<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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ENSERCH CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
ENSERCH CAPITAL L.L.C.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TEXAS DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
75-0399066 75-2527254
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
ENSERCH CENTER C/O WILLIAM T. SATTERWHITE, ESQ.
300 SOUTH ST. PAUL STREET ENSERCH CORPORATION
DALLAS, TEXAS 75201 SENIOR VICE PRESIDENT AND GENERAL
214-651-8700 COUNSEL
(ADDRESS, INCLUDING ZIP CODE AND 300 SOUTH ST. PAUL STREET
TELEPHONE NUMBER, INCLUDING DALLAS, TEXAS 75201
AREA CODE, OF REGISTRANT'S 214-670-2175
PRINCIPAL EXECUTIVE OFFICES) (ADDRESS, INCLUDING ZIP CODE, OF
REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES AND AGENT
FOR SERVICE)
WILLIAM T. SATTERWHITE, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
ENSERCH CENTER
300 SOUTH ST. PAUL STREET
DALLAS, TEXAS 75201
214-670-2175
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
ARNOLD H. TRACY
MUDGE ROSE GUTHRIE ALEXANDER & FERDON
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES AMOUNT TO BE PER OFFERING PRICE REGISTRATION
TO BE REGISTERED REGISTERED(1) UNIT(1)(2)(3) (1)(2)(3) FEE(1)
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<S> <C> <C> <C> <C>
ENSERCH Corporation Debt
Securities.............
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ENSERCH Corporation
Preferred Stock, of no
par value..............
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ENSERCH Corporation
Depositary Shares......
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ENSERCH Corporation
Common Stock, par value
$4.45 per share........
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Enserch Capital L.L.C.
Preferred Securities ..
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ENSERCH Corporation
Backup Undertakings
with respect to Enserch
Capital L.L.C.
Preferred
Securities(5)..........
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Total................... $450,000,000 100% $450,000,000 $155,174
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</TABLE>
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(1) There are being registered hereunder such presently indeterminate
principal amount or number of Debt Securities (which may be senior or
subordinated), shares of Preferred Stock, Depositary Shares and shares of
Common Stock of ENSERCH Corporation and Preferred Securities of Enserch
Capital L.L.C. with an aggregate initial offering price not to exceed
$450,000,000, plus (i) contingent share purchase rights attached to and
evidenced by the Common Stock and (ii) an indeterminate number of shares
as may be issued upon conversion of Debt Securities or Preferred Stock for
which, in each case, no separate consideration will be received. Pursuant
to Rule 457(o) under the Securities Act of 1933 which permits the
registration fee to be calculated on the basis of the maximum offering
price of all the securities listed, the table does not specify by each
class information as to the amount to be registered, proposed maximum
offering price per Unit or proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and dividends, if any.
(4) If any Debt Securities are issued (i) with a principal amount denominated
in a foreign currency, such principal amount as shall result in an
aggregate initial offering price of up to $450,000,000 at the time of
initial offering, or (ii) at an original issue discount, such greater
principal amount as shall result in an aggregate initial offering price of
up to $450,000,000.
(5) No separate consideration will be received for the ENSERCH Corporation
Backup Undertakings offered with respect to Enserch Capital L.L.C.
Preferred Securities.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE 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 STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION--DATED MARCH 7, 1994
PROSPECTUS
U.S. $450,000,000
ENSERCH CORPORATION
DEBT SECURITIES, PREFERRED STOCK
AND COMMON STOCK
ENSERCH CAPITAL L.L.C. PREFERRED SECURITIES
ENSERCH Corporation ("ENSERCH" or the "Corporation") may offer from time to
time in one or more series, together or separately, as shall be designated by
ENSERCH (i) debt securities (the "Debt Securities") which may be either senior
debt securities (the "Senior Debt Securities") or subordinated debt securities
(the "Subordinated Debt Securities") which, in the case of Subordinated Debt
Securities, may be convertible into the Corporation's Common Stock, $4.45 par
value (the "Common Stock"), (ii) shares of its preferred stock, of no par value
(the "Preferred Stock"), which may be issued in the form of Depositary Shares
evidenced by Depositary Receipts, and (iii) shares of its Common Stock. Enserch
Capital L.L.C. ("Enserch Capital"), a Delaware limited liability company and a
special purpose subsidiary of ENSERCH, may also offer, from time to time, its
preferred limited liability company interests ("EC Preferred Securities"), in
one or more series. In connection therewith, ENSERCH may offer back-up
undertakings ("Backup Undertakings") with respect to the EC Preferred
Securities, as described herein under "Enserch Capital L.L.C." The Debt
Securities, Preferred Stock, Common Stock, and EC Preferred Securities and any
related Backup Undertakings are collectively called the "Securities." The
Securities may be offered in amounts, at prices and on terms to be determined
at the time of offering, provided, however, that the aggregate initial public
offering price of all Securities shall not exceed U.S. $450,000,000 (or its
equivalent, based on the applicable exchange rate at the time of sale, in one
or more foreign currencies, currency units or composite currencies). Certain
specific terms of the particular Securities in respect of which this Prospectus
is being delivered will be set forth in the accompanying Prospectus Supplement
(the "Prospectus Supplement"), including where applicable, in the case of Debt
Securities: the specific title, aggregate principal amount, the denomination,
maturity, premium, if any, the interest rate (which may be fixed, floating or
adjustable), the time and method of calculating payment of interest, if any,
the place or places where principal of (and premium, if any) and interest, if
any, on such Debt Securities will be payable, the currency in which principal
of (and premium, if any) and interest, if any, on such Debt Securities shall be
payable, any terms of redemption at the option of ENSERCH or the holder, any
sinking fund provisions, terms for any conversion or exchange into other
securities, the initial public offering price and other special terms; and, in
the case of Preferred Stock and EC Preferred Securities, the specific title,
the aggregate amount, any dividends (including the method of calculating
payment of such dividends), liquidation, redemption, any voting and other
rights, terms for any conversion or exchange of the Preferred Stock into other
securities, the initial public offering price and any other special terms. The
Senior Debt Securities when issued will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Corporation. The Subordinated
Debt Securities when issued will be unsecured and subordinated to all present
and future Senior Indebtedness of the Corporation. If so specified in the
applicable Prospectus Supplement, Debt Securities of a series may be issued in
whole or in part in the form of one or more temporary or permanent global
Securities. ENSERCH's Common Stock is listed on the New York Stock Exchange,
the Midwest Stock Exchange and the London Stock Exchange. Any Common Stock sold
pursuant to a Prospectus Supplement will be listed on such exchanges, subject
to official notice of issuance.
