which constitutes a
condition precedent) to the authentication and delivery
of the Senior Notes of the First and Second Series
requested in the accompanying Company Order have been
complied with.
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this 10th day of October, 1997.
/s/ Robert S. Shapard
------------------------------
Treasurer
<PAGE>
EXHIBIT A
[depository legend]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
[non-registration legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE
COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED OTHER THAN (1) TO THE COMPANY, (2) IN A
TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT, (3) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY), OR (5) TO AN INSTITUTION THAT IS
AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM
ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN
INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT
WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND
OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT
ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS
(1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF, OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF
RULE 902 UNDER, REGULATION S UNDER THE SECURITIES ACT."
[registration rights legend]
The Holder of this Security, by acceptance hereof, will be
deemed to have agreed to be bound by the provisions of the
Registration Rights Agreement dated October 10, 1997, between the
Company and the initial purchasers of this Security.
NO. CUSIP NO.
--------------- ----------
[FORM OF FACE OF SENIOR NOTE]
TEXAS UTILITIES COMPANY
6.20% SERIES A SENIOR NOTES DUE 2002
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State Texas (herein referred to as
the "Company", which term includes any successor Person under the
Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on October 1, 2002, and to pay interest on said principal
sum semi-annually on April 1 and October 1 of each year (each an
Interest Payment Date) at the rate of 6.20% per annum until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from October 10,
1997, to the first Interest Payment Date, and thereafter will
accrue from the last Interest Payment Date to which interest has
been paid or duly provided for. In the event that any Interest
Payment Date is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of such delay) with the same force and effect
as if made on the Interest Payment Date. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the 15th day of the
calendar month next preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
-------------------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series A), dated as of October 1,
1997 (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on October 10, 1997
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $125,000,000.
REDEMPTION
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest hereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 5 basis points,
plus (b) accrued interest on the principal amount hereof to the
Redemption Date.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers, Inc., Citicorp Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and their respective
successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest will cease to accrue on the Securities
of this series or portions thereof called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the Senior
Notes to be redeemed shall equal the sum of (a) the greater of
(i) 100% of the principal amount of such Senior Notes, and (ii)
the sum of the present values of the remaining scheduled payments
of principal and interest thereon from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture) plus 5 basis points plus
accrued interest on the principal amount hereof to the Redemption
Date."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $5,000 and in
integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement
and a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the
extent related to such series primary obligations of such
Subsidiary, substituting such Subsidiary of the Company for the
Company in the form of the Securities of this series and in
provisions of the Indenture to the extent related to such series
and releasing and discharging the Company from its obligations
under the Securities of this series and the Indenture to the
extent related to such series; and (b) the Trustee shall
have received (i) an executed counterpart of such assumption
agreement and supplemental indenture; (ii) evidence satisfactory
to the Trustee and the Company that all necessary authorizations,
consents, orders, approvals, waivers, filings and declarations of
or with, Federal, state, county, municipal, regional or
other governmental authorities, agencies or boards (collectively,
"Governmental Actions") relating to such assumption have been duly
obtained and are in full force and effect, (iii) evidence
satisfactory to the Trustee that any security interest intended
to be created by the Indenture is not in any material way
adversely affected or impaired by any of the agreements or
transactions relating to such assumption and (iv) an Opinion
of Counsel for such Subsidiary, reasonably satisfactory in
substance, scope and form to the Trustee and the Company, to
the effect that (A) the supplemental indenture evidencing such
assumption has been duly authorized, executed and delivered by
such Subsidiary, (B) the execution and delivery by such
Subsidiary of such supplemental indenture and the consummation
of the transactions contemplated thereby do not contravene
any provision of law or any governmental rule applicable to
such Subsidiary or any provision of such Subsidiary's charter
documents or by-laws and do not contravene any provision of,
or constitute a default under, or result in the creation or
imposition of any lien upon any of such Subsidiary's properties
or assets under any indenture, mortgage, contract or other
agreement to which such Subsidiary is a party or by which such
Subsidiary or any of its properties may be bound or affected, (C)
all necessary Governmental Actions relating to such assumption
have been duly obtained and are in full force and effect and (D)
such agreement and supplemental indenture constitute the
legal, valid and binding obligations of such Subsidiary,
enforceable in accordance with their respective terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar
laws at the time in effect affecting the rights of creditors
generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee, and, other than the obligation to
make payments of the principal of, premium, if any, and interest
on, the Securities of this series, the Company shall be released
and discharged from all other obligations under the Indenture.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of such
assuming Subsidiary under the Securities of this series and under
the Indenture, including, without limitation, payment, as and
when due, of the principal of, premium, if any, and interest on,
the Securities of this series.
So long as the Insurance Policy described hereafter
remains in effect and in the absence of an Insurer Default,
certain rights of the Holders of the Securities of this series
are limited as described in the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
[CERTIFICATE OF TRANSFER]
6.20% SERIES A SENIOR NOTES DUE 2002
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------
-------------------------------- -----------------------------
Name and address of assignee
must be printed or
typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocable
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
The undersigned certifies that said Security is being resold,
pledged or otherwise transferred as follows: (check one)
[ ] to the Company;
[ ] to a Person whom the undersigned reasonably believes is a
qualified institutional buyer within the meaning of Rule
144A under the Securities Act of 1933, as amended (the
"Securities Act") purchasing for its own account or for the
account of a qualified institutional buyer to whom notice is
given that the resale, pledge or other transfer is being
made in reliance on Rule 144A;
[ ] in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act;
[ ] to an institution that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is acquiring this Security for
investment purposes and not for distribution; (attach a copy
of an Investment Letter For Institutional Accredited
Investors in the form annexed signed by an authorized
officer of the transferee)
[ ] as otherwise permitted by the non-registration legend
appearing on this Security; or
[ ] as otherwise agreed by the Company, confirmed in writing to
the Trustee, as follows: [describe]
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
<PAGE>
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a
policy containing the following provisions, such policy being on
file at The Bank of New York, New York, New York.
The Insurer, in consideration of the payment of the premium
and subject to the terms of this policy, hereby unconditionally
and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete
payment required to be made by or on behalf of the Company to The
Bank of New York or its successor (the "Paying Agent") of an
amount equal to (i) the principal of (either at the stated
maturity or by an advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on, the Obligations (as that
term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from
default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times
as such payments of principal would have been due had there not
been any such acceleration); and (ii) the reimbursement of any
such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations" shall mean:
$125,000,000
Texas Utilities Company
6.20% Series A Senior Notes due 2002
Upon receipt of telephonic or telegraphic notice, such
notice subsequently confirmed in writing by registered or
certified mail, or upon receipt of written notice by registered
or certified mail, by the Insurer from the Paying Agent or any
owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made,the
Insurer on the due date of such payment or within one Business
Day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or
its successor, sufficient for the payment of any such Insured
Amounts which are then due. Upon presentment and surrender of
such Obligations or presentment of such other proof of ownership
of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to
payment of Insured Amounts on the Obligations, such instruments
being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the
Insured Amounts due on such Obligations, less any amount held by
the Paying Agent for the payment of such Insured Amounts and
legally available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein, the term "owner" shall mean the registered
owner of any Obligation as indicated in the books maintained by
the Security Registrar, Paying Agent, the Company, or any
designee of the Company for such purpose. The term owner shall
not include the Company or any party whose agreement with the
Company constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the
Insurer at its offices located at 113 King Street, Armonk, New
York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium
on this policy is not refundable for any reason including the
payment prior to maturity of the Obligations.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION. In the event the
Insurer is unable to fulfill its contractual obligation under
this policy or contract or application or certificate or evidence
of coverage, the policyholder or certificateholder is not
protected by an insurance guaranty fund or other solvency
protection arrangement.
<PAGE>
EXHIBIT B
[depository legend]
[Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
NO. CUSIP NO.
--------------- ----------
[FORM OF FACE OF EXCHANGE SENIOR NOTE]
TEXAS UTILITIES COMPANY
6.20% SERIES A EXCHANGE SENIOR NOTES DUE 2002
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State Texas (herein referred to as
the "Company", which term includes any successor Person under the
Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on October 1, 2002, and to pay interest on said principal
sum semi-annually on April 1 and October 1 of each year (each an
Interest Payment Date) at the rate of 6.20% per annum until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from ,
--------------
to the first Interest Payment Date, and thereafter will accrue
from the last Interest Payment Date to which interest has been
paid or duly provided for. In the event that any Interest Payment
Date is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of such delay) with the same force and effect as if made
on the Interest Payment Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the 15th
day of the calendar month next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
---------------------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF EXCHANGE SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series A), dated as of October 1,
1997 (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on October 10, 1997
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $125,000,000.
REDEMPTION
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest hereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 5 basis points,
plus (b) accrued interest on the principal amount hereof to the
Redemption Date.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers, Inc., Citicorp Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and their respective
successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest will cease to accrue on the Securities
of this series or portions thereof called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the Senior
Notes to be redeemed shall equal the sum of (a) the greater of
(i) 100% of the principal amount of such Senior Notes, and (ii)
the sum of the present values of the remaining scheduled payments
of principal and interest thereon from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture) plus 5 basis points plus
accrued interest on the principal amount hereof to the Redemption
Date."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $5,000 and in
integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement
and a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the
extent related to such series primary obligations of such
Subsidiary, substituting such Subsidiary of the Company for
the Company in the form of the Securities of this series and
in provisions of the Indenture to the extent related to such
series and releasing and discharging the Company from its
obligations under the Securities of this series and the
Indenture to the extent related to such series; and (b) the
Trustee shall have received (i) an executed counterpart of
such assumption agreement and supplemental indenture; (ii)
evidence satisfactory to the Trustee and the Company that all
necessary authorizations, consents, orders, approvals, waivers,
filings and declarations of or with, Federal, state, county,
municipal, regional or other governmental authorities,
agencies or boards (collectively, "Governmental Actions")
relating to such assumption have been duly obtained and are in
full force and effect, (iii) evidence satisfactory to the Trustee
that any security interest intended to be created by the Indenture
is not in any material way adversely affected or impaired
by any of the agreements or transactions relating to such
assumption and (iv) an Opinion of Counsel for such
Subsidiary, reasonably satisfactory in substance, scope and form
to the Trustee and the Company, to the effect that (A) the
supplemental indenture evidencing such assumption has been duly
authorized, executed and delivered by such Subsidiary, (B) the
execution and delivery by such Subsidiary of such supplemental
indenture and the consummation of the transactions contemplated
thereby do not contravene any provision of law or any
governmental rule applicable to such Subsidiary or any provision
of such Subsidiary's charter documents or by-laws and do not
contravene any provision of, or constitute a default under, or
result in the creation or imposition of any lien upon any of such
Subsidiary's properties or assets under any indenture, mortgage,
contract or other agreement to which such Subsidiary is a party
or by which such Subsidiary or any of its properties may be bound
or affected, (C) all necessary Governmental Actions relating to
such assumption have been duly obtained and are in full force and
effect and (D) such agreement and supplemental indenture
constitute the legal, valid and binding obligations of such
Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws at the time in effect affecting the rights of
creditors generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee, and, other than the obligation to
make payments of the principal of, premium, if any, and interest
on, the Securities of this series, the Company shall be released
and discharged from all other obligations under the Indenture.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of such
assuming Subsidiary under the Securities of this series and under
the Indenture, including, without limitation, payment, as and
when due, of the principal of, premium, if any, and interest on,
the Securities of this series.
So long as the Insurance Policy described hereafter
remains in effect and in the absence of an Insurer Default,
certain rights of the Holders of the Securities of this series
are limited as described in the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
FOR VALUE RECEIVED, the undersigned sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
-----------------------------
----------------------------- ------------------------------
Name and address of assignee
must be printed or typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocable
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
<PAGE>
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a
policy containing the following provisions, such policy being on
file at The Bank of New York, New York, New York.
The Insurer, in consideration of the payment of the premium
and subject to the terms of this policy, hereby unconditionally
and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete
payment required to be made by or on behalf of the Company to The
Bank of New York or its successor (the "Paying Agent") of an
amount equal to (i) the principal of (either at the stated
maturity or by an advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on, the Obligations (as that
term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from
default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times
as such payments of principal would have been due had there not
been any such acceleration); and (ii) the reimbursement of any
such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations" shall mean:
$125,000,000
Texas Utilities Company
6.20% Series A Senior Notes due 2002
Upon receipt of telephonic or telegraphic notice, such
notice subsequently confirmed in writing by registered or
certified mail, or upon receipt of written notice by registered
or certified mail, by the Insurer from the Paying Agent or any
owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made,the
Insurer on the due date of such payment or within one Business
Day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or
its successor, sufficient for the payment of any such Insured
Amounts which are then due. Upon presentment and surrender of
such Obligations or presentment of such other proof of ownership
of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to
payment of Insured Amounts on the Obligations, such instruments
being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the
Insured Amounts due on such Obligations, less any amount held by
the Paying Agent for the payment of such Insured Amounts and
legally available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein, the term "owner" shall mean the registered
owner of any Obligation as indicated in the books maintained by
the Security Registrar, Paying Agent, the Company, or any
designee of the Company for such purpose. The term owner shall
not include the Company or any party whose agreement with the
Company constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the
Insurer at its offices located at 113 King Street, Armonk, New
York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium
on this policy is not refundable for any reason including the
payment prior to maturity of the Obligations.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION. In the event the
Insurer is unable to fulfill its contractual obligation under
this policy or contract or application or certificate or evidence
of coverage, the policyholder or certificateholder is not
protected by an insurance guaranty fund or other solvency
protection arrangement.
<PAGE>
EXHIBIT C
[CERTIFICATE OF TRANSFER]
TEXAS UTILITIES COMPANY
6.20% SERIES A SENIOR NOTES DUE 2002
PRINCIPAL AMOUNT: $
---------------
FOR VALUE RECEIVED, the undersigned sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
----------------------------------
---------------------------------- ---------------------------
Name and address of assignee
must be printed or
typewritten.
-----------------------------------------------------------------
the referenced Security of the Company and does hereby
irrevocable constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
The undersigned certifies that said Security is being resold,
pledged or otherwise transferred as follows: (check one)
[ ] to the Company;
[ ] to a Person whom the undersigned reasonably believes is a
qualified institutional buyer within the meaning of Rule
144A under the Securities Act of 1933, as amended (the
"Securities Act") purchasing for its own account or for the
account of a qualified institutional buyer to whom notice is
given that the resale, pledge or other transfer is being
made in reliance on Rule 144A;
[ ] in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act;
[ ] to an institution that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is acquiring this Security for
investment purposes and not for distribution; (attach a copy
of an Investment Letter For Institutional Accredited
Investors in the form annexed signed by an authorized
officer of the transferee)
[ ] as otherwise permitted by the non-registration legend
appearing on this Security; or
[ ] as otherwise agreed by the Company, confirmed in writing to
the Trustee, as follows: [describe]
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
All terms used in this certificate which are defined in
the Indenture pursuant to which said Security was issued shall
have the meanings assigned to them in the Indenture.
<PAGE>
FORM OF ACCREDITED INVESTOR LETTER
[Transferor Name and Address]
Ladies and Gentlemen:
In connection with our proposed purchase of % Series
Notes due (the "Senior Notes") issued by Texas
Utilities Company ("Issuer"), we confirm that:
1. We have received a copy of the Offering
Memorandum (the "Offering Memorandum") relating to the
Senior Notes and such other information as we deem necessary
in order to make our investment decision. We acknowledge
that we have read and agree to the matters stated under the
caption NOTICE TO INVESTORS in such Offering Memorandum, and
the restrictions on duplication or circulation of, or
disclosure relating to, such Offering Memorandum.
2. We understand that any subsequent transfer of the
Senior Notes is subject to certain restrictions and
conditions set forth in the Indenture relating to Senior
Notes (the "Indenture") and that any subsequent transfer of
the Senior Notes is subject to certain restrictions and
conditions set forth under NOTICE TO INVESTORS in the
Offering Memorandum and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the
Senior Notes except in compliance with such restrictions and
conditions and the Securities Act of 1933, as amended
("Securities Act").