The Prospectus Supplement will contain information concerning certain United
States federal income tax considerations, if applicable to the Securities
offered.
The Securities will be sold directly, through agents, underwriters or dealers
as designated from time to time, or through a combination of such methods. If
agents of ENSERCH or any dealers or underwriters are involved in the sale of
the Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable commissions or
discounts will be set forth in or may be calculated from the Prospectus
Supplement with respect to such Securities.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES 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 , 1994.
<PAGE>
AVAILABLE INFORMATION
ENSERCH is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Corporation can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: 7 World Trade Center, New York, New York 10048; and
500 West Madison Street, Chicago, Illinois 60661-2511. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Corporation's Common Stock is listed on, and reports, proxy statements and
other information concerning the Corporation may also be inspected at the
offices of, the New York Stock Exchange, 20 Broad Street, New York, New York
and the Midwest Stock Exchange, 440 South LaSalle Street, Chicago, Illinois
60605.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (herein, together with all amendments and
exhibits thereto, referred to as the "Registration Statement"), which the
Corporation has filed with the Commission under the Securities Act of 1933 (the
"Securities Act"). Statements contained or incorporated by reference herein
concerning the provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
Registration Statement.
No separate financial statements of Enserch Capital have been included
herein. ENSERCH and Enserch Capital do not consider that such financial
statements would be material to holders of EC Preferred Shares because Enserch
Capital is a newly organized special purpose entity, has no operating history
and no independent operations and is not engaged in, and does not propose to
engage in, any activity other than the issuance of its limited liability
company interests and the lending of the proceeds thereof to ENSERCH. See
"Enserch Capital L.L.C." Enserch Capital is a limited liability company
organized under the laws of the State of Delaware and will be managed by
ENSERCH, which beneficially owns all of Enserch Capital's limited liability
company interests (other than the EC Preferred Securities) which are non-
transferable.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Corporation with the
Commission pursuant to the Exchange Act (File No. 1-3183) and are incorporated
herein by reference:
1. The Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992;
2. The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1993, June 30, 1993, and September 30, 1993; and
3. The Corporation's Current Reports on Form 8-K dated October 18, 1993,
November 17, 1993, December 22, 1993, January 18, 1994, February 9, 1994,
and March 3, 1994.
All documents filed by the Corporation 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 securities offered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing such documents. Any statement contained herein
or in a document all or a portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
2
<PAGE>
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
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.
Any person receiving a copy of this Prospectus may obtain without charge,
upon request, a copy of any of the documents incorporated herein by reference
(not including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to Mr. M. G. Fortado, Vice President, Corporate
Secretary and Assistant General Counsel, at 300 South St. Paul Street, Dallas,
Texas 75201-5589 (tel. 214-670-2649).
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, IN CONNECTION WITH THE OFFERING
CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR BY ANY
UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES
OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER WOULD BE
UNLAWFUL OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE THEREOF OR, IN THE CASE OF INFORMATION INCORPORATED HEREIN BY
REFERENCE, THE DATE OF FILING WITH THE COMMISSION.
THE CORPORATION
GENERAL
ENSERCH is an integrated company focused on natural gas. It is the successor
to a company originally organized in 1909 for the purpose of providing natural
gas service to North Texas. The Corporation's operations include the following:
. Natural Gas Transmission and Distribution--Owning and operating
interconnected natural gas transmission pipelines, gathering lines,
underground gas storage reservoirs, compressor stations, distribution
systems and related properties; transporting, distributing and selling
natural gas to residential, commercial, industrial, electric-generation,
pipeline and other customers; and compressing natural gas for motor vehicle
usage. (Lone Star Gas Company, a division of the Corporation, Enserch Gas
Company, and related operations.)
. Natural Gas and Oil Exploration and Production--Exploring for,
developing, producing and marketing natural gas and oil. (Enserch
Exploration, Inc., Enserch Exploration Partners, Ltd. [more than 99%
owned], Enserch International Exploration, Inc., and related operations.)
. Natural Gas Liquids Processing--Gathering natural gas, processing
natural gas to produce liquids and marketing the products. (Enserch
Processing Partners, Ltd.)
. Power and Other--Developing, operating and maintaining independent
electric generation power plants and cogeneration facilities; and
furnishing energy services under long-term contracts to large building
complexes, such as universities and medical centers. (Enserch Development
Corporation and Lone Star Energy Company) Providing environmental
engineering and contracting services from initial site assessment and
feasibility studies to designs, actions and remediation (Enserch
Environmental Corporation).
The Corporation's principal executive offices are located at 300 South St.
Paul Street, Dallas, Texas 75201, and its telephone number is (214) 651-8700.
3
<PAGE>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following ratios have been restated to give effect to the discontinuance
of the Corporation's engineering and construction business segment:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
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1993 1992 1991 1990 1989
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<S> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to fixed charges....... .93 1.02 1.49 1.80 1.76
Consolidated ratio of earnings to combined fixed
charges and preferred stock dividends................ .82 .92 1.25 1.54 1.50
</TABLE>
For purposes of computing the foregoing ratios: (i) "fixed charges" represent
interest expense, capitalized interest and the portion of rental expense
representing the interest factor, and (ii) "earnings" represent the aggregate
of income from continuing operations before extraordinary items, income taxes,
amortization of previously capitalized interest and fixed charges deducted from
earnings, on a total enterprise basis.
For the purposes of calculating the ratio of earnings to combined fixed
charges and preferred stock dividends, the preferred stock dividend
requirements were assumed to be equal to the pretax earnings which would be
required to cover such dividend requirements computed using the effective tax
rates for the applicable period to the extent not antidilutive.
For the year ended December 31, 1993, fixed charges exceeded earnings by $6.6
million. For the years ended December 31, 1993 and 1992, combined fixed charges
and preferred stock dividends exceeded earnings by $19.3 million and $10.3
million, respectively.
For the year 1993, excluding unusual charges (adverse judgment in litigation,
write-off of non U.S. gas and oil assets, charge for efficiency enhancements
and severance expenses, and the tax rate change) the ratio of earnings to fixed
charges would have been 1.71 and ratio of earnings to combined fixed charges
and preferred dividends would have been 1.42.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds to
be received by the Corporation from the sale of the Securities will be used to
repay and refinance indebtedness of the Corporation. Pending use for these
purposes, the Corporation may invest proceeds from the sale of the Securities
in short-term obligations.
DESCRIPTION OF THE DEBT SECURITIES
Senior Debt Securities may be issued from time to time in one or more series
under an Indenture dated as of February 15, 1992 (the "Senior Indenture"),
between the Corporation and The First National Bank of Chicago, as Trustee (the
"Senior Trustee"). Subordinated Debt Securities may be issued from time to time
in one or more series under an indenture (the "Subordinated Indenture") to be
entered into between the Corporation and The First National Bank of Chicago, as
Trustee (the "Subordinated Trustee"). The Senior Indenture and the Subordinated
Indenture are sometimes referred to collectively as the "Indentures," and the
Senior Trustee and the Subordinated Trustee are sometimes referred to
collectively as the "Trustees." As used under this caption, unless the context
otherwise requires, "debt securities" in lower case shall mean all debt
securities issued or issuable, as the case may be, under the respective
Indentures, and "Debt Securities" with initial capital letters shall mean the
Debt Securities covered by this Prospectus and any Prospectus Supplement. The
statements under this caption are brief summaries of certain provisions
contained in the Indentures, do not purport to be complete and are qualified in
their entirety by reference to the Indentures, including the definition therein
of certain terms, copies of which are filed as exhibits to the Registration
Statement, as amended, of which this Prospectus is a part.
4
<PAGE>
Whenever particular provisions or defined terms in the Indentures are
referred to therein, such provisions or defined terms are incorporated by
reference herein. Section and Article references used herein are references to
provisions of both the Senior Indenture and Subordinated Indenture unless
otherwise noted.
GENERAL
Each Indenture provides for the issuance of debt securities in one or more
series, and does not limit the principal amount of debt securities which may be
issued thereunder.
Reference is made to the Prospectus Supplement for the following terms of the
Debt Securities being offered hereby: (1) the specific title of the Debt
Securities; (2) whether the Debt Securities are Senior Debt Securities or
Subordinated Debt Securities; (3) the aggregate principal amount of the Debt
Securities; (4) the percentage of their principal amount at which the Debt
Securities will be issued; (5) the date on which the Debt Securities will
mature; (6) the rate or rates per annum or the method for determining such rate
or rates, if any, at which the Debt Securities will bear interest; (7) the
times at which any such interest will be payable; (8) any provisions relating
to optional or mandatory redemption of the Debt Securities; (9) the
denominations in which the Debt Securities are authorized to be issued; (10)
any provisions relating to the conversion or exchange of the Debt Securities
into debt securities of another series; (11) the foreign currency or units of
two or more of such foreign currencies in which the Debt Securities are
denominated, if other than United States dollars, and the currency in which
interest is payable if other than the currency in which the Debt Securities are
denominated; (12) the place or places at which the Corporation will make
payments of principal (and premium, if any) and interest, if any, and the
method of such payment; (13) whether the Debt Securities will be issued in
whole or in part in the form of one or more global Debt Securities and, in such
case, the depository for such Debt Security or Debt Securities; (14) the person
to whom any interest on a Debt Security of such series will be payable, if
other than the person in whose name that Debt Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest; (15) the extent to which, or the manner in
which, any interest payable on a global Debt Security on an Interest Payment
Date will be paid; (16) with respect to the Subordinated Debt Securities only,
whether such Securities will be convertible into or exchangeable for Common
Stock or any other shares of the capital stock or securities of the Corporation
and, if so, the terms and conditions upon which such conversion will be
effected including the initial conversion price or rate and the conversion
period; (17) any additional covenants and Events of Default and the remedies
with respect thereto not currently set forth in the respective Indenture; and
(18) any other specific terms of the Debt Securities. (Section 301).
If the principal of, premium, if any, or interest on Debt Securities of any
series are payable in a foreign or composite currency, or if any index or
formula is used to determine the amount of payment of principal of, premium, if
any, or interest on any series of Debt Securities, any specific federal income
tax, accounting and other considerations applicable thereto will be described
in the Prospectus Supplement relating to that series.
One or more series of Debt Securities may be sold at a substantial discount
below its or their stated principal amount, bearing no interest or interest at
a rate that at the time of issuance is below market rate. Federal income tax
consequences and other special considerations applicable to any such series
will be described in the Prospectus Supplement relating thereto.