3. We understand that the offer and sale of the
Senior Notes have not been registered under the Securities
Act, and that the Senior Notes may not be offered or sold
except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we sell any Senior
Notes, we will do so only (A) to the Company, (B) in
accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to
an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnishes to the Trustee (as
defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions
on transfer of the Senior Notes (substantially in the form
of this letter) and, if such transfer is in respect of an
aggregate principal amount of Senior Notes at the time of
transfer of less than $100,000, an opinion of counsel
acceptable to the Issuer that such transfer is in compliance
with the Securities Act, (D) outside the United States in
accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act
(if available), or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to
provide to any person purchasing any of the Senior Notes
from us a notice advising such purchaser that resales of the
Senior Notes are restricted as stated herein.
4. We understand that, on any proposed resale of any
Senior Notes, we will be required to furnish to the Trustee
and Issuer such certifications, legal opinions and other
information as the Trustee and Issuer may reasonably require
to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the
Senior Notes purchased by us will bear a legend to the
foregoing effect.
5. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) and have such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment
in the Senior Notes, and we and any accounts for which are
acting are each able to bear the economic risk of our or its
investment.
6. We are acquiring the Senior Notes purchased by us
for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each
of which we exercise sole investment discretion.
You, the Issuer and the Trustee are entitled to rely upon
this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters
covered hereby.
Very truly yours,
By:____________________
Name:
Title:
TEXAS UTILITIES COMPANY
OFFICER'S CERTIFICATE
Robert S. Shapard, the Treasurer of Texas Utilities Company
(the "Company"), pursuant to the authority granted in the Board
Resolutions of the Company dated August 14 and August 15, 1997,
and Sections 201, 301 1501 and 1502 of the Indenture defined
herein, does hereby certify to The Bank of New York (the
"Trustee"), as Trustee under the Indenture of the Company (For
Unsecured Debt Securities Series B) dated as of October 1, 1997
(the "Indenture") that:
1. The securities of the first series to be issued under the
Indenture shall be designated "6.375% Series B Senior Notes
due 2004" (the "Senior Notes of the First Series"). The
securities of the second series to be issued under the
Indenture shall be designated "6.375% Series B Exchange
Senior Notes due 2004" (the "Senior Notes of the Second
Series," and together with the Senior Notes of the First
Series, the "Senior Notes of the First and Second Series").
(The term "Senior Notes of the First or Second Series" shall
refer to either Senior Notes of the First Series or Senior
Notes of the Second Series, except as otherwise noted.) All
capitalized terms used in this certificate which are not
defined herein but are defined in the Indenture shall have
the meanings set forth in the Indenture;
2. The Senior Notes of the First and Second Series shall be
limited in aggregate principal amount to $175,000,000 at any
time Outstanding, except as contemplated in Section 301(b)
of the Indenture;
3. The Senior Notes of the First and Second Series shall mature
and the principal shall be due and payable together with all
accrued and unpaid interest thereon on October 1, 2004;
4. The Senior Notes of the First and Second Series shall be
issued in the denominations of $5,000 and in integral
multiples of $1,000 in excess thereof.
5. The Senior Notes of the First and Second Series shall bear
interest at the rate of 6.375% per annum payable semi-
annually on April 1 and October 1 of each year (each, an
"Interest Payment Date"). Interest on the Senior Notes of
the First Series will accrue from October 10, 1997, but if
interest has been paid on such Senior Notes of the First
Series, then from the most recent Interest Payment Date to
which interest has been paid or duly provided for. Interest
on the Senior Notes of the Second Series will accrue from
the most recent Interest Payment Date to which interest has
been paid on or duly provided for with respect to the Senior
Notes of the First Series, or if no such interest has been
paid or duly provided for, from October 10, 1997, but if
interest has been paid on or duly provided for with respect
to such Senior Notes of the Second Series, then from the
most recent Interest Payment Date to which interest has been
paid or duly provided for. In the event that any Interest
Payment Date is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of such delay), with the same force and
effect as if made on such Interest Payment Date;
6. Each installment of interest on a Senior Note of the First
or Second Series shall be payable to the Person in whose
name such Senior Note of the First or Second Series is
registered at the close of business on the 15th day of the
calendar month next preceding the corresponding Interest
Payment Date (the "Regular Record Date") for the Senior
Notes of the First or Second Series. Any installment of
interest on the Senior Notes of the First or Second Series
not punctually paid or duly provided for shall forthwith
cease to be payable to the Holders of such Senior Notes of
the First or Second Series on such Regular Record Date, and
may be paid to the Persons in whose name such Senior Notes
of the First or Second Series are registered at the close of
business on a Special Record Date to be fixed by the Trustee
for the payment of such Defaulted Interest. Notice of such
Defaulted Interest and Special Record Date shall be given to
the Holders of such Senior Notes of the First or Second
Series not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities
exchange on which such Senior Notes of the First or Second
Series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the
Indenture;
7. The principal and each installment of interest on the Senior
Notes of the First and Second Series shall be payable at,
and registration and registration of transfers and exchanges
in respect of the Senior Notes of the First and Second
Series may be effected at, the office or agency of the
Company in The City of New York; provided that payment of
interest may be made at the option of the Company by check
mailed to the address of the persons entitled thereto.
Notices and demands to or upon the Company in respect of the
Senior Notes of the First and Second Series may be served at
the office or agency of the Company in The City of New York.
The Corporate Trust Office of the Trustee will initially be
the agency of the Company for such payment, registration and
registration of transfers and exchanges and service of
notices and demands and the Company hereby appoints the
Trustee as its agent for all such purposes; provided,
however, that the Company reserves the right to change, by
one or more Officer's Certificates, any such office or
agency and such agent. The Trustee will be the Security
Registrar and the Paying Agent for the Senior Notes of the
First and Second Series;
8. The Senior Notes of the First Series will be redeemable as
provided in the form thereof attached hereto as Exhibit A;
the Senior Notes of the Second Series will be redeemable as
provided in the form thereof attached hereto as Exhibit B;
9. The Senior Notes of the First Series will be initially
issued pursuant to Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act"), in global form
registered in the name of Cede & Co. (as nominee for The
Depository Trust Company ("DTC"), New York, New York). The
Senior Notes of the First Series in global form shall bear
the depository legend in substantially the form set forth in
Exhibit A hereto. The Senior Notes of the First Series
shall contain restrictions on transfer, substantially as
described in the form set forth in Exhibit A hereto. Each
Senior Note of the First Series, whether in a global form or
in a certificated form, shall bear the non-registration
legend and the registration rights legend in substantially
the form set forth in such form, unless otherwise agreed by
the Company, such agreement to be confirmed in writing to
the Trustee. Nothing in the Indenture, the Senior Notes of
the First Series or this certificate shall be construed to
require the Company to register any Senior Notes of the
First Series under the Securities Act, unless otherwise
expressly agreed by the Company, confirmed in writing to the
Trustee, or to make any transfer of such Senior Notes of the
First Series in violation of applicable law. The Company
will enter into a registration rights agreement with the
initial purchasers of the Senior Notes of the First Series
pursuant to which, among other things, the Senior Notes of
the First Series may be exchanged for Senior Notes of the
Second Series registered under the Securities Act.
10. It is contemplated that beneficial interests in Senior Notes
of the First Series owned by qualified institutional buyers
(as defined in Rule 144A under the Securities Act)("QIBs")
or sold to QIBs in reliance upon Rule 144A under the
Securities Act will be represented by a global certificate
registered in the name of Cede & Co., as registered owner
and as nominee for DTC; beneficial interests in Senior Notes
of the First Series sold to foreign purchasers pursuant to
Regulation S under the Securities Act will be evidenced by
one or more separate global certificates (each the
"Regulation S Global Certificate") and will be registered in
the name of Cede & Co., as registered owner and as nominee
for DTC for the accounts of Euroclear and Cedel Bank; prior
to the 40th day after the date of initial issuance of the
Senior Notes of the First Series, beneficial interests in
the Regulation S Global Certificate may be held only through
Euroclear or Cedel Bank; Senior Notes of the First Series
acquired by Institutional Accredited Investors (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
("IAIs") and other eligible transferees, who are not QIBs
and who are not foreign purchasers pursuant to Regulation S
under the Securities Act, will be in certificated form. The
Trustee, the Security Registrar and the Company will have no
responsibility under the Indenture for transfers of
beneficial interests in the Senior Notes of the First and
Second Series.
In connection with any transfer of Senior Notes of the First
Series, the Trustee, the Security Registrar and the Company
shall be under no duty to inquire into, may conclusively
presume the correctness of, and shall be fully protected in
relying upon the certificates and other information (in the
forms attached hereto as Exhibit A, for use in connection
with the transfer of the Senior Notes of the First Series in
certificated form, or Exhibit C, for use in connection with
the transfer of beneficial interests in one global
certificate to another global certificate or to a Senior
Note of the First Series in certificated form, or otherwise)
received from the Holders and any transferees of any Senior
Notes of the First Series regarding the validity, legality
and due authorization of any such transfer, the eligibility
of the transferee to receive such Security and any other
facts and circumstances related to such transfer;
11. No service charge shall be made for the registration of
transfer or exchange of the Senior Notes of the First and
Second Series; provided, however, that the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
with the exchange or transfer;
12. If the Company shall make any deposit of money and/or
Eligible Obligations with respect to any Senior Notes of the
First or Second Series, or any portion of the principal
amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's
Certificate described in clause (z) in the first paragraph
of said Section 701 unless the Company shall also deliver to
the Trustee,together with such Officer'sCertificate, either:
(A) an instrument wherein the Company, notwithstanding
the satisfaction and discharge of its indebtedness in
respect of the Senior Notes of the First or Second Series,
shall assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee or
Paying Agent such additional sums of money, if any, or
additional Eligible Obligations (meeting the requirements of
Section 701), if any, or any combination thereof, at such
time or times, as shall be necessary, together with the
money and/or Eligible Obligations theretofore so deposited,
to pay when due the principal of and premium, if any, and
interest due and to become due on such Senior Notes of the
First or Second Series or portions thereof, all in
accordance with and subject to the provisions of said
Section 701; provided, however, that such instrument may
state that the obligation of the Company to make additional
deposits as aforesaid shall be subject to the delivery to
the Company by the Trustee of a notice asserting the
deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a
result of a change in law occurring after the date of this
certificate, the Holders of such Senior Notes of the First
or Second Series, or portions of the principal amount
thereof, will not recognize income, gain or loss for United
States federal income tax purposes as a result of the
satisfaction and discharge of the Company's indebtedness in
respect thereof and will be subject to United States federal
income tax on the same amounts, at the same times and in the
same manner as if such satisfaction and discharge had not
been effected.
13. The obligations of the Company under the Senior Notes of the
First and Second Series and under the Indenture to the
extent related to such series will be subject to assignment
by the Company to and assumption by a wholly owned
Subsidiary of the Company at any time, as provided in the
form set forth in Exhibit A hereto with respect to the
Senior Notes of the First Series, and in the form set forth
in Exhibit B hereto in the respect to the Senior Notes of
the Second Series; provided, however, that in the absence of
an Insurer Default (defined below) and so long as the
Insurance Policy (defined below) remains in effect, the
Insurer (defined below) must consent to such assignment,
which consent shall not be unreasonably withheld.
In the event that such Subsidiary assumes the obligations
under the Senior Notes of the First and Second Series, the
Company will unconditionally guarantee payment of the Senior
Notes of the First and Second Series and will execute a
guarantee in form and substance satisfactory to the Trustee.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of
such assuming Subsidiary under the Senior Notes of the First
and Second Series and under the Indenture, including,
without limitation, payment, as and when due, of the
principal of, premium, if any, and interest on, the Senior
Notes of the First and Second Series. Other than the
obligation to make payments of the principal of, premium, if
any, and interest on, the Senior Notes of the First and
Second Series, the Company will be released and discharged
from all of its other obligations under the Indenture. The
foregoing assignment and assumption shall be in compliance
with applicable law including the Securities Act.
14. The Senior Notes of the First Series shall have such other
terms and provisions as are provided in the form set forth
in Exhibit A hereto, and shall be issued in substantially
such form; the Senior Notes of the Second Series shall have
such other terms and provisions as are provided in the form
set forth in Exhibit B hereto, and shall be issued in
substantially such form.
15. Payment of the principal of and interest on the Senior Notes
of the First and Second Series when due will be guaranteed
by a financial guaranty insurance policy (the "Insurance
Policy") by MBIA Insurance Corporation (the "Insurer"). In
the absence of an Insurer Default (defined below) and so
long as the Insurance Policy remains in effect, the
following terms will be applicable to the Senior Notes of
the First and Second Series.
(A) Notice of Certain Redemptions. The Trustee shall
notify the Insurer in the manner required by Subsection (H)
hereof of any redemption of the Senior Notes of the First or
Second Series pursuant to the provisions of Section 404 of
the Indenture, of which the Trustee has actual knowledge.
(B) Notice of Default; Notices of Claims under
Insurance Policy.
(a) Events of Default. The Trustee shall give
the Insurer a notice of any Event of Default with
respect to the Senior Notes of the First or Second
Series pursuant to the provisions of Section 902 of the
Indenture, of which the Trustee has actual knowledge.
(b) Claims Under Insurance Policy
(i) If the Paying Agent has been notified by
the Company that the Company is unable to pay all
principal and interest on the Senior Notes of the
First or Second Series on any date on which
payment of principal of or interest on the
Securities of the First or Second Series is due,
the Paying Agent shall immediately notify the
Insurer or its designee by telephone or telegraph,
confirmed in writing by registered or certified
mail, of the amount of the deficiency.
(ii) If insufficient funds are received by
the Paying Agent in whole or in part on the
relevant Interest Payment Date or principal
payment date, the Paying Agent shall notify the
Insurer or its designee.
(iii) In addition, if the Paying Agent has
received written notification that any Holders
have been required to disgorge payments of
principal or interest on Senior Notes of the First
or Second Series to the Company or the trustee in
bankruptcy for creditors or others pursuant to a
final judgment by a court of competent
jurisdiction or that such payment constitutes a
voidable preference to such Holders within the
meaning of any applicable bankruptcy laws, then
the Paying Agent shall notify the Insurer or its
designee of such fact by telephone or telegraphic
notice, confirmed in writing by registered or
certified mail.
(iv) The Paying Agent is hereby irrevocably
designated, appointed, directed and authorized to
act as attorney-in-fact for the Holders as
follows:
(x) If and to the extent there is a
deficiency in amounts required to pay
interest on the Bonds, the Paying Agent shall
(1) execute and deliver to State Street Bank
and Trust Company, N.A., or its successors
under the Insurance Policy (the "Insurance
Paying Agent"), in form satisfactory to the
Insurance Paying Agent, an instrument
appointing the Insurer as agent for such
Holders in any legal proceeding related to
the payment of such interest and an
assignment to the Insurer of any claims for
interest to which such deficiency relates and
which are paid by the Insurer, (2) receive as
designee of the respective Holders (and not
as Paying Agent) in accordance with the tenor
of the Insurance Policy payment from the
Insurance Paying Agent with respect to the
claims for interest so assigned and (3)
disburse the same to such respective Holders;
and
(y) If and to the extent there is a
deficiency in amounts required to pay
principal of the Senior Notes of the First or
Second Series, the Paying Agent shall (1)
execute and deliver to the Insurance Paying
Agent, in form satisfactory to the Insurance
Paying Agent, an instrument appointing the
Insurer as agent for such Holders in any
legal proceeding related to the payment of
such principal and an assignment to the
Insurer of any of the Senior Notes of the
First or Second Series surrendered to the
Insurance Paying Agent of so much of the
principal amount thereof as has not
previously been paid or for which moneys are
not held by the Paying Agent and available
for such payment (but such assignment shall
be delivered only if payment from the
Insurance Paying Agent is received), (2)
receive as designee of the respective Holders
(and not as Paying Agent) in accordance with
the tenor of the Insurance Policy payment
from the Insurance Paying Agent with respect
to the claims for principal so assigned and
(3) disburse the same to such respective
Holders.