SUBORDINATED DEBT SECURITIES
Subordination. The obligations of the Corporation pursuant to the
Subordinated Debt Securities will be subordinate in right of payment, to the
extent set forth in the Subordinated Indenture, to all Senior Indebtedness of
the Corporation. (Subordinated Indenture--Article XIV). Upon the maturity of
principal of any Senior Indebtedness by lapse of time, acceleration or
otherwise, no payments, including sinking fund payments, may be made on the
Subordinated Debt Securities and no Subordinated Debt Securities may be
acquired until all principal of and premium, if any, and interest on all such
matured Senior Indebtedness
5
<PAGE>
shall have been paid in full. (Subordinated Indenture--Section 1403). "Senior
Indebtedness" of the Corporation is defined to mean the principal of and
premium, if any, and interest on the indebtedness (other than the Subordinated
Debt Securities) of the Corporation, whether outstanding on the date of the
Subordinated Indenture or thereafter created, incurred, assumed or guaranteed
to others, (a) for money borrowed from or guaranteed to others, (b) under
promissory notes or debentures, bonds or other instruments of indebtedness
issued under the provisions of or pursuant to an indenture, agreement, or
similar instrument, or (c) for the payment of money relating to the lease of
any property which lease may be capitalized on the consolidated balance sheet
of the Corporation and its Subsidiaries in accordance with generally accepted
accounting principles as in effect from time to time and, in each such case,
all renewals, extensions, refundings, amendments or modifications thereof,
except for the Corporation's 6 3/8% Convertible Subordinated Debentures due
2002; unless, in each case, by the terms of the instrument creating or
evidencing the indebtedness it is provided that such indebtedness is not
superior in right of payment to the Subordinated Debt Securities. (Subordinated
Indenture--Section 101). The Subordinated Indenture does not limit the
aggregate amount of Senior Indebtedness which may be issued. As of December 31,
1993, Senior Indebtedness of the Corporation aggregated approximately $639
million.
Conversion of Subordinated Debt. The applicable Prospectus Supplement will
provide whether the Subordinated Debt Securities of a series will be
convertible and, if so, the initial conversion price per share at which such
convertible Subordinated Debt Securities will be convertible into Common Stock.
Subject to prior redemption of the convertible Subordinated Debt Securities,
the holders of such Subordinated Debt Securities will be entitled at any time
on or before the close of business on the maturity date thereof to convert such
Subordinated Debt Securities (or, in the case of convertible Subordinated Debt
Securities of denominations in excess of $1,000 any portion of which is $1,000
or an integral multiple of $1,000) into shares of Common Stock at the initial
conversion price set forth in the applicable Prospectus Supplement. No
adjustment will be made on conversion of any convertible Subordinated Debt
Securities for interest accrued thereon or, except as set forth below, for
dividends on any securities issued upon such conversion. (Subordinated
Indenture--Section 1301).
In order to exercise the right of conversion, the holder of any such
convertible Subordinated Debt Securities must surrender his convertible
Subordinated Debt Securities to the Corporation at any office or agency of the
Corporation maintained for such purpose. The convertible Subordinated Debt
Securities to be surrendered must be accompanied by written notice to the
Corporation that the holder elects to convert such Subordinated Debt
Securities.
If any convertible Subordinated Debt Security, whether or not called for
redemption, is converted between a record date for the payment of interest and
the next succeeding interest payment date, such convertible Subordinated Debt
Security must be accompanied by funds payable to the Corporation equal to the
interest payable to the registered holder on such interest payment date on the
principal amount so converted. In the case of any convertible Subordinated Debt
Security or portion thereof called for redemption, conversion rights expire at
the close of business on the Redemption Date, even if such redemption occurs at
a time when conversion of the Subordinated Debt Security portion thereof is in
the best interests of the holder. (Subordinated Indenture--Section 1302).
No fractional shares of Common Stock will be issued upon conversion but, in
lieu thereof, an adjustment in cash will be made based on the market price of
Common Stock at the close of business on the date of conversion. (Subordinated
Indenture--Section 1303).
The Conversion Price will be subject to adjustment in the event of: (i) the
payment of certain stock dividends on the Common Stock; (ii) the issuance of
certain rights or warrants to all holders of the Common Stock entitling them to
subscribe for or purchase Common Stock at a price less than the market price;
(iii) the subdivision of Common Stock into a greater number of shares of Common
Stock or the combination of Common Stock into a smaller number of shares of
Common Stock; (iv) the distribution by the Corporation to all holders of the
Common Stock of evidences of indebtedness or assets of the Corporation
(excluding rights
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or warrants and any dividends or distributions mentioned above); and (v) the
reclassification of Common Stock into other securities. However, no adjustment
in the Conversion Price will be required unless such adjustment would require
an increase or decrease of at least 1% in the Conversion Price. (Subordinated
Indenture--Section 1304).
In case of certain consolidations or mergers to which the Corporation is a
party or the transfer of substantially all of the assets of the Corporation,
each convertible Subordinated Debt Security then outstanding would, without the
consent of any holders of the convertible Subordinated Debt Securities, become
convertible only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a holder of
the number of shares of Common Stock into which such convertible Subordinated
Debt Security might have been converted immediately prior to such
consolidation, merger or transfer (assuming such holder of Common Stock failed
to exercise any rights of election and received per share the kind and amount
received per share by a plurality of non-electing shares). (Subordinated
Indenture--Section 1311).
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in certificated or global form.
Debt Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by the Corporation
for such purpose with respect to any series of Debt Securities and referred to
in an applicable Prospectus Supplement, without service charge and upon payment
of any taxes and other governmental charges as described in the relevant
Indenture. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The
Corporation has appointed the Senior Trustee as Security Registrar with respect
to the Senior Debt Securities and the Subordinated Trustee as Security
Registrar with respect to the Subordinated Debt Securities. (Section 305). If a
Prospectus Supplement refers to any transfer agents (in addition to the
Security Registrar) initially designated by the Corporation with respect to any
series of Debt Securities, the Corporation may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Corporation will be
required to maintain a transfer agent in each Place of Payment for such series.
(Section 1002). The Corporation may at any time designate additional transfer
agents with respect to any series of Debt Securities.
In the event of any redemption in part, the Corporation shall not be required
to (i) issue, register the transfer of or exchange any Debt Security during a
period beginning at the opening of business 15 days before any selection for
redemption of Debt Securities of like tenor and of the series of which such
Debt Security is a part, and ending at the close of business on the earliest
date in which the relevant notice of redemption is deemed to have been given to
all holders of Debt Securities of like tenor and of such series to be redeemed
and (ii) register the transfer of or exchange any Debt Security so selected for
redemption, in whole or in part, except the unredeemed portion of any Debt
Security being redeemed in part. (Sections 305 and 1103).
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and premium (if any) on any Debt Security will be made only
against surrender to the Paying Agent of such Debt Security. Unless otherwise
indicated in an applicable Prospectus Supplement, principal of and any premium
and interest, if any, on Debt Securities will be payable, subject to any
applicable laws and regulations, at the office of such Paying Agent or Paying
Agents as the Corporation may designate from time to time, except that at the
option of the Corporation payment of any interest may be made by check mailed
to the address of the person entitled thereto as such address shall appear in
the Security Register with respect to such Debt Securities. (Section 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on a Debt Security on any Interest Payment Date will be made to the
person in whose name such Debt Security (or Predecessor Security) is registered
at the close of business on the Regular Record Date for such interest. (Section
307).
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Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the related Trustee in the City of Chicago will be
designated as the Corporation's sole Paying Agent for payments with respect to
Debt Securities of each series. (Sections 101 and 1002). Any Paying Agents
outside the United States and any other Paying Agents in the United States
initially designated by the Corporation for the respective Debt Securities will
be named in an applicable Prospectus Supplement. (Section 301). The Corporation
may at any time designate additional Paying Agents or rescind the designation
of any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that the Corporation will be required to maintain a Paying
Agent in each Place of Payment for each series of the respective Debt
Securities. (Section 1002).
All moneys paid by the Corporation to a Paying Agent for the payment of the
principal of and premium or interest, if any, on any Debt Security of any
series which remain unclaimed at the end of two years after such principal,
premium, if any, or interest shall have become due and payable will be repaid
to the Corporation and the holder of such Debt Security will thereafter look
only to the Corporation for payment thereof. (Section 1003).
GLOBAL DEBT SECURITIES
If any Debt Securities of a series are issuable in global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such global Debt Security may
exchange such interests for Debt Securities of such series and of like tenor
and principal amount in any authorized form and denomination. Principal of and
any premium and interest on a global Debt Security will be payable in the
manner described in the applicable Prospectus Supplement. (Section 301).
The specific terms of the depository arrangement with respect to any portion
of a series of Debt Securities to be represented by a global Debt Security will
be described in the applicable Prospectus Supplement.
MODIFICATION OF THE INDENTURES
The Indentures contain provisions permitting the Corporation and the
respective Trustees, with the consent of the holders of not less than a
majority in principal amount of the debt securities which are affected by the
modification, to modify the particular Indenture or any supplemental indenture
or the rights of the holders of the debt securities issued under such
Indenture; provided that no such modification may, without the consent of the
holder of each outstanding debt security affected thereby, (a) change the
stated maturity date of the principal of, or any installment of principal of or
interest, if any, on, any Debt Security, (b) reduce the principal amount of, or
premium or rate of interest, if any, on, any Debt Security, (c) reduce the
amount of principal of an original issue discount Debt Security payable upon
acceleration of the maturity thereof, (d) change the place or currency of
payment of principal of, or premium or interest, if any, on, any Debt Security,
(e) impair the right to institute suit for the enforcement of any payment on or
with respect to any Debt Security, or (f) reduce the percentage in principal
amount of Outstanding Debt Securities of any series, the consent of the holders
of which is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults. (Section 902).
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series is defined
in the Indentures as being; default for 30 days in payment of any interest on
Debt Securities of such series; default in payment of principal of (or premium,
if any, on) Debt Securities of such series; default in payment of any mandatory
sinking fund payment required by the Debt Securities of such series; default
for 60 days after notice in the performance of any other covenant in the Debt
Securities of such series or in the Indentures or certain events of bankruptcy,
insolvency or reorganization. The Senior Indenture (but not the Subordinated
Indenture) also defines an Event of Default with respect to Senior Debt
Securities of any series to be a default which involves the failure by the
Corporation to pay when due the principal of any indebtedness for money
borrowed by the
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Corporation in excess of $25 million or which results in the acceleration of
any such indebtedness in excess of $25 million, if such indebtedness is not
discharged, or such acceleration is not rescinded or annulled, within 10 days
after written notice as provided in the Senior Indenture. In case an Event of
Default with respect to Debt Securities of any series shall occur and be
continuing, the respective Trustees or the holders of not less than 25% in
principal amount of the Debt Securities of such series then outstanding may
declare the principal of all such Debt Securities to be due and payable. The
Corporation is required to furnish to the Senior Trustee and the Subordinated
Trustee annually a statement as to the performance by the Corporation of its
obligations under the respective Indentures and as to any default in such
performance. Under certain circumstances any declaration of acceleration with
respect to Debt Securities of any series may be rescinded and past defaults
(except, unless theretofore cured, a default in the payment of principal of or
interest on the Debt Securities) may be waived by the holders of a majority in
the aggregate principal amount of the Debt Securities of such series then
outstanding. The Indentures provide that the Trustees may withhold notice to
the holders of the respective Debt Securities of any series of any continuing
default (except in the payment of the principal (other than any mandatory
sinking fund payment) of (or premium, if any) or interest on any Debt
Securities of such series) if such Trustee considers it in the interest of
holders of such series of Debt Securities to do so. (Section 501).