(v) Irrespective of whether any such
assignment is executed and delivered, the Company
and the Paying Agent hereby agree for the benefit
of the Insurer that:
(x) to the extent the Insurer makes
payments, directly or indirectly (as by
paying through the Paying Agent), on account
of principal of or interest on the Senior
Notes of the First or Second Series, the
Insurer will be subrogated to the rights of
such Holders to receive the amount of such
principal and interest from the Company, with
interest thereon as provided in the Indenture
and the Senior Notes of the First or Second
Series; and
(y) the Company will accordingly pay to
the Insurer the amount of such principal and
interest (including reimbursement of any such
payment of principal and interest recovered
from any Holder pursuant to a final judgment
by a court of competent jurisdiction that
such payment constitutes an avoidable
preference to such Holder within the meaning
of any applicable bankruptcy law, which
principal and interest shall be deemed past
due and not to have been paid) paid by the
Insurer to any Holders, and will otherwise
treat the Insurer as the owner of such rights
to the amount of such principal and interest.
(C) Deemed Holder for Default and Remedies. For all
purposes of Article Eight of the Indenture other than
Sections 802 and 808, the Insurer shall be deemed to be the
sole Holder of the Senior Notes of the First and Second
Series. Notwithstanding Section 802, without the written
consent of the Insurer, which consent shall not be
unreasonably withheld, (a) upon the occurrence of an Event
of Default, the principal of the Senior Notes of the First
and Second Series then Outstanding and interest thereon
shall not become immediately due and payable and (b) the
Trustee may not waive a default or annul a declaration that
the principal of the Senior Notes of the First and Second
Series and interest thereon are immediately due and payable.
(D) Supplemental Indentures. Anything in the
Indenture to the contrary notwithstanding, no consent or
approval of any Holder of Senior Notes of the First or
Second Series to any Supplemental Indenture pursuant to
Section 1202 of the Indenture shall become effective without
the written consent of the Insurer, which consent shall not
be unreasonably withheld. In the case of any Supplemental
Indenture requiring the consent of Holders of Senior Notes
of the First or Second Series, at least 15 Business Days
prior to executing such proposed Supplemental Indenture, the
Trustee shall give notice of such execution together with a
copy of such Supplemental Indenture to the Insurer. The
Trustee shall give notice to the Insurer of any Supplemental
Indenture not requiring the consent of Holders.
(E) Successor Trustees. The Trustee shall give
written notice of its resignation in accordance with Section
910 of the Indenture to the Insurer at the same time such
notice is given to the Company. The Company shall give
notice to the Insurer of its removal of the Trustee and of
its appointment of a successor Trustee in the event of a
resignation or removal of the Trustee, all in accordance
with Subsection H hereof.
(F) Bond Insurer as Party in Interest. The Insurer
shall be included as a party in interest with respect to the
Senior Notes of the First and Second Series under the
Indenture.
(G) Access to the Register. Upon the occurrence of an
Event of Default which would require the Insurer to make
payments of principal of or interest on the Senior Notes of
the First and Second Series in accordance with the Insurance
Policy, the Paying Agent shall provide access to the books
kept for the registration of transfer of Senior Notes of
such First or Second Series to the Insurer, the Insurance
Paying Agent or other designee of the Insurer.
(H) Notices to Insurer. All notices, consents or
other communications required or permitted to be given to
the Insurer under the Indenture shall be deemed sufficiently
given if given in writing, mailed by registered or certified
mail, postage prepaid and addressed to the following
address: MBIA Insurance Corporation, 113 King Street,
Armonk, New York 10504 Attention: Surveillance Department.
The Insurer may from time to time give notice in writing to
all parties to the Indenture designating a different address
or addresses for notice thereunder.
(I) Termination of Special Insurance Requirements.
The provisions of this Section 15 (other than the first
sentence hereof) shall apply only so long as there is no
Insurer Default (defined below).
(J) Confirmation of Application of Term "Outstanding"
to Senior Notes of the First and Second Series paid by
Insurer, Recordation of Rights of Subrogation in
Registration Books.
(a) Notwithstanding anything herein to the
contrary, in the event that the principal and/or
interest due on the Senior Notes of the First or Second
Series shall be paid by the Insurer pursuant to the
Insurance Policy, such Senior Notes of the First or
Second Series (i) shall continue to be Outstanding
within the meaning of the Indenture for all purposes;
(ii) shall not be considered defeased, otherwise
satisfied or paid by the Company, and (iii) the
assignment and pledge of the Indenture and all
covenants, agreements and other obligations of the
Company to the registered owners shall continue to
exist and shall run to the benefit of the Insurer, and
the Insurer shall be subrogated to the rights of such
registered owners to the extent of each such payment.
(b) To assist the Trustee in allocating available
money held under the Indenture, (i) in the case of
subrogation as to claims for past due interest, the
Security Registrar shall note the Insurer's rights as
subrogee on the registration books of the Company
maintained by the Security Registrar upon receipt from
the Insurer of proof of the payment of interest thereon
to the registered owners of the Senior Notes of the
First or Second Series, and (ii) in the case of
subrogation as to claims for past due principal, the
Trustee shall note the Insurer's rights as subrogee on
the registration books of the Company maintained by the
Security Registrar upon surrender of the Senior Notes
of the First or Second Series by the registered owners
thereof together with proof of the payment of principal
thereof.
"Insurer Default" means any of the following events:
(A) The occurrence and continuance of one or more of
the following events: (a) the issuance of an order of
rehabilitation, liquidation or dissolution of the Insurer;
(b) the commencement by the Insurer of a voluntary case or
other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
in effect including, without limitation, the appointment of
a trustee, receiver, liquidator, custodian or other similar
official for itself or any substantial part of its property;
(c) the consent of the Insurer to or the acquiescence by the
Insurer in any case or proceeding described in the preceding
clause (b) that is commenced against it; (d) the making by
the Insurer of an assignment for the benefit of creditors;
(e) the failure of the Insurer or the admission by the
Insurer in writing of its inability to generally pay its
debts or claims as they become due; (f) the initiation by
the Insurer of any actions to authorize any of the
foregoing; (g) the commencement of an involuntary case or
other proceeding against the Insurer seeking liquidation,
reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case remaining undismissed and unstayed for
a period of 60 days; or (h) the entering of an order for
relief against the Insurer under the federal bankruptcy laws
as now or hereafter in after;
(B) The Insurer shall fail, wholly or partially, to
make a payment when and as required under the provisions of
the Insurance Policy (including without limitation,
principal of and interest on the Senior Notes of the First
or Second Series);
(C) The Insurer (or any Person acting on behalf of the
Insurer) purports to surrender, cancel, terminate or amend
or modify in any material respect, the Insurance Policy,
without each Holder's prior written consent; or
(D) A court of competent jurisdiction enters a final
nonappealable judgment that the Insurance Policy is not
valid and binding or enforceable against the Insurer.
16. The undersigned has read all of the covenants and
conditions contained in the Indenture relating to the
issuance of the Senior Notes of the First and Second
Series and the definitions in the Indenture relating
thereto and in respect of which this certificate is
made;
17. The statements contained in this certificate are based
upon the familiarity of the undersigned with the
Indenture, the documents accompanying this certificate,
and upon discussions by the undersigned with officers
and employees of the Company familiar with the matters
set forth herein;
18. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to enable
him to express an informed opinion whether or not such
covenants and conditions have been complied with; and
19. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including
any covenants compliance with which constitutes a
condition precedent) to the authentication and delivery
of the Senior Notes of the First and Second Series
requested in the accompanying Company Order have been
complied with.
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this 10th day of October, 1997.
/s/ Robert S. Shapard
------------------------------
Treasurer
<PAGE>
EXHIBIT A
[depository legend]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
[non-registration legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE
COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED OTHER THAN (1) TO THE COMPANY, (2) IN A
TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT, (3) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY), OR (5) TO AN INSTITUTION THAT IS
AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM
ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN
INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT
WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND
OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT
ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS
(1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF, OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF
RULE 902 UNDER, REGULATION S UNDER THE SECURITIES ACT."
[registration rights legend]
The Holder of this Security, by acceptance hereof, will be
deemed to have agreed to be bound by the provisions of the
Registration Rights Agreement dated October 10, 1997, between the
Company and the initial purchasers of this Security.
NO. CUSIP NO.
--------------- ----------
[FORM OF FACE OF SENIOR NOTE]
TEXAS UTILITIES COMPANY
6.375% SERIES B SENIOR NOTES DUE 2004
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State Texas (herein referred to as
the "Company", which term includes any successor Person under the
Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on October 1, 2004, and to pay interest on said principal
sum semi-annually on April 1 and October 1 of each year (each an
Interest Payment Date) at the rate of 6.375% per annum until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from October 10,
1997, to the first Interest Payment Date, and thereafter will
accrue from the last Interest Payment Date to which interest has
been paid or duly provided for. In the event that any Interest
Payment Date is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of such delay) with the same force and effect
as if made on the Interest Payment Date. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the 15th day of the
calendar month next preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
--------------------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series B), dated as of October 1,
1997 (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on October 10, 1997
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $175,000,000.
REDEMPTION
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest hereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 5 basis points,
plus (b) accrued interest on the principal amount hereof to the
Redemption Date.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers, Inc., Citicorp Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and their respective
successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest will cease to accrue on the Securities
of this series or portions thereof called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the Senior
Notes to be redeemed shall equal the sum of (a) the greater of
(i) 100% of the principal amount of such Senior Notes, and (ii)
the sum of the present values of the remaining scheduled payments
of principal and interest thereon from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture) plus 5 basis points plus
accrued interest on the principal amount hereof to the Redemption
Date."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $5,000 and in
integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement
and a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the
extent related to such series primary obligations of such
Subsidiary, substituting such Subsidiary of the Company for
the Company in the form of the Securities of this series
and in provisions of the Indenture to the extent related to
such series and releasing and discharging the Company from
its obligations under the Securities of this series and
the Indenture to the extent related to such series; and
(b) the Trustee shall have received (i) an executed
counterpart of such assumption agreement and supplemental
indenture; (ii) evidence satisfactory to the Trustee and the
Company that all necessary authorizations, consents, orders,
approvals, waivers, filings and declarations of or with, Federal,
state, county, municipal, regional or other governmental
authorities, agencies or boards (collectively, "Governmental
Actions") relating to such assumption have been duly obtained and
are in full force and effect, (iii) evidence satisfactory to the
Trustee that any security interest intended to be created by the
Indenture is not in any material way adversely affected or
impaired by any of the agreements or transactions relating to
such assumption and (iv) an Opinion of Counsel for such
Subsidiary, reasonably satisfactory in substance, scope and form
to the Trustee and the Company, to the effect that (A) the
supplemental indenture evidencing such assumption has been duly
authorized, executed and delivered by such Subsidiary, (B) the
execution and delivery by such Subsidiary of such supplemental
indenture and the consummation of the transactions contemplated
thereby do not contravene any provision of law or any
governmental rule applicable to such Subsidiary or any provision
of such Subsidiary's charter documents or by-laws and do not
contravene any provision of, or constitute a default under, or
result in the creation or imposition of any lien upon any of such
Subsidiary's properties or assets under any indenture, mortgage,
contract or other agreement to which such Subsidiary is a party
or by which such Subsidiary or any of its properties may be bound
or affected, (C) all necessary Governmental Actions relating to
such assumption have been duly obtained and are in full force and
effect and (D) such agreement and supplemental indenture
constitute the legal, valid and binding obligations of such
Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws at the time in effect affecting the rights of
creditors generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee, and, other than the obligation to
make payments of the principal of, premium, if any, and interest
on, the Securities of this series, the Company shall be released
and discharged from all other obligations under the Indenture.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of such
assuming Subsidiary under the Securities of this series and under
the Indenture, including, without limitation, payment, as and
when due, of the principal of, premium, if any, and interest on,
the Securities of this series.
So long as the Insurance Policy described hereafter
remains in effect and in the absence of an Insurer Default,
certain rights of the Holders of the Securities of this series
are limited as described in the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
[CERTIFICATE OF TRANSFER]
6.375% SERIES B SENIOR NOTES DUE 2004
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
-------------------------------
------------------------------- -------------------------------
Name and address of assignee
must be printed or typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocable
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
The undersigned certifies that said Security is being resold,
pledged or otherwise transferred as follows: (check one)
[ ] to the Company;
[ ] to a Person whom the undersigned reasonably believes is a
qualified institutional buyer within the meaning of Rule
144A under the Securities Act of 1933, as amended (the
"Securities Act") purchasing for its own account or for the
account of a qualified institutional buyer to whom notice is
given that the resale, pledge or other transfer is being
made in reliance on Rule 144A;
[ ] in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act;
[ ] to an institution that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is acquiring this Security for
investment purposes and not for distribution; (attach a copy
of an Investment Letter For Institutional Accredited
Investors in the form annexed signed by an authorized
officer of the transferee)
[ ] as otherwise permitted by the non-registration legend
appearing on this Security; or
[ ] as otherwise agreed by the Company, confirmed in writing to
the Trustee, as follows: [describe]
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
<PAGE>
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a
policy containing the following provisions, such policy being on
file at The Bank of New York, New York, New York.
The Insurer, in consideration of the payment of the premium
and subject to the terms of this policy, hereby unconditionally
and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete
payment required to be made by or on behalf of the Company to The
Bank of New York or its successor (the "Paying Agent") of an
amount equal to (i) the principal of (either at the stated
maturity or by an advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on, the Obligations (as that
term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from
default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times
as such payments of principal would have been due had there not
been any such acceleration); and (ii) the reimbursement of any
such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations" shall mean:
$175,000,000
Texas Utilities Company
6.375% Series B Senior Notes due 2004
Upon receipt of telephonic or telegraphic notice, such
notice subsequently confirmed in writing by registered or
certified mail, or upon receipt of written notice by registered
or certified mail, by the Insurer from the Paying Agent or any
owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made,the
Insurer on the due date of such payment or within one Business
Day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or
its successor, sufficient for the payment of any such Insured
Amounts which are then due. Upon presentment and surrender of
such Obligations or presentment of such other proof of ownership
of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to
payment of Insured Amounts on the Obligations, such instruments
being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the
Insured Amounts due on such Obligations, less any amount held by
the Paying Agent for the payment of such Insured Amounts and
legally available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein, the term "owner" shall mean the registered
owner of any Obligation as indicated in the books maintained by
the Security Registrar, Paying Agent, the Company, or any
designee of the Company for such purpose. The term owner shall
not include the Company or any party whose agreement with the
Company constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the
Insurer at its offices located at 113 King Street, Armonk, New
York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium
on this policy is not refundable for any reason including the
payment prior to maturity of the Obligations.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION. In the event the
Insurer is unable to fulfill its contractual obligation under
this policy or contract or application or certificate or evidence
of coverage, the policyholder or certificateholder is not
protected by an insurance guaranty fund or other solvency
protection arrangement.
<PAGE>
EXHIBIT B
[depository legend]
[Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
NO. CUSIP NO.
--------------- ----------
[FORM OF FACE OF EXCHANGE SENIOR NOTE]
TEXAS UTILITIES COMPANY
6.375% SERIES B EXCHANGE SENIOR NOTES DUE 2004
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State Texas (herein referred to as
the "Company", which term includes any successor Person under the
Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on October 1, 2004, and to pay interest on said principal
sum semi-annually on April 1 and October 1 of each year (each an
Interest Payment Date) at the rate of 6.375% per annum until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from ,
---------------
to the first Interest Payment Date, and thereafter will accrue
from the last Interest Payment Date to which interest has been
paid or duly provided for. In the event that any Interest Payment
Date is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of such delay) with the same force and effect as if made
on the Interest Payment Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the 15th
day of the calendar month next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
-------------------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF EXCHANGE SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series B), dated as of October 1,
1997 (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on October 10, 1997
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $175,000,000.
REDEMPTION
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest hereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 5 basis points,
plus (b) accrued interest on the principal amount hereof to the
Redemption Date.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers, Inc., Citicorp Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and their respective
successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest will cease to accrue on the Securities
of this series or portions thereof called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the Senior
Notes to be redeemed shall equal the sum of (a) the greater of
(i) 100% of the principal amount of such Senior Notes, and (ii)
the sum of the present values of the remaining scheduled payments
of principal and interest thereon from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture) plus 5 basis points plus
accrued interest on the principal amount hereof to the Redemption
Date."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $5,000 and in
integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement
and a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the
extent related to such series primary obligations of such
Subsidiary, substituting such Subsidiary of the Company for
the Company in the form of the Securities of this series and
in provisions of the Indenture to the extent related to such
series and releasing and discharging the Company from its
obligations under the Securities of this series and the
Indenture to the extent related to such series; and (b) the
Trustee shall have received (i) an executed counterpart of
such assumption agreement and supplemental indenture;
(ii) evidence satisfactory to the Trustee and the Company
that all necessary authorizations, consents, orders, approvals,
waivers, filings and declarations of or with, Federal, state,
county, municipal, regional or other governmental
authorities, agencies or boards (collectively, "Governmental
Actions") relating to such assumption have been duly obtained and
are in full force and effect, (iii) evidence satisfactory to the
Trustee that any security interest intended to be created by the
Indenture is not in any material way adversely affected or
impaired by any of the agreements or transactions relating to
such assumption and (iv) an Opinion of Counsel for such
Subsidiary, reasonably satisfactory in substance, scope and form
to the Trustee and the Company, to the effect that (A) the
supplemental indenture evidencing such assumption has been duly
authorized, executed and delivered by such Subsidiary, (B) the
execution and delivery by such Subsidiary of such supplemental
indenture and the consummation of the transactions contemplated
thereby do not contravene any provision of law or any
governmental rule applicable to such Subsidiary or any provision
of such Subsidiary's charter documents or by-laws and do not
contravene any provision of, or constitute a default under, or
result in the creation or imposition of any lien upon any of such
Subsidiary's properties or assets under any indenture, mortgage,
contract or other agreement to which such Subsidiary is a party
or by which such Subsidiary or any of its properties may be bound
or affected, (C) all necessary Governmental Actions relating to
such assumption have been duly obtained and are in full force and
effect and (D) such agreement and supplemental indenture
constitute the legal, valid and binding obligations of such
Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws at the time in effect affecting the rights of
creditors generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee, and, other than the obligation to
make payments of the principal of, premium, if any, and interest
on, the Securities of this series, the Company shall be released
and discharged from all other obligations under the Indenture.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of such
assuming Subsidiary under the Securities of this series and under
the Indenture, including, without limitation, payment, as and
when due, of the principal of, premium, if any, and interest on,
the Securities of this series.
So long as the Insurance Policy described hereafter
remains in effect and in the absence of an Insurer Default,
certain rights of the Holders of the Securities of this series
are limited as described in the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
---------------------------------
--------------------------------- -----------------------------
Name and address of assignee
must be printed or typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocable
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
<PAGE>
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a
policy containing the following provisions, such policy being on
file at The Bank of New York, New York, New York.
The Insurer, in consideration of the payment of the premium
and subject to the terms of this policy, hereby unconditionally
and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete
payment required to be made by or on behalf of the Company to The
Bank of New York or its successor (the "Paying Agent") of an
amount equal to (i) the principal of (either at the stated
maturity or by an advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on, the Obligations (as that
term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from
default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times
as such payments of principal would have been due had there not
been any such acceleration); and (ii) the reimbursement of any
such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations" shall mean:
$175,000,000
Texas Utilities Company
6.375% Series B Senior Notes due 2004
Upon receipt of telephonic or telegraphic notice, such
notice subsequently confirmed in writing by registered or
certified mail, or upon receipt of written notice by registered
or certified mail, by the Insurer from the Paying Agent or any
owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made,the
Insurer on the due date of such payment or within one Business
Day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or
its successor, sufficient for the payment of any such Insured
Amounts which are then due. Upon presentment and surrender of
such Obligations or presentment of such other proof of ownership
of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to
payment of Insured Amounts on the Obligations, such instruments
being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the
Insured Amounts due on such Obligations, less any amount held by
the Paying Agent for the payment of such Insured Amounts and
legally available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein, the term "owner" shall mean the registered
owner of any Obligation as indicated in the books maintained by
the Security Registrar, Paying Agent, the Company, or any
designee of the Company for such purpose. The term owner shall
not include the Company or any party whose agreement with the
Company constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the
Insurer at its offices located at 113 King Street, Armonk, New
York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium
on this policy is not refundable for any reason including the
payment prior to maturity of the Obligations.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION. In the event the
Insurer is unable to fulfill its contractual obligation under
this policy or contract or application or certificate or evidence
of coverage, the policyholder or certificateholder is not
protected by an insurance guaranty fund or other solvency
protection arrangement.
<PAGE>
EXHIBIT C
[CERTIFICATE OF TRANSFER]
TEXAS UTILITIES COMPANY
6.375% SERIES B SENIOR NOTES DUE 2004
PRINCIPAL AMOUNT: $
---------------
FOR VALUE RECEIVED, the undersigned sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
----------------------------------
---------------------------------- --------------------------
Name and address of
assignee must be printed
or typewritten.
-----------------------------------------------------------------
the referenced Security of the Company and does hereby
irrevocable constitute and appoint
----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
The undersigned certifies that said Security is being resold,
pledged or otherwise transferred as follows: (check one)
[ ] to the Company;
[ ] to a Person whom the undersigned reasonably believes is a
qualified institutional buyer within the meaning of Rule
144A under the Securities Act of 1933, as amended (the
"Securities Act") purchasing for its own account or for the
account of a qualified institutional buyer to whom notice is
given that the resale, pledge or other transfer is being
made in reliance on Rule 144A;
[ ] in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act;
[ ] to an institution that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is acquiring this Security for
investment purposes and not for distribution; (attach a copy
of an Investment Letter For Institutional Accredited
Investors in the form annexed signed by an authorized
officer of the transferee)
[ ] as otherwise permitted by the non-registration legend
appearing on this Security; or
[ ] as otherwise agreed by the Company, confirmed in writing to
the Trustee, as follows: [describe]
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
All terms used in this certificate which are defined in
the Indenture pursuant to which said Security was issued shall
have the meanings assigned to them in the Indenture.
<PAGE>
FORM OF ACCREDITED INVESTOR LETTER
[Transferor Name and Address]
Ladies and Gentlemen:
In connection with our proposed purchase of % Series
Notes due (the "Senior Notes") issued by Texas
Utilities Company ("Issuer"), we confirm that:
1. We have received a copy of the Offering
Memorandum (the "Offering Memorandum") relating to the
Senior Notes and such other information as we deem necessary
in order to make our investment decision. We acknowledge
that we have read and agree to the matters stated under the
caption NOTICE TO INVESTORS in such Offering Memorandum, and
the restrictions on duplication or circulation of, or
disclosure relating to, such Offering Memorandum.
2. We understand that any subsequent transfer of the
Senior Notes is subject to certain restrictions and
conditions set forth in the Indenture relating to Senior
Notes (the "Indenture") and that any subsequent transfer of
the Senior Notes is subject to certain restrictions and
conditions set forth under NOTICE TO INVESTORS in the
Offering Memorandum and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the
Senior Notes except in compliance with such restrictions and
conditions and the Securities Act of 1933, as amended
("Securities Act").
3. We understand that the offer and sale of the
Senior Notes have not been registered under the Securities
Act, and that the Senior Notes may not be offered or sold
except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we sell any Senior
Notes, we will do so only (A) to the Company, (B) in
accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to
an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnishes to the Trustee (as
defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions
on transfer of the Senior Notes (substantially in the form
of this letter) and, if such transfer is in respect of an
aggregate principal amount of Senior Notes at the time of
transfer of less than $100,000, an opinion of counsel
acceptable to the Issuer that such transfer is in compliance
with the Securities Act, (D) outside the United States in
accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act
(if available), or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to
provide to any person purchasing any of the Senior Notes
from us a notice advising such purchaser that resales of the
Senior Notes are restricted as stated herein.
4. We understand that, on any proposed resale of any
Senior Notes, we will be required to furnish to the Trustee
and Issuer such certifications, legal opinions and other
information as the Trustee and Issuer may reasonably require
to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the
Senior Notes purchased by us will bear a legend to the
foregoing effect.
5. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) and have such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment
in the Senior Notes, and we and any accounts for which are
acting are each able to bear the economic risk of our or its
investment.
6. We are acquiring the Senior Notes purchased by us
for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each
of which we exercise sole investment discretion.
You, the Issuer and the Trustee are entitled to rely upon
this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters
covered hereby.
Very truly yours,
By:____________________
Name:
Title:
[depository legend]
[Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
NO. CUSIP NO.
--------------- ----------
[FORM OF FACE OF EXCHANGE SENIOR NOTE]
TEXAS UTILITIES COMPANY
6.20% SERIES A EXCHANGE SENIOR NOTES DUE 2002
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State Texas (herein referred to as
the "Company", which term includes any successor Person under the
Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on October 1, 2002, and to pay interest on said principal
sum semi-annually on April 1 and October 1 of each year (each an
Interest Payment Date) at the rate of 6.20% per annum until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from ,
--------------
to the first Interest Payment Date, and thereafter will accrue
from the last Interest Payment Date to which interest has been
paid or duly provided for. In the event that any Interest Payment
Date is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of such delay) with the same force and effect as if made
on the Interest Payment Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the 15th
day of the calendar month next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
---------------------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF EXCHANGE SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series A), dated as of October 1,
1997 (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on October 10, 1997
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $125,000,000.
REDEMPTION
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest hereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 5 basis points,
plus (b) accrued interest on the principal amount hereof to the
Redemption Date.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers, Inc., Citicorp Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and their respective
successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest will cease to accrue on the Securities
of this series or portions thereof called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the Senior
Notes to be redeemed shall equal the sum of (a) the greater of
(i) 100% of the principal amount of such Senior Notes, and (ii)
the sum of the present values of the remaining scheduled payments
of principal and interest thereon from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture) plus 5 basis points plus
accrued interest on the principal amount hereof to the Redemption
Date."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $5,000 and in
integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement
and a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the
extent related to such series primary obligations of such
Subsidiary, substituting such Subsidiary of the Company for
the Company in the form of the Securities of this series and
in provisions of the Indenture to the extent related to such
series and releasing and discharging the Company from its
obligations under the Securities of this series and the
Indenture to the extent related to such series; and (b) the
Trustee shall have received (i) an executed counterpart of
such assumption agreement and supplemental indenture; (ii)
evidence satisfactory to the Trustee and the Company that all
necessary authorizations, consents, orders, approvals, waivers,
filings and declarations of or with, Federal, state, county,
municipal, regional or other governmental authorities,
agencies or boards (collectively, "Governmental Actions")
relating to such assumption have been duly obtained and are in
full force and effect, (iii) evidence satisfactory to the Trustee
that any security interest intended to be created by the Indenture
is not in any material way adversely affected or impaired
by any of the agreements or transactions relating to such
assumption and (iv) an Opinion of Counsel for such
Subsidiary, reasonably satisfactory in substance, scope and form
to the Trustee and the Company, to the effect that (A) the
supplemental indenture evidencing such assumption has been duly
authorized, executed and delivered by such Subsidiary, (B) the
execution and delivery by such Subsidiary of such supplemental
indenture and the consummation of the transactions contemplated
thereby do not contravene any provision of law or any
governmental rule applicable to such Subsidiary or any provision
of such Subsidiary's charter documents or by-laws and do not
contravene any provision of, or constitute a default under, or
result in the creation or imposition of any lien upon any of such
Subsidiary's properties or assets under any indenture, mortgage,
contract or other agreement to which such Subsidiary is a party
or by which such Subsidiary or any of its properties may be bound
or affected, (C) all necessary Governmental Actions relating to
such assumption have been duly obtained and are in full force and
effect and (D) such agreement and supplemental indenture
constitute the legal, valid and binding obligations of such
Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws at the time in effect affecting the rights of
creditors generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee, and, other than the obligation to
make payments of the principal of, premium, if any, and interest
on, the Securities of this series, the Company shall be released
and discharged from all other obligations under the Indenture.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of such
assuming Subsidiary under the Securities of this series and under
the Indenture, including, without limitation, payment, as and
when due, of the principal of, premium, if any, and interest on,
the Securities of this series.
So long as the Insurance Policy described hereafter
remains in effect and in the absence of an Insurer Default,
certain rights of the Holders of the Securities of this series
are limited as described in the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
FOR VALUE RECEIVED, the undersigned sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
-----------------------------
----------------------------- ------------------------------
Name and address of assignee
must be printed or typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocable
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
<PAGE>
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a
policy containing the following provisions, such policy being on
file at The Bank of New York, New York, New York.
The Insurer, in consideration of the payment of the premium
and subject to the terms of this policy, hereby unconditionally
and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete
payment required to be made by or on behalf of the Company to The
Bank of New York or its successor (the "Paying Agent") of an
amount equal to (i) the principal of (either at the stated
maturity or by an advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on, the Obligations (as that
term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from
default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times
as such payments of principal would have been due had there not
been any such acceleration); and (ii) the reimbursement of any
such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations" shall mean:
$125,000,000
Texas Utilities Company
6.20% Series A Senior Notes due 2002
Upon receipt of telephonic or telegraphic notice, such
notice subsequently confirmed in writing by registered or
certified mail, or upon receipt of written notice by registered
or certified mail, by the Insurer from the Paying Agent or any
owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made,the
Insurer on the due date of such payment or within one Business
Day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or
its successor, sufficient for the payment of any such Insured
Amounts which are then due. Upon presentment and surrender of
such Obligations or presentment of such other proof of ownership
of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to
payment of Insured Amounts on the Obligations, such instruments
being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the
Insured Amounts due on such Obligations, less any amount held by
the Paying Agent for the payment of such Insured Amounts and
legally available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein, the term "owner" shall mean the registered
owner of any Obligation as indicated in the books maintained by
the Security Registrar, Paying Agent, the Company, or any
designee of the Company for such purpose. The term owner shall
not include the Company or any party whose agreement with the
Company constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the
Insurer at its offices located at 113 King Street, Armonk, New
York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium
on this policy is not refundable for any reason including the
payment prior to maturity of the Obligations.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION. In the event the
Insurer is unable to fulfill its contractual obligation under
this policy or contract or application or certificate or evidence
of coverage, the policyholder or certificateholder is not
protected by an insurance guaranty fund or other solvency
protection arrangement.
[depository legend]
[Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
NO. CUSIP NO.
--------------- ----------
[FORM OF FACE OF EXCHANGE SENIOR NOTE]
TEXAS UTILITIES COMPANY
6.375% SERIES B EXCHANGE SENIOR NOTES DUE 2004
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State Texas (herein referred to as
the "Company", which term includes any successor Person under the
Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on October 1, 2004, and to pay interest on said principal
sum semi-annually on April 1 and October 1 of each year (each an
Interest Payment Date) at the rate of 6.375% per annum until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from ,
---------------
to the first Interest Payment Date, and thereafter will accrue
from the last Interest Payment Date to which interest has been
paid or duly provided for. In the event that any Interest Payment
Date is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of such delay) with the same force and effect as if made
on the Interest Payment Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the 15th
day of the calendar month next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
-------------------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF EXCHANGE SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series B), dated as of October 1,
1997 (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on October 10, 1997
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $175,000,000.