SENIOR INDENTURE RESTRICTIVE COVENANT--LIMITATION ON LIENS
The Senior Indenture (but not the Subordinated Indenture) provides that the
Corporation will not create, assume or suffer to exist, and will not permit any
subsidiary to create, assume or suffer to exist, except in favor of the
Corporation, any mortgage, pledge or other lien or encumbrance on any of its
properties or assets (including stock and other securities of subsidiaries)
without making effective provision to secure equally and ratably the Senior
Debt Securities then outstanding and other indebtedness entitled to be so
secured, except that the Corporation or a subsidiary, without so securing the
Senior Debt Securities, may create, assume or suffer to exist (a) certain
purchase money and existing liens in connection with property acquisitions and
the extension, renewal or refunding of the same, (b) pledges of current assets,
in the ordinary course of business to secure current liabilities, (c) liens on
property to secure obligations to pay all or part of the purchase price of such
property only out of or measured by oil or gas production or the proceeds
thereof, or liens upon production from oil or gas property or the proceeds of
such production, to secure obligations to pay all or part of the expenses of
exploration, drilling or development of such property only out of such
production or proceeds, (d) mechanics' or materialmen's liens, certain good
faith deposits, deposits to secure public or statutory obligations, deposits to
secure, or in lieu of, surety, stay or appeal bonds, and deposits as security
for payment of taxes, assessments or similar charges and liens or security
interests created in connection with bid or completion bonds, (e) liens arising
by reason of deposits with, or the giving of security to, a governmental agency
as a condition to the transaction of business or the exercise of a privilege,
or deposits to enable the Corporation or a subsidiary to maintain self-
insurance or participate in any funds established to cover any insurance risks,
or in connection with workmen's compensation, unemployment insurance, old age
pension or other social security, (f) pledges or assignments of accounts
receivable, including customers' instalment paper, to banks or others
(including to or by any subsidiary which is principally engaged in the business
of financing the business of the Corporation and its subsidiaries) made in the
ordinary course of business, (g) liens of taxes or assessments for the current
year or not due or being contested in good faith and against which an adequate
reserve has been established, (h) judgments or liens the finality of which is
being contested and execution on which is stayed, (i) assessments or similar
encumbrances the existence of which does not impair the use of the property
subject thereto for the purposes for which it was acquired, (j) certain
landlords' liens so long as the rent secured thereby is not in default, and (k)
liens on the assets of any limited liability company organized under a limited
liability company act of any State which limited liability company is treated
as a partnership for federal income tax purposes. (Senior Indenture--Section
1006).
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indentures provide that the Corporation may not consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless (i) the
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successor Person shall be organized and existing under the laws of the United
States or any State thereof or the District of Columbia, and shall expressly
assume by a supplemental indenture the due and punctual payment of the
principal of, any premium on, and any interest on, all the Debt Securities and
the performance of every covenant in such Indenture on the part of the
Corporation to be performed or observed; (ii) 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 happened
and be continuing; and (iii) the Corporation shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance or transfer and such supplemental
indenture comply with the foregoing provisions relating to such transaction. In
case of any such consolidation, merger, conveyance or transfer, such successor
Person will succeed to and be substituted for the Corporation as obligor on the
Debt Securities, with the same effect as if it had been named in the Indenture
as the Corporation. (Section 801).
The Indentures do not contain any other covenant which restricts the
Corporation's ability to merge or consolidate with any other corporation, sell
or convey all or substantially all of its assets to any persons, firm or
corporation or otherwise engage in restructuring transactions. Further, the
Indentures do not contain any provisions which would provide protection to
holders of Debt Securities against a sudden and dramatic decline in credit
quality resulting from a takeover, a recapitalization or similar restructuring
of the Corporation.
TITLE
The Corporation, the Trustees and any agent of the Corporation or the
relevant Trustee may treat the registered owner of any Debt Security as the
absolute owner thereof (whether or not such Debt Security shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308).
DEFEASANCE AND DISCHARGE
Under the terms of the Indentures, the Corporation will be discharged from
any and all obligations in respect of the Debt Securities of any series (except
in each case for certain obligations to register the transfer or exchange of
Debt Securities, replace stolen, lost or mutilated Debt Securities, maintain
paying agencies and hold moneys for payment in trust) if the Corporation
deposits with the Trustee, in trust, (i) money; (ii) U.S. Government Securities
(as defined) or, in the case of Debt Securities denominated in a foreign
currency, Foreign Government Securities (as defined) which through the payment
of Interest thereon and principal thereof in accordance with their terms will
provide money; or (iii) any combination of (i) and (ii) above, in an amount
sufficient to pay all the principal (including any mandatory sinking fund
payments) of, and interest on, the Debt Securities of such series on the dates
such payments are due in accordance with the terms of such Debt Securities.
Such defeasance and discharge will become effective 91 days after the
Corporation, among other things, has delivered to the Trustee an Opinion of
Counsel to the effect that (i) the deposit and related defeasance would not
cause the holders of the Debt Securities of such series to recognize income,
gain or loss for Federal income tax purposes, or a copy of a ruling or other
formal statement or action to such effect received from or published by the
United States Internal Revenue Service; and (ii) the trust resulting from the
defeasance will not constitute, or is qualified as, a regulated investment
company under the Investment Company Act of 1940, as amended. (Section 403).
REPLACEMENT OF DEBT SECURITIES
Any mutilated Debt Security will be replaced by the Corporation at the
expense of the holder upon surrender of such Debt Security to the relevant
Trustee. Debt Securities that become destroyed, lost or stolen will be replaced
by the Corporation at the expense of the holder upon delivery to the relevant
Trustee of evidence of the destruction, loss or theft thereof satisfactory to
the Corporation and the relevant Trustee. In the case of a destroyed, lost or
stolen Debt Security, an indemnity satisfactory to the relevant Trustee and the
Corporation may be required at the expense of the holder of such Debt Security
before a replacement Debt Security will be issued. (Section 306).
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GOVERNING LAW
The Senior Indenture is, and the Subordinated Indenture and the Debt
Securities will be, governed by, and construed in accordance with, the laws of
the State of Texas. (Section 112).
INFORMATION CONCERNING THE TRUSTEES
Subject to the provisions of the relevant Indenture relating to its duties,
each Trustee will be under no obligation to exercise any of its rights or
powers under such Indenture at the request, order or direction of any of the
holders thereunder, unless such holders shall have offered to such Trustee
reasonable indemnity. Subject to such provision for indemnification, the
holders of a majority in principal amount of the debt securities then
outstanding thereunder will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee
thereunder, or exercising any trust or power conferred on such Trustee.