REDEMPTION
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest hereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 5 basis points,
plus (b) accrued interest on the principal amount hereof to the
Redemption Date.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers, Inc., Citicorp Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and their respective
successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest will cease to accrue on the Securities
of this series or portions thereof called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the Senior
Notes to be redeemed shall equal the sum of (a) the greater of
(i) 100% of the principal amount of such Senior Notes, and (ii)
the sum of the present values of the remaining scheduled payments
of principal and interest thereon from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture) plus 5 basis points plus
accrued interest on the principal amount hereof to the Redemption
Date."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $5,000 and in
integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement
and a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the
extent related to such series primary obligations of such
Subsidiary, substituting such Subsidiary of the Company for
the Company in the form of the Securities of this series and
in provisions of the Indenture to the extent related to such
series and releasing and discharging the Company from its
obligations under the Securities of this series and the
Indenture to the extent related to such series; and (b) the
Trustee shall have received (i) an executed counterpart of
such assumption agreement and supplemental indenture;
(ii) evidence satisfactory to the Trustee and the Company
that all necessary authorizations, consents, orders, approvals,
waivers, filings and declarations of or with, Federal, state,
county, municipal, regional or other governmental
authorities, agencies or boards (collectively, "Governmental
Actions") relating to such assumption have been duly obtained and
are in full force and effect, (iii) evidence satisfactory to the
Trustee that any security interest intended to be created by the
Indenture is not in any material way adversely affected or
impaired by any of the agreements or transactions relating to
such assumption and (iv) an Opinion of Counsel for such
Subsidiary, reasonably satisfactory in substance, scope and form
to the Trustee and the Company, to the effect that (A) the
supplemental indenture evidencing such assumption has been duly
authorized, executed and delivered by such Subsidiary, (B) the
execution and delivery by such Subsidiary of such supplemental
indenture and the consummation of the transactions contemplated
thereby do not contravene any provision of law or any
governmental rule applicable to such Subsidiary or any provision
of such Subsidiary's charter documents or by-laws and do not
contravene any provision of, or constitute a default under, or
result in the creation or imposition of any lien upon any of such
Subsidiary's properties or assets under any indenture, mortgage,
contract or other agreement to which such Subsidiary is a party
or by which such Subsidiary or any of its properties may be bound
or affected, (C) all necessary Governmental Actions relating to
such assumption have been duly obtained and are in full force and
effect and (D) such agreement and supplemental indenture
constitute the legal, valid and binding obligations of such
Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws at the time in effect affecting the rights of
creditors generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee, and, other than the obligation to
make payments of the principal of, premium, if any, and interest
on, the Securities of this series, the Company shall be released
and discharged from all other obligations under the Indenture.
Pursuant to the guarantee, the Company will fully and
unconditionally guarantee the payment of the obligations of such
assuming Subsidiary under the Securities of this series and under
the Indenture, including, without limitation, payment, as and
when due, of the principal of, premium, if any, and interest on,
the Securities of this series.
So long as the Insurance Policy described hereafter
remains in effect and in the absence of an Insurer Default,
certain rights of the Holders of the Securities of this series
are limited as described in the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
---------------------------------
--------------------------------- -----------------------------
Name and address of assignee
must be printed or typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocable
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
------------------------------------------------------------
------------------------------------------------------------
Dated:
------------------------ -------------------------
<PAGE>
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a
policy containing the following provisions, such policy being on
file at The Bank of New York, New York, New York.
The Insurer, in consideration of the payment of the premium
and subject to the terms of this policy, hereby unconditionally
and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete
payment required to be made by or on behalf of the Company to The
Bank of New York or its successor (the "Paying Agent") of an
amount equal to (i) the principal of (either at the stated
maturity or by an advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on, the Obligations (as that
term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from
default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times
as such payments of principal would have been due had there not
been any such acceleration); and (ii) the reimbursement of any
such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such
owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured
Amounts." "Obligations" shall mean:
$175,000,000
Texas Utilities Company
6.375% Series B Senior Notes due 2004
Upon receipt of telephonic or telegraphic notice, such
notice subsequently confirmed in writing by registered or
certified mail, or upon receipt of written notice by registered
or certified mail, by the Insurer from the Paying Agent or any
owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made,the
Insurer on the due date of such payment or within one Business
Day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or
its successor, sufficient for the payment of any such Insured
Amounts which are then due. Upon presentment and surrender of
such Obligations or presentment of such other proof of ownership
of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to
payment of Insured Amounts on the Obligations, such instruments
being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the
Insured Amounts due on such Obligations, less any amount held by
the Paying Agent for the payment of such Insured Amounts and
legally available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein, the term "owner" shall mean the registered
owner of any Obligation as indicated in the books maintained by
the Security Registrar, Paying Agent, the Company, or any
designee of the Company for such purpose. The term owner shall
not include the Company or any party whose agreement with the
Company constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the
Insurer at its offices located at 113 King Street, Armonk, New
York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium
on this policy is not refundable for any reason including the
payment prior to maturity of the Obligations.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION. In the event the
Insurer is unable to fulfill its contractual obligation under
this policy or contract or application or certificate or evidence
of coverage, the policyholder or certificateholder is not
protected by an insurance guaranty fund or other solvency
protection arrangement.
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE ANY OR ALL OF ITS
6.20% SERIES A EXCHANGE SENIOR NOTES DUE 2002
FOR
6.20% SERIES A SENIOR NOTES DUE 2002
AND
6.375% SERIES B EXCHANGE SENIOR NOTES DUE 2004
FOR
6.375% SERIES B SENIOR NOTES DUE 2004
OF
TEXAS UTILITIES COMPANY
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THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON ________, 1998 UNLESS EXTENDED (THE "EXPIRATION DATE").
TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME,
ON THE EXPIRATION DATE.
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Deliver To:
The Bank of New York, Exchange Agent
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Reorganization Section,
Theresa Gass
By Facsimile:
(Eligible Institutions Only)
(212) 815-6339
Confirm by Telephone:
(212) 815-5942
By Hand or Overnight Courier:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
Attention: Reorganization Section,
Theresa Gass
Delivery of this instrument to an address other than as set forth
above or transmission of instructions via a facsimile number
other than the one listed above will not constitute a valid
delivery. The instructions accompanying this Letter of
Transmittal should be read carefully before this Letter of
Transmittal is completed.
The undersigned acknowledges that he or she has received and
reviewed the Prospectus dated _____, 1998 (the "Prospectus") of
TEXAS UTILITIES COMPANY (the "Issuer") and this Letter of
Transmittal (the "Letter of Transmittal"), which together
constitute (i) the Issuer's offer (the "Exchange Offer") to
exchange up to $125,000,000 principal amount of any and all of
its outstanding 6.20% Series A Senior Notes due 2002 ("6.20%
Series A Notes") for an equal principal amount of its 6.20%
Series A Exchange Senior Notes due 2002 ("Series A Exchange
Notes") and any and all of its outstanding 6.375% Series B Senior
Notes due 2004 ("6.375% Series B Notes") for an equal principal
amount of its 6.375% Series B Exchange Senior Notes due 2004
("Series B Exchange Notes"). Hereinafter the Series A Exchange
Notes and the Series B Exchange Notes are referred to together as
the New Notes, and the 6.20% Series A Notes and the 6.375% Series
B Notes are referred to as the Old Notes. The New Notes have
been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement of which
the Prospectus is a part. Old Notes may be tendered only in the
principal amount of $5,000 and integral multiples of $1,000 in
excess thereof. Other capitalized terms used but not defined
herein have the meanings given to them in the Prospectus.
This Letter of Transmittal is to be completed by a holder of
Old Notes either (i) if certificates for Old Notes are to be
forwarded herewith or (ii) unless an Agent's Message (as defined
below) is utilized, if tenders of Old Notes are to be made by
book-entry transfer into the account of The Bank of New York, as
Exchange Agent (the "Exchange Agent"), at the Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in "The Exchange Offer Book-Entry Transfer"
section of the Prospectus. Holders of Old Notes whose
certificates are not immediately available, or who are unable to
deliver their certificates or confirmation of the book-entry
tender of their Old Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility (a "Book-Entry Confirmation")
and all other documents required by this Letter of Transmittal to
the Exchange Agent on or prior to the Expiration Date, must
tender their Old Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer Guaranteed Delivery
Procedures" section of the Prospectus. See Instruction 1.
Delivery of documents to the Book-Entry Transfer Facility does
not constitute delivery to the Exchange Agent.
The term "Agent's Message" means a message, transmitted by
the Book-Entry Transfer Facility and received by the Exchange
Agent and forming a part of a Book Entry Confirmation, which
states that such Book-Entry Transfer Facility has received an
express acknowledgment from the participant in such Book-Entry
Facility tendering the Old Notes which are the subject of such
Book-Entry Confirmation, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and
that the Company may enforce such agreement against such
participant. The term "Holder" with respect to the Exchange
Offer means (i) any person who is the beneficial owner of Senior
Notes held of record by DTC, (ii) any person in whose name Senior
Notes are registered on the Company's books or (iii) any other
person who has obtained a properly completed assignment from a
registered Holder. The undersigned has completed, executed and
delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Holders who wish to tender their Old Notes must complete this
letter in its entirety.
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THESE BOXES
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DESCRIPTION OF 6.20% SERIES A NOTES
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Names and Principal Amount
address(es) Tendered (must be
of Holder(s) Aggregate in the amount of $5,000
(Please fill in, Certificate Principal or multiples of $1,000
if blank) Number(s)* Amount in excess thereof)**
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TOTAL
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* Need not be completed by Holders tendering by book-entry
transfer.
** Unless indicated in the column labeled "Principal Amount
Tendered," any tendering Holder of 6.20% Series A Notes will
be deemed to have tendered the entire aggregate principal
amount represented by the column labeled "Aggregate
Principal Amount."
If the space provided above is inadequate, list the
certificate numbers and principal amounts on a separate
signed schedule and affix the list to this Letter of
Transmittal.
The minimum permitted tender is $5,000 in principal amount
of 6.20% Series A Notes. All other tenders must be in
integral multiples of $1,000 in excess of $5,000.
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[ ] CHECK HERE IF CERTIFICATED 6.20% SERIES A NOTES ARE ENCLOSED
HEREWITH.
[ ] CHECK HERE IF 6.20% SERIES A NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING (FOR USE
BY ELIGIBLE INSTITUTIONS (AS HEREINAFTER DEFINED) ONLY):
Name of Tendering Institution_______________________________
DTC Book-Entry Account Number_______________________________
Transaction Code Number_____________________________________
[ ] CHECK HERE IF 6.20% SERIES A NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED
HEREWITH AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE
INSTITUTIONS ONLY):
Name(s) of Registered Old Noteholder(s)_____________________
Date of Execution of Notice of Guaranteed Delivery__________
Window Ticket Number (if available)_________________________
Name of Institution which Guaranteed Delivery_______________
Account Number (if delivered by book-entry transfer)________
<PAGE>
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SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY (i) if certificates for 6.20% Series A Notes
not exchanged, or Series A Exchange Notes issued in exchange for
6.20% Series A Notes accepted for exchange, are to be issued in
the name of someone other than the undersigned, or (ii) if 6.20%
Series A Notes tendered by book-entry transfer which are not
exchanged are to be returned by credit to an account maintained
at Depository Trust Company ("DTC") other than the account from
which they were tendered.
Issue certificate(s) in the name of:
Name_____________________________________________________________
(Please Print)
Address__________________________________________________________
_________________________________________________________________
(Include Zip Code)
_________________________________________________________________
(Tax Identification or Social Security No.)
Credit 6.20% Series A Notes not exchanged and delivered by book-
entry transfer to the DTC account set forth below:
________________________________________
DTC Account Number
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SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY if certificates for 6.20% Series A Notes not
exchanged, or Series A Exchange Notes issued in exchange for
6.20% Series A Notes accepted for exchange, are to be sent to
someone other than the undersigned, or to the undersigned at an
address other than that shown above.
Mail to:
Name_____________________________________________________________
(Please Print)
Address__________________________________________________________
_________________________________________________________________
(Include Zip Code)
_________________________________________________________________
(Tax Identification or Social Security No.)
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<PAGE>
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DESCRIPTION OF 6.375% SERIES B NOTES
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Names and Principal Amount
address(es) Tendered (must be
of Holder(s) Aggregate in the amount of $5,000
(Please fill in, Certificate Principal or multiples of $1,000
if blank) Number(s)* Amount in excess thereof)**
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TOTAL
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* Need not be completed by Holders tendering by book-entry
transfer.
** Unless indicated in the column labeled "Principal Amount
Tendered," any tendering Holder of 6.375% Series B Notes
will be deemed to have tendered the entire aggregate
principal amount represented by the column labeled
"Aggregate Principal Amount."
If the space provided above is inadequate, list the
certificate numbers and principal amounts on a separate
signed schedule and affix the list to this Letter of
Transmittal.
The minimum permitted tender is $5,000 in principal amount
of 6.375% Series B Notes. All other tenders must be in
integral multiples of $1,000 in excess of $5,000.
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[ ] CHECK HERE IF CERTIFICATED 6.375% SERIES B NOTES ARE
ENCLOSED HEREWITH.
[ ] CHECK HERE IF 6.375% SERIES B NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING (FOR USE
BY ELIGIBLE INSTITUTIONS (AS HEREINAFTER DEFINED) ONLY):
Name of Tendering Institution_______________________________
DTC Book-Entry Account Number_______________________________
Transaction Code Number_____________________________________
[ ] CHECK HERE IF 6.375% SERIES B NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED
HEREWITH AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE
INSTITUTIONS ONLY):
Name(s) of Registered Old Noteholder(s)_____________________
Date of Execution of Notice of Guaranteed Delivery__________
Window Ticket Number (if available)_________________________
Name of Institution which Guaranteed Delivery_______________
Account Number (if delivered by book-entry transfer)________
<PAGE>
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SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY (i) if certificates for 6.375% Series B
Notes not exchanged, or Series B Exchange Notes issued in
exchange for 6.375% Series B Notes accepted for exchange, are to
be issued in the name of someone other than the undersigned, or
(ii) if 6.375% Series B Notes tendered by book-entry transfer
which are not exchanged are to be returned by credit to an
account maintained at Depository Trust Company ("DTC") other than
the account from which they were tendered.
Issue certificate(s) in the name of:
Name_____________________________________________________________
(Please Print)
Address__________________________________________________________
_________________________________________________________________
(Include Zip Code)
_________________________________________________________________
(Tax Identification or Social Security No.)
Credit 6.375% Series B Notes not exchanged and delivered by book-
entry transfer to the DTC account set forth below:
_________________________________________
DTC Account Number
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SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY if certificates for 6.375% Series B Notes
not exchanged, or Series B Exchange Notes issued in exchange for
6.375% Series B Notes accepted for exchange, are to be sent to
someone other than the undersigned, or to the undersigned at an
address other than that shown above.
Mail to:
Name_____________________________________________________________
(Please Print)
Address__________________________________________________________
_________________________________________________________________
(Include Zip Code)
_________________________________________________________________
(Tax Identification or Social Security No.)
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<PAGE>
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer,
the undersigned hereby tenders to the Issuer the principal amount
of Old Notes indicated above. Subject to and effective upon the
acceptance for exchange of the principal amount of Old Notes
tendered in accordance with this Letter of Transmittal, the
undersigned sells, assigns and transfers to, or upon the order
of, the Issuer all right, title and interest in and to the Old
Notes tendered hereby. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent its agent and
attorney-in-fact (with full knowledge that the Exchange Agent
also acts as the agent of the Issuer) with respect to the
tendered Old Notes with full power of substitution to (i) deliver
certificates for such Old Notes, or transfer ownership of such
Old Notes on the account books maintained by DTC, to the Issuer
and deliver all accompanying evidences of transfer and
authenticity to, or upon the order of, the Issuer and
(ii) present such Old Notes for transfer on the books of the
Issuer and receive all benefits and otherwise exercise all rights
of beneficial ownership of such Old Notes, all in accordance with
the terms of the Exchange Offer. The power of attorney granted
in this paragraph shall be deemed to be irrevocable and coupled
with an interest.
The undersigned hereby represents and warrants that he or
she has full power and authority to tender, sell, assign and
transfer the Old Notes tendered hereby and that the Issuer will
acquire good and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and not subject
to any adverse claim, when the same are acquired by the Issuer.
The undersigned hereby further represents that (i) any New Notes
acquired in exchange for Old Notes tendered hereby will have been
acquired in the ordinary course of business of the person
receiving such New Notes, whether or not the undersigned, (ii)
neither the undersigned nor any such other person is engaging in
or intends to engage in a distribution of the New Notes, (iii)
neither the Holder nor any such other person has an arrangement
or understanding with any person to participate in the
distribution of such New Notes and (iv) neither the Holder nor
any such other person is an "affiliate," as defined in Rule 405
under the Securities Act, of the Issuer.
The undersigned also acknowledges that this Exchange Offer
is being made in reliance upon interpretations contained in
letters issued to third parties by the staff of the Securities
and Exchange Commission (the "SEC") that the New Notes issued in
exchange for the Old Notes pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by Holders
thereof (other than any such Holder that is an "affiliate" of the
Issuer within the meaning of Rule 405 under the Securities Act),
without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes
are acquired in the ordinary course of such Holders' business and
such Holders are not engaging in and do not intend to engage in a
distribution of the New Notes and have no arrangement or
understanding with any person to participate in a distribution of
such New Notes. If the undersigned is not a broker-dealer, the
undersigned represents that it is not engaged in, and does not
intend to engage in, a distribution of New Notes. If the
undersigned is a broker-dealer that will receive New Notes for
its own account in exchange for Old Notes that were acquired as a
result of market-making activities or other trading activities,
it acknowledges that it will deliver a prospectus in connection
with any resale of such New Notes; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
The undersigned will, upon request, execute and deliver any
additional documents deemed by the Exchange Agent or the Issuer
to be necessary or desirable to complete the assignment, transfer
and purchase of the Old Notes tendered hereby.
For purposes of the Exchange Offer, the Issuer shall be
deemed to have accepted validly tendered Old Notes when, as and
if the Issuer has given oral or written notice thereof to the
Exchange Agent.
If any Old Notes tendered in certificated form are not
accepted for exchange pursuant to the Exchange Offer for any
reason, certificates for any such unaccepted Old Notes will be
returned, without expense, to the undersigned at the address
shown below or at a different address as may be indicated herein
under "Special Delivery Instructions" as promptly as practicable
after the Expiration Date. If any Old Notes tendered in book-
entry form are not accepted for exchange pursuant to the Exchange
Offer for any reason, such unaccepted Old Notes will be returned
by credit to the tendering account or to a different account as
may be indicated herein under "Special Issuance Instructions" as
promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this
Letter of Transmittal shall survive the death, incapacity or
dissolution of the undersigned, and every obligation of the
undersigned under this Letter of Transmittal shall be binding
upon the undersigned's heirs, personal representatives,
successors and assigns.
The undersigned understands that tenders of Old Notes
pursuant to the procedures described under the caption THE
EXCHANGE OFFER "Procedures for Tendering" in the Prospectus and
in the instructions hereto will constitute a binding agreement
between the undersigned and the Issuer upon the terms and subject
to the conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance
Instructions," please issue the certificates representing the New
Notes issued in exchange for certificated Old Notes accepted for
exchange and return any certificated Old Notes not tendered or
not exchanged, in the name(s) of the undersigned. Similarly,
unless otherwise indicated under "Special Delivery Instructions,"
please send the certificates representing the New Notes issued in
exchange for the certificated Old Notes accepted for exchange and
any certificates for Old Notes not tendered or not exchanged (and
accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signature(s). In the event
that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates
representing the New Notes issued in exchange for the
certificated Old Notes accepted for exchange in the name(s) of,
and return any certificated Old Notes not tendered or not
exchanged and send said certificates to, the person(s) so
indicated. The undersigned recognizes that the Issuer has no
obligation pursuant to the "Special Payment Instructions" and
"Special Delivery Instructions" to transfer any Old Notes from
the name of the registered Holder(s) thereof if the Issuer does
not accept for exchange any of the Old Notes so tendered.
Holders of Old Notes in certificated form who wish to tender
their Old Notes and (i) whose Old Notes are not immediately
available, or (ii) who cannot deliver their Old Notes, this
Letter of Transmittal or any other documents required hereby to
the Exchange Agent prior to the Expiration Date (or who cannot
comply with the book-entry transfer procedure on a timely basis),
may tender their Old Notes according to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The
Exchange Offer Guaranteed Delivery Procedures." See Instruction
1 regarding the completion of this Letter of Transmittal, printed
below.
<PAGE>
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
X
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Date
X
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Signature(s) of Holder(s) Date
or Authorized Signatory
Area Code and Telephone Number:
--------------------------------
The above lines must be signed by the beneficial owners of
the Old Notes or, in the case of certificated Old Notes, by the
registered Holder(s) of Old Notes as their name(s) appear(s) on
the Old Notes or by person(s) authorized to become registered
Holder(s) by a properly completed assignment from the registered
Holder(s), a copy of which must be transmitted with this Letter
of Transmittal. If Old Notes to which this Letter of Transmittal
relate are held of record by two or more joint Holders, then all
such Holders must sign this Letter of Transmittal. If signature
is by trustee, executor, administrator, guardian, attorney-in-
fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, then such person must (i)
set forth his or her full title below and (ii) unless waived by
the Issuer, submit evidence satisfactory to the Issuer of such
person's authority so to act. See Instruction 4 regarding the
completion of this Letter of Transmittal, printed below.
Name(s):_________________________________________________________
_________________________________________________________________
(Please Print)
Capacity: _______________________________________________________
Address: _______________________________________________________
_______________________________________________________
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution (as
hereinafter defined):
(If required by Instruction 4)
_______________________________________________________
(Name of Eligible Institution Guaranteeing Signatures)
By_____________________________________________________
(Authorized Signature)
_____________________________________________________
(Printed Name)
_____________________________________________________
(Title)
Dated: _________________, 1998
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES.
The tendered Old Notes or any confirmation of a book-entry
transfer (a "Book-Entry Confirmation"), as well as a properly
completed and duly executed copy of this Letter of Transmittal or
facsimile hereof and any other documents required by this Letter
of Transmittal must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time,
on the Expiration Date. The method of delivery of the tendered
Old Notes, this Letter of Transmittal and all other required
documents to the Exchange Agent is at the election and risk of
the Holder and, except as otherwise provided below, the delivery
will be deemed made only when actually received or confirmed by
the Exchange Agent. Instead of delivery by mail, it is
recommended that the Holder use an overnight or hand delivery
service. In all cases, sufficient time should be allowed to
assure delivery to the Exchange Agent before the Expiration Date.
No Letter of Transmittal or Old Notes should be sent to the
Issuer.
Holders of Old Notes in certificated form who wish to tender
their Old Notes and (i) whose Old Notes are not immediately
available, or (ii) who cannot deliver their Old Notes, this
Letter of Transmittal or any other documents required hereby to
the Exchange Agent prior to the Expiration Date or (iii) who are
unable to complete the procedure for book-entry transfer on a
timely basis, must tender their Old Notes according to the
guaranteed delivery procedures set forth below. Pursuant to such
procedure: (i) such tender must be made by or through an
Eligible Institution; (ii) prior to the Expiration Date, the
Exchange Agent must have received from the Eligible Institution a
properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder of the Old
Notes, the certificate number or numbers of such Old Notes and
the principal amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within five
New York Stock Exchange trading days after the Expiration Date,
this Letter of Transmittal (or facsimile hereof) together with
the certificate(s) representing the Old Notes (or a Book-Entry
Confirmation) and any other required documents will be deposited
by the Eligible Institution (as hereinafter defined) with the
Exchange Agent; and (iii) such properly completed and executed
Letter of Transmittal (or facsimile hereof), as well as all other
documents required by this Letter of Transmittal and the
certificates(s) representing all tendered Old Notes (or a Book-
Entry Confirmation) in proper form for transfer, must be received
by the Exchange Agent within five New York Stock Exchange trading
days after the Expiration Date, all as provided in the Prospectus
under the caption "The Exchange Offer Guaranteed Delivery
Procedures." Any Holder of Old Notes who wishes to tender his
Old Notes pursuant to the guaranteed delivery procedures
described above must ensure that the Exchange Agent receives the
Notice of Guaranteed Delivery prior to 5:00 p.m., New York City
time, on the Expiration Date. Upon request of the Exchange
Agent, a Notice of Guaranteed Delivery will be sent to Holders
who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
All questions as to the validity, form, eligibility
(including time of receipt), acceptance of tendered Old Notes and
withdrawal of tendered Old Notes will be determined by the Issuer
in its sole discretion, which determination will be final and
binding. The Issuer reserves the absolute right to reject any
and all Old Notes of either series not properly tendered or any
Old Notes the Issuer's acceptance of which would, in the opinion
of counsel for the Issuer, be unlawful. The Issuer also reserves
the right to waive any irregularities or conditions of tender as
to particular Old Notes. The Issuer's interpretation of the
terms and conditions of the Exchange Offer (including the
instructions in this Letter of Transmittal) shall be final and
binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be
cured within such time as the Issuer shall determine. Neither
the Issuer, the Exchange Agent nor any other person shall be
under any duty to give notification of defects or irregularities
with respect to tenders of Old Notes, nor shall any of them incur
any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such defects
or irregularities have been cured or waived. Any Old Notes
received by the Exchange Agent that are not properly tendered and
as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering
Holders of Old Notes, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration
Date.
2. TENDER BY HOLDER. Any beneficial owner of Old Notes
who is not the registered Holder and who wishes to tender should
(i) execute and deliver this Letter of Transmittal and instruct
his or her securities intermediary to tender his Old Notes for
exchange or (ii) if such Old Notes are in certificated form,
prior to completing and executing this Letter of Transmittal and
delivering his Old Notes, either make appropriate arrangements to
register ownership of the Old Notes in such Holder's name or
obtain a properly completed assignment from the registered
Holder.
3. PARTIAL TENDERS. Tenders of Old Notes will be accepted
only in the principal amount of $5,000 and integral multiples of
$1,000. If less than the entire principal amount of any Old
Notes is tendered, the tendering Holder should fill in the
principal amount tendered in the third column of the box entitled
"Description of 6.20% Series A Notes" or "Description of 6.375%
Series B Notes" above, as the case may be. The entire principal
amount of certificated Old Notes of either series delivered to
the Exchange Agent will be deemed to have been tendered unless
otherwise indicated. If the entire principal amount of any
certificated Old Note of either series is not tendered, then a
certificate for the principal amount not tendered and a
certificate or certificates representing New Notes issued in
exchange for any Old Notes accepted will be sent to the Holder at
his or her registered address, unless a different address is
provided in the appropriate box on this Letter of Transmittal,
promptly after the Old Notes are accepted for exchange.
4. SIGNATURES ON THE LETTER OF TRANSMITTAL; ASSIGNMENTS
AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of
Transmittal (or facsimile hereof) is signed by the record
Holder(s) of the Old Notes tendered hereby, the signature must
correspond with the name(s) as written on the face of the Old
Notes without alteration, enlargement or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is
signed by the registered Holder or Holders of Old Notes tendered
and the certificate or certificates for New Notes issued in
exchange therefor is to be issued (or any untendered principal
amount of Old Notes is to be reissued) to the registered Holder,
the said Holder need not and should not endorse any tendered Old
Notes, nor provide a separate assignment. In any other case,
such Holder must either properly endorse the Old Notes tendered
or transmit a properly completed separate assignment with this
Letter of Transmittal, with the signatures on the endorsement or
assignment guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is
signed by a person other than the registered Holder or Holders of
any certificated Old Notes listed, such Old Notes must be
endorsed or accompanied by appropriate assignments, in each case
signed as the name of the registered Holder or Holders appears on
the Old Notes.
If this Letter of Transmittal (or facsimile hereof) or any
Old Notes or assignments are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, or officers of
corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and,
unless waived by the Issuers, evidence satisfactory to the
Issuers of their authority so to act must be submitted with this
Letter of Transmittal.
Endorsements on certificated Old Notes or signatures on
assignments required by this Instruction 4 must be guaranteed by
an Eligible Institution.
Except as otherwise provided below, all signatures on this
Letter of Transmittal must be guaranteed by a participant in a
recognized Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal need not
be guaranteed if (a) this Letter of Transmittal is signed by the
registered Holder(s) of the Old Notes tendered herewith and such
Holder(s) have not completed the box set forth herein entitled
"Special Payment Instructions" or the box entitled "Special
Delivery Instructions," or (b) if such Old Notes are tendered for
the account of an Eligible Institution.
5. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. Tendering
Holders of certificated Old Notes should indicate, in the
applicable box or boxes, the name and address to which New Notes
or substitute Old Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from
the name and address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the
taxpayer identification or social security number of the person
named must also be indicated.
6. TRANSFER TAXES. The Issuer will pay all transfer
taxes, if any, applicable to the exchange of Old Notes pursuant
to the Exchange Offer. If, however, certificates representing
New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be
registered or issued in the name of, any person other than the
registered holder of the Old Notes tendered hereby, or if
tendered Old Notes in certificated form are registered in the
name of any person other than the person signing this Letter of
Transmittal, or if a transfer tax is imposed for any reason other
than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on
the registered Holder or on any other persons) will be payable by
the tendering Holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be
billed directly to such tendering Holder.
Except as provided in this Instruction 6, it will not be
necessary for transfer tax stamps to be affixed to the Old Notes
listed in this Letter of Transmittal.
7. WAIVER OF CONDITIONS. The Issuer reserves the absolute
right to amend, waive or modify specified conditions in the
Exchange Offer in the case of any Old Notes tendered.
8. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any
tendering Holder whose Old Notes have been mutilated, lost,
stolen or destroyed should contact the Exchange Agent at the
address indicated herein for further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions and requests for assistance and requests for additional
copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address specified in the
Prospectus. Holders may also contact their broker, dealer,
commercial bank, trust company, nominee or other securities
intermediary for assistance concerning the Exchange Offer.
10. IMPORTANT TAX INFORMATION. Holders who have not
previously furnished a taxpayer identification number to the
Paying Agent for the Old Notes, should furnish such information
to the Exchange Agent on Substitute Form W-9. A copy of such
form may be obtained from the Exchange Agent.
(DO NOT WRITE IN SPACE BELOW)
==================================================
Certificate Old Notes Old Notes
Surrendered Tendered Accepted
--------------------------------------------------
--------------------------------------------------
==================================================
Delivery Prepared by_______________ Checked By_______ Date_______
<PAGE>
NOTICE OF GUARANTEED DELIVERY FOR
TEXAS UTILITIES COMPANY
This form or one substantially equivalent hereto must be
used to accept the Exchange Offer of Texas Utilities Company (the
"Issuer") made pursuant to the Prospectus, dated ______, 1998
(the "Prospectus"), if certificates for Old Notes of the Issuer
are not immediately available or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Exchange Agent prior
to 5:00 p.m., New York City time, on the Expiration Date of the
Exchange Offer. Such form may be delivered or transmitted by
telegram, facsimile transmission, mail or hand delivery to The
Bank of New York (the "Exchange Agent") as set forth below. In
addition, in order to utilize the guaranteed delivery procedure
to tender Old Notes pursuant to the Exchange Offer, a completed,
signed and dated Letter of Transmittal (or facsimile thereof)
must also be received by the Exchange Agent prior to 5:00 p.m.,
New York City time, on the Expiration Date. Capitalized terms
not defined herein are defined in the Prospectus.
Deliver To:
The Bank of New York, Exchange Agent
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Reorganization Section,
Theresa Gass
By Facsimile:
(Eligible Institutions Only)
(212) 815-6339
Confirm by Telephone:
(212) 815-5942
By Hand or Overnight Courier:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
Attention: Reorganization Section,
Theresa Gass
Delivery of this instrument to an address other than as set
forth above, or transmission of instructions via facsimile other
than as set forth above, will not constitute a valid delivery.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus
and the accompanying Letter of Transmittal, the undersigned
hereby tenders to the Issuer the principal amount of Old Notes
set forth below, pursuant to the guaranteed delivery procedure
described in THE EXCHANGE OFFER "Guaranteed Delivery Procedures"
section of the Prospectus. By so tendering, the undersigned
hereby does make, at and as of the date hereof, the
representations and warranties of a tendering holder of Old Notes
set forth in the Letter of Transmittal.