(Section 601).
The Indentures contain limitations on the right of the Trustee, as a creditor
of the Corporation to obtain payment of claims in certain cases, or to realize
on certain property received in respect of any such claim as security or
otherwise. In addition, the Trustee may be deemed to have a conflicting
interest and may be required to resign as Trustee if at the time of a default
under the Indentures it is a creditor of the Corporation.
The First National Bank of Chicago, the Trustee under each Indenture, has
from time to time engaged in transactions with, or performed services for
ENSERCH in the ordinary course of business.
DESCRIPTION OF ENSERCH CAPITAL STOCK
The following description of the capital stock does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the more complete descriptions thereof set forth in (a) the Corporation's
Restated Articles of Incorporation, as amended, and the Rights Agreement, dated
as of April 15, 1986, between the Corporation and Harris Trust Company of New
York, as Rights Agent, both of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part, and (b) the
Statement of Resolutions relating to each series of Preferred Stock, which will
be filed with the Commission at or prior to the time of the offering of such
series of Preferred Stock. A form of Statement of Resolutions is filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
The Corporation is currently authorized by its Restated Articles of
Incorporation to issue 100,000,000 shares of Common Stock, of $4.45 par value,
2,000,000 shares of preferred stock, of no par value (the "preferred stock"),
and 2,000,000 shares of Voting Preference Stock, of no par value. The Board of
Directors has authority to divide the preferred stock and Voting Preference
Stock into one or more series and has broad authority to fix and determine the
relative rights and preferences of the shares of each such series.
COMMON STOCK
The Corporation is authorized by its Restated Articles of Incorporation to
issue up to 100,000,000 shares of Common Stock, par value $4.45 per share.
Subject to the rights of the holders of the preferred stock and Voting
Preference Stock which may be outstanding from time to time, holders of Common
Stock are entitled to receive such dividends as are declared by the Board of
Directors from any funds legally available therefor, to one vote for each share
on all matters voted upon by shareholders, including election of directors
(cumulative voting being prohibited), and to share ratably in assets available
for distribution upon any liquidation. Common Stock has no preemptive rights
and is not subject to redemption or to any further call or assessment.
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In April 1986, the Corporation's Board declared a dividend of one Voting
Preference Stock contingent purchase right on each outstanding share of Common
Stock. All shares of Common Stock issued subsequently also include these
rights. Under certain conditions, each right may be exercised to purchase one
two-hundredth of a share of a new series of Voting Preference Stock at an
exercise price of $60. The rights are exercisable only if a person or group
acquires beneficial ownership of 20% or more of the Common Stock or commences a
tender or exchange offer upon consummation of which such person or group would
beneficially own 30% or more of the Common Stock. If any person becomes the
beneficial owner of 30% or more of the Common Stock, or if a 20%-or-more
shareholder engages in certain self-dealing transactions, or if in a merger
transaction with the Corporation in which the Corporation is the surviving
corporation and its Common Stock is not changed or converted, then each right
not owned by such person or related parties will entitle its holder to
purchase, at the right's then current exercise price, shares of Common Stock
(or, in certain circumstances as determined by the Board, other consideration)
having a value of twice the right's exercise price. In addition, if the
Corporation is involved in a merger or other business combination transaction
with another person in which its Common Stock is changed or converted, or sells
50% or more of its assets or earning power to another person, each right will
entitle its holder to purchase, at the right's then-current exercise price,
Common Stock of such other person having a value of twice the right's exercise
price. The rights, which have no voting rights, expire on May 5, 1996. the
Corporation generally will be entitled to redeem the rights at $.05 per right
at any time until the 15th day following public announcement that a 20%
position has been acquired.
Dividend restrictions on Common Stock are contained in several agreements
relating to senior long-term debt and in the Restated Articles of Incorporation
of the Corporation. Pursuant to the Restated Articles of Incorporation, no
dividend (other than a dividend payable in Common Stock) or other distribution
is permitted to be declared or paid on, and no amount is permitted to be
applied to the purchase of, the Common Stock unless (i) full cumulative
dividends for all past dividend periods have been paid or declared and set
apart for payment, and full cumulative dividends for the then current dividend
period have been, or simultaneously therewith are, paid or declared on
outstanding preferred stock and Voting Preference Stock and (ii) after giving
effect to such payment of dividend, other distribution or purchase, the
aggregate capital of the Corporation applicable to all capital stock
outstanding ranking junior to the preferred stock and Voting Preference Stock
as to dividends or assets plus the consolidated earned and capital surplus of
the Corporation and its subsidiaries shall exceed the aggregate amount payable
on involuntary dissolution, liquidation or winding up of the Corporation on all
outstanding shares of the preferred stock and the Voting Preference Stock and
all stock ranking prior to or on a parity with such stock as to dividends or
assets to be outstanding after such payment of dividend, other distribution or
purchase. At December 31, 1993, the Corporation had approximately $342 million
of consolidated common shareholders' equity which was free of such restrictions
after giving pro forma effect to the redemption by the Corporation of all of
its outstanding sinking fund debentures and the Adjustable Rate Cumulative
Preferred Stock, Series D in March, 1994.
The Transfer Agent and Registrar of the Corporation's Common Stock is Harris
Trust Company of New York, New York, New York.
PREFERRED STOCK
The Corporation is currently authorized by its Restated Articles of
Incorporation to issue 2,000,000 shares of preferred stock, of no par value, of
which 1,500,000 shares of Adjustable Rate Cumulative Preferred Stock, Series D,
and 100,000 shares of Adjustable Rate Cumulative Preferred Stock, Series E,
were outstanding on the date of this Prospectus. The Board of Directors has
authority to divide the preferred stock into one or more series and to fix and
determine relative rights and preferences of the shares of each such series.