-----------------------------------------------------------------
Principal Amount of 6.20% Series A Notes Tendered:*
$__________________________________
Certificate Nos. (if available):
___________________________________
Total Principal Amount Represented by 6.20% Series A Notes
Certificate(s):
$__________________________________
-----------------------------------------------------------------
-----------------------------------------------------------------
If 6.20% Series A Notes will be delivered by book-entry transfer
to the Depository Trust Company, provide account number.
Account
Number____________________________________________________
-----------------------------------------------------------------
* Must be in denominations of $5,000 principal amount and
integral multiples of $1,000 in excess thereof.
<PAGE>
-----------------------------------------------------------------
Principal Amount of 6.375% Series B Notes Tendered:*
$__________________________________
Certificate Nos. (if available):
___________________________________
Total Principal Amount Represented by 6.375% Series B Notes
Certificate(s):
$__________________________________
-----------------------------------------------------------------
-----------------------------------------------------------------
If 6.375% Series B Notes will be delivered by book-entry transfer
to the Depository Trust Company, provide account number.
Account Number___________________________________________________
-----------------------------------------------------------------
* Must be in denominations of $5,000 principal amount and
integral multiples of $1,000 in excess thereof.
-----------------------------------------------------------------
All authority herein conferred or agreed to be conferred
shall survive the death or incapacity of the undersigned and
every obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns
of the undersigned.
-----------------------------------------------------------------
PLEASE SIGN HERE
X
------------------------------------- -------------
X
------------------------------------- -------------
Signatures of Owner(s) Date
or Authorized Signatory
Area Code and Telephone
Number: _____________________
Must be signed by the Holder(s) of Old Notes as their
name(s) appear(s) on certificates for Old Notes or on a security
position listing, or by person(s) authorized to become registered
Holder(s) by endorsement and documents transmitted with this
Notice of Guaranteed Delivery. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity,
such person must set forth his or her full title below.
Please print name(s) and address(es)
Name(s): _______________________________________________________
_______________________________________________________
_______________________________________________________
Capacity: _______________________________________________________
Address(es): ____________________________________________________
_______________________________________________________
<PAGE>
GUARANTEE
The undersigned, a member of a registered national
securities exchange, or a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company
having an officer or correspondent in the United States, hereby
guarantees that the certificates representing the principal
amount of Old Notes tendered hereby in proper form or transfer,
or timely confirmation of the book-entry transfer of such Old
Notes into the Exchange Agent's account at Depository Trust
Company pursuant to the procedures set forth in "The Exchange
Offer Guaranteed Delivery Procedures" section of the Prospectus,
together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any
required signature guarantee and any other documents required by
the Letter of Transmittal, will be received by the Exchange Agent
at the address set forth above, no later than five New York Stock
Exchange trading days after the Expiration Date.
______________________________ ______________________________
Name of Firm Authorized Signature
______________________________ ______________________________
Address Title
______________________________ Name:_________________________
Zip Code (Please Type or Print)
Area Code
and Tel. No. ________________ Dated:________________________
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM.
CERTIFICATES FOR OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER
OF TRANSMITTAL.
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.
ATTORNEYS AND COUNSELORS AT LAW
ENERGY PLAZA - 1601 BRYAN STREET, 33RD FLOOR
DALLAS, TEXAS 75201
Exhibit 5(a)
February 10, 1998
Texas Utilities Electric Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed exchange (Exchange
Offer) by Texas Utilities Electric Company (Company) of any
and all of its outstanding 6.20% Series A Senior Notes due
2002 (Old Series A Notes) for an equal principal amount of
its 6.20% Series A Exchange Senior Notes due 2002 (New Series
A Notes) and any and all of its outstanding 6.375% Series B
Senior Notes due 2004 (Old Series B Notes and, together with
the Old Series A Notes, the Old Notes) for an equal principal
amount of its 6.375% Series B Exchange Senior Notes due 2004
(New Series B Notes and, together with the New Series A Notes,
the New Notes), as contemplated in the Company's Form S-4
registration statement (said registration statement, the
Registration Statement) to be filed by the Company with the
Securities and Exchange Commission (Commission) under the
Securities Act of 1933, on or about the date hereof, we are
of the opinion that:
1. The Company is a corporation validly
organized and existing under the laws of the
State of Texas.
2. All requisite action necessary to make the
New Notes valid, legal and binding
obligations of the Company shall have been
taken when the Exchange Offer shall have
been completed and any Old Notes validly
tendered pursuant thereto shall have been
exchanged for the New Notes as contemplated
in the Registration Statement and any
prospectus relating to the Exchange Offer.
We are members of the State Bar of Texas and do
not hold ourselves out as experts on the laws of New York.
As to all matters of New York law, we have with your
consent relied upon an opinion of even date herewith
addressed to you by Reid & Priest LLP, of New York, New
York.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the use
of our name as counsel in the Registration Statement.
Very truly yours,
Worsham, Forsythe &
Wooldridge, L.L.P.
By: /s/ T.A. Mack
-----------------
A Partner
REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019-4097
Exhibit 5(b) and 8
(212) 603-2000
New York, New York
February 10, 1998
Texas Utilities Electric Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed exchange (Exchange
Offer) by Texas Utilities Electric Company (Company) of any
and all of its outstanding 6.20% Series A Senior Notes due
2002 (Old Series A Notes) for an equal principal amount of
its 6.20% Series A Exchange Senior Notes due 2002 (New
Series A Notes) and any and all of its outstanding 6.375%
Series B Senior Notes due 2004 (Old Series B Notes and,
together with the Old Series A Notes, the Old Notes) for an
equal principal amount of its 6.375% Series B Exchange
Senior Notes due 2004 (New Series B Notes and, together
with the New Series A Notes, the New Notes), as
contemplated in the Company's Form S-4 registration
statement (said registration statement, the Registration
Statement) to be filed by the Company with the Securities
and Exchange Commission (Commission) under the Securities
Act of 1933, on or about the date hereof, we are of the
opinion that:
1. The Company is a corporation validly
organized and existing under the laws of the
State of Texas.
2. All requisite action necessary to make the
New Notes valid, legal and binding
obligations of the Company shall have been
taken when the Exchange Offer shall have
been completed and any Old Notes validly
tendered pursuant thereto shall have been
exchanged for the New Notes as contemplated
in the Registration Statement and any
prospectus relating to the Exchange Offer.
We are members of the New York Bar and do not
hold ourselves out as experts on the laws of the state of
Texas. Accordingly, in rendering this opinion, we have
relied, with your consent, as to all matters governed by
the laws of Texas, upon an opinion of even date herewith
addressed to you by Worsham, Forsythe & Wooldridge, L.L.P.,
of Dallas, Texas, General Counsel for the Company, which is
being filed as an exhibit to the Registration Statement.
We confirm our opinion as set forth under the
caption "Certain United States Federal Income Tax
Consequences" in the prospectus constituting a part of the
Registration Statement.
We hereby consent to the use of our name in such
Registration Statement and to the use of this opinion as an
exhibit thereto.
Very truly yours,
/s/ Reid & Priest LLP
Reid & Priest LLP
EXHIBIT 12(a)
TEXAS UTILITIES COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31,
-----------------------------------
9/97 1996 1995
----- ---- ----
THOUSANDS OF DOLLARS, EXCEPT RATIOS
EARNINGS:
Net income before
preferred dividends $ 665,756 $ 806,964 $(53,731)
Add: Total federal income
taxes 347,348 375,232 (60,035)
Fixed charges (see
detail below) 833,854 851,482 732,313
---------- ---------- --------
Total earnings $1,846,958 $2,033,678 $618,547
========== ========== ========
FIXED CHARGES:
Interest on mortgage
bonds $ 453,062 $ 486,935 $527,131
Interest on other long-
term debt 89,682 96,404 102,138
Amortization of debt
discount, (premium) and
expense 13,395 13,239 10,649
Amortization of loss on
reacquired debt 24,812 23,124 20,881
Other interest charges 171,720 178,191 45,384
Preferred trust securities
distributions 59,675 33,001 1,801
Rentals representative of
the interest factor 21,508 20,588 24,329
---------- -------- --------
Total fixed charges $ 833,854 $ 851,482 $732,313
========== ========== ========
RATIO OF EARNINGS TO FIXED 2.21 2.39 0.84
CHARGES ---- ---- ----
YEAR ENDED DECEMBER 31,
-----------------------------------
1994 1993 1992
----- ---- ----
THOUSANDS OF DOLLARS, EXCEPT RATIOS
EARNINGS:
Net income before
preferred dividends $644,682 $ 483,892 $818,529
Add: Total federal income
taxes 326,638 209,544 224,184
Fixed charges (see
detail below) 752,892 782,439 785,183
---------- ---------- ----------
Total earnings $1,724,212 $1,475,875 $1,827,896
========== ========== ==========
FIXED CHARGES:
Interest on mortgage
bonds $ 567,543 $ 611,090 $ 598,235
Interest on other long-
term debt 92,524 109,458 122,494
Amortization of debt
discount, (premium) and
expense 9,591 7,080 5,235
Amortization of loss on
reacquired debt 19,379 13,283 9,301
Other interest charges 37,838 11,891 19,090
Preferred trust securities
distributions -- -- --
Rentals representative of
the interest factor 26,017 29,637 30,828
---------- ---------- ----------
Total fixed charges $ 752,892 $ 782,439 $ 785,183
========== ========== ==========
RATIO OF EARNINGS TO FIXED 2.29 1.89 2.33
CHARGES ---- ---- ----
EXHIBIT 15(a)
Texas Utilities Company:
We have made reviews, in accordance with standards established by
the American Institute of Certified Public Accountants, of the
unaudited condensed consolidated interim financial information of
Texas Energy Industries, Inc. ("TEI"), formerly Texas Utilities
Company, for the periods ended March 31, 1997 and 1996, and June
30, 1997 and 1996, and Texas Utilities Company and subsidiaries
(the "Company") for the periods ended September 30, 1997 and
1996, as indicated in our reports dated May 8, 1997, August 11,
1997 and September 12, 1997, respectively; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were
included in TEI's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997, and the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1997, are being incorporated by reference in this Registration
Statement.
We also are aware that the aforementioned reports, pursuant to
Rule 436(c) under the Securities Act of 1933, are not considered
a part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Dallas, Texas
February 10, 1998
EXHIBIT 15(b)
ENSERCH Corporation:
We have made reviews, in accordance with standards established by
the American Institute of Certified Public Accountants, of the
unaudited interim condensed consolidated financial information of
ENSERCH Corporation and subsidiary companies (the "Company") for
the periods ended March 31, 1997 and 1996, and June 30, 1997 and
1996, as indicated in our reports dated May 7, 1997 and August
13, 1997, respectively; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our reports referred to above, which were
included in the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997 and June 30, 1997, are being
incorporated by reference in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to
Rule 436(c) under the Securities Act of 1933, are not considered
a part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Dallas, Texas
February 10, 1998
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement on Form S-4 of Texas Utilities Company of our report
dated March 12, 1997, on Texas Energy Industries, Inc. ("TEI"),
formerly Texas Utilities Company, which report includes an
explanatory paragraph concerning TEI's change during 1995 in its
method of accounting for the impairment of long lived assets and
long lived assets to be disposed of to conform with Statement of
Financial Accounting Standards No. 121, appearing in TEI's Annual
Report on Form 10-K for the year ended December 31, 1996 and to
the reference to us under the heading "Experts" in the Prospectus
which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Dallas, Texas
February 10, 1998
/TEXT>
EXHIBIT 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement on Form S-4 of Texas Utilities Company of our report
dated February 10, 1997, appearing in the ENSERCH Corporation
Annual Report on Form 10-K for the year ended December 31, 1996,
and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Dallas, Texas
February 10, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Prospectus
of our report dated February 3, 1997, on our audits of the
consolidated financial statements of MBIA Insurance Corporation
and Subsidiaries as of December 31, 1996 and 1995 and for each of
the three years in the period ended December 31, 1996. We also
consent to the reference to our firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
New York, New York
February 9, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TEXAS UTILITIES COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-1837355
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
6.20% SERIES A EXCHANGE SENIOR NOTES DUE 2002
(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 550 17th Street, N.W.,
Corporation Washington, D.C. 20429
New York Clearing House
Association New York, N.Y.
(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 6th day of February, 1998.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
--------------------------
Walter N. Gitlin
Vice President
<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 September 30,
1997, published in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . $ 5,004,638
Interest-bearing balances . . . . . . . . . . . . 1,271,514
Securities:
Held-to-maturity securities . . . . . . . . . . . 1,105,782
Available-for-sale securities . . . . . . . . . . 3,164,271
Federal funds sold and Securities
purchased under agreements to resell . . . . . 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . 34,916,196
LESS: Allowance for loan and
lease losses . . . . . . . . . . . 581,177
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . 34,334,590
Assets held in trading accounts . . . . . . . . . . 2,035,284
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . 671,664
Other real estate owned . . . . . . . . . . . . . . 13,306
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . 210,685
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . 1,463,446
Intangible assets . . . . . . . . . . . . . . . . . 753,190
Other assets . . . . . . . . . . . . . . . . . . . 1,784,796
-----------
Total assets . . . . . . . . . . . . . . . . . . . $57,536,995
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $27,270,824
Noninterest-bearing . . . . . . . . 12,160,977
Interest-bearing . . . . . . . . . 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . 14,687,806
Noninterest-bearing . . . . . . . . 657,479
Interest-bearing . . . . . . . . . 14,030,327
Federal funds purchased and Securities
sold under agreements to repurchase . . . . . . 1,946,099
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . 283,793
Trading liabilities . . . . . . . . . . . . . . . . 1,553,539
Other borrowed money:
With remaining maturity of one year or less . . . 2,245,014
With remaining maturity of more than
one year through three years . . . . . . . . . 0
With remaining maturity of more than
three years . . . . . . . . . . . . . . . . 45,664
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . 1,473,588
Subordinated notes and debentures . . . . . . . . . 1,018,940
Other liabilities . . . . . . . . . . . . . . . . . 2,193,031
----------
Total liabilities . . . . . . . . . . . . . . . . . 52,718,298
----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . 1,135,284
Surplus . . . . . . . . . . . . . . . . . . . . . . 731,319
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . 2,943,008
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . 25,428
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . (16,342)
-----------
Total equity capital . . . . . . . . . . . . . . . 4,818,697
-----------
Total liabilities and equity capital . . . . . . . $57,536,995
===========
<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.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
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)
_________________
6.375% SERIES B EXCHANGE SENIOR NOTES DUE 2004
(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, New York, N.Y.
State of New York 10006 and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza,
New York New York, N.Y. 10045
Federal Deposit Insurance 550 17th Street, N.W.,
Corporation Washington, D.C. 20429
New York Clearing New York, N.Y.
House Association
(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 6th day of February, 1998.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
--------------------------
Walter N. Gitlin
Vice President
<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 September 30,
1997, published in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ ---------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . $ 5,004,638
Interest-bearing balances . . . . . . . . . . . . 1,271,514
Securities:
Held-to-maturity securities . . . . . . . . . . . 1,105,782
Available-for-sale securities . . . . . . . . . . 3,164,271
Federal funds sold and Securities
purchased under agreements to resell . . . . . 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . 34,916,196
LESS: Allowance for loan and
lease losses . . . . . . . . . . . 581,177
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . 34,334,590
Assets held in trading accounts . . . . . . . . . . 2,035,284
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . 671,664
Other real estate owned . . . . . . . . . . . . . . 13,306
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . 210,685
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . 1,463,446
Intangible assets . . . . . . . . . . . . . . . . . 753,190
Other assets . . . . . . . . . . . . . . . . . . . 1,784,796
-----------
Total assets . . . . . . . . . . . . . . . . . . . $57,536,995
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $27,270,824
Noninterest-bearing . . . . . . . . 12,160,977
Interest-bearing . . . . . . . . . 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . 14,687,806
Noninterest-bearing . . . . . . . . 657,479
Interest-bearing . . . . . . . . . 14,030,327
Federal funds purchased and Securities
sold under agreements to repurchase . . . . . . 1,946,099
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . 283,793
Trading liabilities . . . . . . . . . . . . . . . . 1,553,539
Other borrowed money:
With remaining maturity of one year or less . . . 2,245,014
With remaining maturity of more than
one year through three years . . . . . . . . . 0
With remaining maturity of more than
three years . . . . . . . . . . . . . . . . 45,664
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . 1,473,588
Subordinated notes and debentures . . . . . . . . . 1,018,940
Other liabilities . . . . . . . . . . . . . . . . . 2,193,031
----------
Total liabilities . . . . . . . . . . . . . . . . . 52,718,298
----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . 1,135,284
Surplus . . . . . . . . . . . . . . . . . . . . . . 731,319
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . 2,943,008
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . 25,428
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . (16,342)
----------
Total equity capital . . . . . . . . . . . . . . . 4,818,697
----------
Total liabilities and equity capital . . . . . . . $57,536,995
===========
<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.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
___________, 1998
EXCHANGE AGENT AGREEMENT
------------------------
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street 21st Floor
New York, New York 10286
Ladies and Gentlemen:
Texas Utilities Company (the "Company") proposes to
make an offer (the "Exchange Offer") to exchange equal principal
amounts of up to $125,000,000, principal amount of its 6.20%
Series A Senior Notes due 2002 and up to $175,000,000 principal
amount of its 6.375% Series B Senior Notes due 2004
(collectively, the "Old Securities") for equal principal amounts
of, respectively, its 6.20% Series A Exchange Senior Notes due
2002 and 6.37% Series B Exchange Senior Notes due 2004
(collectively, the "New Securities"). The terms and conditions
of the Exchange Offer as currently contemplated are set forth in
a prospectus, dated ___________, 1998 (the "Prospectus"),
proposed to be distributed to all holders of the Old Securities.
The Old Securities and the New Securities are collectively
referred to herein as the "Securities". Capitalized terms used
herein and not defined shall have the meanings ascribed to them
in the Prospectus or the Letter of Transmittal to be delivered
with the Prospectus to record holders of the Old Securities
("Letter of Transmittal").
The Company hereby appoints The Bank of New York to act
as exchange agent (the "Exchange Agent") in connection with the
Exchange Offer. References hereinafter to "you" shall refer to
The Bank of New York.
The Exchange Offer is expected to be commenced by the
Company on or about _____________, 1998. The Letter of
Transmittal accompanying the Prospectus (or in the case of book-
entry securities, the ATOP system) is to be used by the holders
of the Old Securities to accept the Exchange Offer and contains
instructions with respect to the delivery of certificates for Old
Securities tendered in connection therewith.
The Exchange Offer shall expire at 5:00 P.M., New York
City time, on _____________, 1998 or on such later date or time
to which the Company may extend the Exchange Offer (the
"Expiration Date"). Subject to the terms and conditions set
forth in the Prospectus, the Company expressly reserves the right
to extend the Exchange Offer from time to time and may extend the
Exchange Offer by giving oral (confirmed in writing) or written
notice to you before 9:00 A.M., New York City time, on the
business day following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend, in
any way not inconsistent with the Registration Rights Agreement,
or terminate the Exchange Offer, and not to accept for exchange
any Old Securities not theretofore accepted for exchange, upon
the occurrence of any of the conditions of the Exchange Offer
specified in the Prospectus under the caption "The Exchange Offer
-Conditions." The Company will give oral (confirmed in writing)
or written notice of any amendment, termination or nonacceptance
to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are
to act in accordance with the following instructions:
1. You will perform such duties and only such duties
as are specifically set forth in the section of the Prospectus
captioned "The Exchange Offer" and in the Letter of Transmittal or
as specifically set forth herein; provided, however, that in no way
-------- -------
will your general duty to act in good faith and without gross
negligence be discharged by the foregoing.
2. You will establish an account with respect to the
Old Securities at The Depository Trust Company (the "Book-Entry
Transfer Facility") for purposes of the Exchange Offer within two
business days after the date of the Prospectus, and any financial
institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of the Old
Securities by causing the Book-Entry Transfer Facility to
transfer such Old Securities into your account in accordance with
the Book-Entry Transfer Facility's procedure for such transfer.
3. You are to examine each of the Letters of
Transmittal and certificates for Old Securities (or confirmation
of book-entry transfer into your account at the Book-Entry
Transfer Facility) and any other documents delivered or mailed to
you by or for holders of the Old Securities to ascertain whether:
(i) the Letters of Transmittal and any such other documents are
duly executed and properly completed in accordance with
instructions set forth therein and (ii) the Old Securities have
otherwise been properly tendered. In each case where the Letter
of Transmittal or any other document has been improperly
completed or executed or any of the certificates for Old
Securities are not in proper form for transfer or some other
irregularity in connection with the acceptance of the Exchange
Offer exists, you will endeavor to inform the presenters of the
need for fulfillment of all requirements and to take any other
action as may be necessary or advisable to cause such
irregularity to be corrected.
4. With the approval of the President, Senior Vice
President, Executive Vice President, any Vice President or the
Treasurer of the Company (such approval, if given orally, to be
confirmed in writing) or any other party designated by such an
officer in writing, you are authorized to waive any
irregularities in connection with any tender of Old Securities
pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set
forth in the Letter of Transmittal and in the section of the
Prospectus captioned "The Exchange Offer -- Procedures for
Tendering", and Old Securities shall be considered properly
tendered to you only when tendered in accordance with the
procedures set forth therein. Notwithstanding the provisions of
this paragraph 5, Old Securities which the President, Senior Vice
President, Executive Vice President, any Vice President or the
Treasurer of the Company shall approve as having been properly
tendered shall be considered to be properly tendered (such
approval, if given orally, shall be confirmed in writing).
6. You shall advise the Company with respect to any
Old Securities received subsequent to the Expiration Date and
accept its instructions with respect to disposition of such Old
Securities.
7. You shall accept tenders:
a. in cases where the Old Securities are
registered in two or more names only if signed by all named
holders;
b. in cases where the signing person (as
indicated on the Letter of Transmittal) is acting in a
fiduciary or a representative capacity only when proper
evidence of his or her authority so to act is submitted; and
c. from persons other than the registered holder
of Old Securities provided that customary transfer
requirements, including any applicable transfer taxes, are
fulfilled.
You shall accept partial tenders of Old Securities when so
indicated and as permitted in the Letter of Transmittal and
deliver certificates for Old Securities to the transfer agent for
split-up and return any untendered Old Securities to the holder
(or such other person as may be designated in the Letter of
Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the
conditions to the Exchange Offer, the Company will notify you
(such notice if given orally, to be confirmed in writing) of its
acceptance, promptly after the Expiration Date, of all Old
Securities properly tendered and you, on behalf of the Company,
will exchange such Old Securities for New Securities and cause
such Old Securities to be cancelled. Delivery of New Securities
will be made on behalf of the Company by you at the rate of
$1,000 principal amount of New Securities for each $1,000
principal amount of the corresponding series of Old Securities
tendered as promptly as practicable after notice (such notice if
given orally, to be confirmed in writing) of acceptance of said
Old Securities by the Company; provided, however, that in all
cases, Old Securities tendered pursuant to the Exchange Offer
will be exchanged only after timely receipt by you of
certificates for such Old Securities (or confirmation of
book-entry transfer into your account at the Book-Entry
Transfer Facility), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other required documents. You
shall issue New Securities only in denominations of $5,000 or
any integral multiple of $1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are
irrevocable, except that, subject to the terms and upon the
conditions set forth in the Prospectus and the Letter of
Transmittal, Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any
Old Securities tendered if any of the conditions set forth in the
Exchange Offer are not met. Notice of any decision by the
Company not to exchange any Old Securities tendered shall be
given (and confirmed in writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company
does not accept for exchange all or part of the Old Securities
tendered because of an invalid tender, the occurrence of certain
other events set forth in the Prospectus under the caption "The
Exchange Offer -Conditions" or otherwise, you shall as soon as
practicable after the expiration or termination of the Exchange
Offer return those certificates for unaccepted Old Securities (or
effect appropriate book-entry transfer), together with any
related required documents and the Letters of Transmittal
relating thereto that are in your possession, to the persons who
deposited them (or effected such book-entry transfer).
12. All certificates for reissued Old Securities,
unaccepted Old Securities or for New Securities shall be
forwarded by first-class mail.
13. You are not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker,
dealer, bank or other persons or to engage or utilize any person
to solicit tenders.
14. As Exchange Agent hereunder you:
a. shall have no duties or obligations other
than as provided in paragraph 1, those specifically set
forth herein or as may be subsequently agreed to in writing
by you and the Company;
b. will be regarded as making no representations
and having no responsibilities as to the validity,
sufficiency, value or genuineness of any of the certificates
or the Old Securities represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to
and will make no representation as to the validity, value or
genuineness of the Exchange Offer;
c. shall not be obligated to take any legal
action hereunder which might in your reasonable judgment
involve any expense or liability, unless you shall have been
furnished with reasonable indemnity;
d. may reasonably rely on and shall be protected
in acting in reliance upon any certificate, instrument,
opinion, notice, letter, telegram or other document or
security delivered to you and reasonably believed by you to
be genuine and to have been signed by the proper party or
parties;
e. may reasonably act upon any tender,
statement, request, comment, agreement or other instrument
whatsoever not only as to its due execution and validity and
effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which you
shall in good faith believe to be genuine or to have been
signed or represented by a proper person or persons;
f. may rely on and shall be protected in acting
upon written or oral instructions from any officer of the
Company;
g. may consult with your counsel with respect to
any questions relating to your duties and responsibilities
and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by you
hereunder in good faith and in accordance with the advice or
opinion of such counsel; and
h. shall not advise any person tendering Old
Securities pursuant to the Exchange Offer as to whether to
tender or refrain from tendering any portion of Old
Securities or as to the market value or decline or
appreciation in market value of any Old Securities.
15. You shall take such action as may from time to
time be requested by the Company or its counsel (and such other
action as you may reasonably deem appropriate) to furnish copies
of the Prospectus, Letter of Transmittal and the Notice of
Guaranteed Delivery (as described in the Prospectus) or such
other forms as may be approved from time to time by the Company,
to all persons requesting such documents and to accept and comply
with telephone requests for information relating to the Exchange
Offer, provided that such information shall relate only to the
procedures for accepting (or withdrawing from) the Exchange
Offer. The Company will furnish you with copies of such
documents at your request. All other requests for information
relating to the Exchange Offer shall be directed to the Company,
Attention: Treasurer.
16. You shall advise by facsimile transmission or
telephone, and promptly thereafter confirm in writing to the
Treasurer of the Company and such other person or persons as it
may request, daily (and more frequently during the week
immediately preceding the Expiration Date and if otherwise
requested) up to and including the Expiration Date, as to the
principal amount of Old Securities which have been tendered
pursuant to the Exchange Offer and the items received by you
pursuant to this Agreement, separately reporting and giving
cumulative totals as to items properly received and items
improperly received. In addition, you will also inform, and
cooperate in making available to, the Company or any such other
person or persons upon oral request made from time to time prior
to the Expiration Date of such other information as it or he or
she reasonably requests. Such cooperation shall include, without
limitation, the granting by you to the Company and such person as
the Company may request of access to those persons on your staff
who are responsible for receiving tenders, in order to ensure
that immediately prior to the Expiration Date the Company shall
have received information in sufficient detail to enable it to
decide whether to extend the Exchange Offer. You shall prepare a
final list of all persons whose tenders were accepted, the
aggregate principal amount of Old Securities tendered and the
aggregate principal amount of Old Securities accepted and deliver
said list to the Company.
17. Letters of Transmittal, book-entry confirmations
and Notices of Guaranteed Delivery shall be stamped by you as to
the date and the time of receipt thereof and shall be preserved
by you for a period of time at least equal to the period of time
you preserve other records pertaining to the transfer of
securities. You shall dispose of unused Letters of Transmittal
and other surplus materials by returning them to the Company.
18. You hereby expressly waive any lien, encumbrance
or right of set-off whatsoever that you may have with respect to
funds deposited with you for the payment of transfer taxes by
reasons of amounts, if any, borrowed by the Company, or any of
its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder,
you shall be entitled to such compensation as set forth on
Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus
and the Letter of Transmittal and further acknowledge that you
have examined each of them. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the Letter of
Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two
documents, except with respect to the duties, liabilities and
indemnification of you as Exchange Agent, which shall be
controlled by this Agreement.
21. The Company covenants and agrees to indemnify and
hold you harmless in your capacity as Exchange Agent hereunder
against any loss, liability, cost or expense, including
attorneys' fees and expenses, arising out of or in connection
with any act, omission, delay or refusal made by you in reliance
upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document
reasonably believed by you to be valid, genuine and sufficient
and in accepting any tender or effecting any transfer of Old
Securities reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept
any tenders or effect any transfer of Old Securities; provided,
however, that the Company shall not be liable for indemnification
or otherwise for any loss, liability, cost or expense to the
extent arising out of your gross negligence or willful
misconduct. In no case shall the Company be liable under this
indemnity with respect to any claim against you unless the
Company shall be notified by you, by letter or by facsimile
confirmed by letter, of the written assertion of a claim against
you or of any other action commenced against you, promptly after
you shall have received any such written assertion or notice of
commencement of action. The Company shall be entitled to
participate at its own expense in the defense of any such claim
or other action, and, if the Company so elects, the Company shall
assume the defense of any suit brought to enforce any such claim.
In the event that the Company shall assume the defense of any
such suit, the Company shall not be liable for the fees and
expenses of any additional counsel thereafter retained by you so
long as the Company shall retain counsel satisfactory to you to
defend such suit, and so long as you shall have not determined,
in your reasonable judgment, that a conflict of interest exists
between you and the Company.
22. You shall arrange to comply with all requirements
under the tax laws of the United States, including those relating
to missing Tax Identification Numbers, and shall file any
appropriate reports with the Internal Revenue Service. The
Company understands that you are required to deduct 31% on
payments to holders who have not supplied their correct Taxpayer
Identification Number or required certification. Such funds will
be turned over to the Internal Revenue Service in accordance with
applicable regulations.
23. You shall deliver or cause to be delivered, in a
timely manner to each governmental authority to which any
transfer taxes are payable in respect of the exchange of Old
Securities, your check in the amount of all transfer taxes so
payable, and the Company shall reimburse you for the amount of
any and all transfer taxes payable in respect of the exchange of
Old Securities; provided, however, that you shall reimburse the
Company for amounts refunded to you in respect of your payment of
any such transfer taxes, at such time as such refund is received
by you.
24. This Agreement and your appointment as Exchange
Agent hereunder shall be construed and enforced in accordance
with the laws of the State of New York applicable to agreements
made and to be performed entirely within such state, and without
regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
26. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to
be modified, amended, rescinded, cancelled or waived, in whole or
in part, except by a written instrument signed by a duly
authorized representative of the party to be charged. This
Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices,
requests and other communications to any party hereunder shall be
in writing (including facsimile or similar writing) and shall be
given to such party, addressed to it, at its address or telecopy
number set forth below:
If to the Company:
Texas Utilities Company
1601 Bryan Street
Dallas, Texas 75201
Facsimile: 214-812-2488
Attention: Treasurer
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
29. Unless terminated earlier by the parties hereto,
this Agreement shall terminate 90 days following the Expiration
Date. Notwithstanding the foregoing, Paragraphs 19, 21 and 23
shall survive the termination of this Agreement. Upon any
termination of this Agreement, you shall promptly deliver to the
Company any certificates for Securities, funds or property then
held by you as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as
of the date hereof.
<PAGE>
Please acknowledge receipt of this Agreement and
confirm the arrangements herein provided by signing and returning
the enclosed copy.
TEXAS UTILITIES COMPANY
By:______________________
Name:
Title:
Accepted as of the date
first above written:
THE BANK OF NEW YORK, as Exchange Agent
By:_____________________
Name:
Title:
<PAGE>
SCHEDULE I
FEES