All series of preferred stock, including any series of Preferred Stock to
which any Prospectus Supplement may relate, shall have the dividend,
liquidation, redemption and voting rights set forth below. Reference is made to
the Prospectus Supplement relating to the particular series of the Preferred
Stock offered thereby for
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specific terms, including: (i) the title of such Preferred Stock and the number
of shares offered; (ii) the amount of liquidation preference per share; (iii)
the price at which such Preferred Stock will be issued; (iv) whether dividends
shall be payable and, if payable, the dividend rate (or method of calculation);
(v) any redemption or sinking fund provisions of such Preferred Stock; (vi) the
terms of any right to convert the Preferred Stock into other securities of the
Corporation; (vii) whether the Corporation has elected to offer Depositary
Shares (as defined below); and (viii) any additional voting, dividend,
liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions of such Preferred Stock.
The Preferred Stock offered by any Prospectus Supplement will, when issued,
be fully paid and nonassessable and have no preemptive rights.
As described under "Depositary Shares" below, the Corporation may, at its
option, elect to offer depositary shares evidenced by depositary receipts, each
representing a fraction (to be specified in the Prospectus Supplement relating
to the particular series of Preferred Stock) of a share of the particular
series of the Preferred Stock issued and deposited with a depositary, in lieu
of offering full shares of such series of the Preferred Stock.
Dividends. To the extent that the applicable Prospectus Supplement provides
that dividends shall be paid on a series of Preferred Stock, the holders of
shares of such series of Preferred Stock will be entitled to receive, when and
as declared by the Board of Directors of the Corporation out of assets of the
Corporation legally available therefor, cumulative cash dividends at the rate
per share set forth in the applicable Prospectus Supplement. Dividends on such
series of Preferred Stock will accrue from the date of original issuance and
will be paid quarterly on the first day of February, May, August and November
(the "Quarterly Dividend Payment Dates") commencing on the Quarterly Dividend
Payment Date next succeeding the expiration of 30 days after the date of
initial issue of any shares of such series.
No dividends (other than a dividend payable in Common Stock) shall be paid or
other distribution made on shares of the Common Stock or on any other class of
stock ranking junior to the preferred stock as to dividends or assets, nor
shall any shares of the Common Stock or other junior stock be purchased or
redeemed, unless (i) all dividends on the outstanding preferred stock for all
past quarterly dividend periods have been paid or declared and set apart for
payment, and all dividends on the preferred stock for the current period have
been paid or declared and set apart for payment, and (ii) after giving effect
to such payment of dividends, other distributions, purchase or redemption, the
aggregate capital of the Corporation applicable to all capital stock
outstanding ranking junior to the preferred stock as to dividends or assets,
plus the consolidated earned and capital surplus of the Corporation and its
subsidiaries, shall exceed the aggregate amount payable on involuntary
dissolution, liquidation or winding up of the Corporation on all shares of the
preferred stock and all stock ranking prior to or on a parity with the
preferred stock as to dividends or assets to be outstanding after such payment
of dividends, other distribution, purchase or redemption. Dividends may not be
paid on any one series of preferred stock unless dividends have been or are
contemporaneously paid or declared on the preferred stock on all series
entitled thereto.
Several agreements relating to senior long-term debt also contain
restrictions on distributions on capital stock of the Corporation. At December
31, 1993, the Corporation had approximately $342 million of consolidated common
shareholders' equity which was free of such restrictions after giving pro forma
effect to the redemption by the Corporation of all of its outstanding sinking
fund debentures and the Adjustable Rate Cumulative Preferred Stock, Series D in
March 1994.
Voting Rights. Except as indicated in the Prospectus Supplement relating to a
particular series of Preferred Stock, or except as expressly required by
applicable law, the holders of shares of each series of Preferred Stock will
have no ordinary voting rights. However, without the approval of the holders of
shares representing at least two-thirds of the votes entitled to be cast by the
preferred stock, the Corporation may not amend its Restated Articles of
Incorporation to (1) create, or increase the number of authorized shares of, a
class of stock ranking prior to or on a parity with the preferred stock as to
dividends or assets; (2)
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increase the authorized number of shares of preferred stock; and (3) change any
of the rights or preferences of outstanding preferred stock or any series
thereof. Rights and preferences of any outstanding series, which vary from the
rights and preferences of other outstanding series, may not be changed without
the approval of the holders of shares representing at least two-thirds of the
votes entitled to be cast by such series. In addition, holders of preferred
stock have the right to elect two directors if cumulative dividend payments
shall not have been paid for six quarterly dividend periods, and this right
shall continue until such time as the default in payment of dividends shall
have been cured.
So long as any shares of any series of preferred stock shall be outstanding,
the Corporation shall not, without the approval of the holders of shares
representing a majority of the votes entitled to be cast, issue any additional
shares, or reissue any reacquired shares, of preferred stock or of any other
class of stock ranking prior to or on a parity with the outstanding shares of
the preferred stock as to dividends or assets for any purpose other than to
purchase or redeem an equal par or stated value on involuntary liquidation of
preferred stock or of stock ranking prior to or on a parity with the preferred
stock as to dividends or assets at the time outstanding unless
(i) the consolidated gross income (as defined) of the Corporation and its
subsidiaries for 12 consecutive calendar months within a period of 15
calendar months immediately preceding the calendar month of such issuance
is equal to at least 1 times the aggregate of the annual interest charges
on indebtedness of the Corporation and its subsidiaries (excluding interest
charges on indebtedness to be retired by the application of the proceeds
from the issuance of such shares) and the annual dividend requirements on
all preferred stock (including dividend requirements on any class of stock
ranking prior to or on a parity with the shares to be issued as to
dividends or assets but excluding any dividend requirements on any stock to
be retired by the application of the proceeds from the issuance of such
shares), which shall be outstanding immediately after the issuance of such
shares; and
(ii) the aggregate capital of the Corporation applicable to all capital
stock outstanding ranking junior to the preferred stock as to dividends and
assets, plus the consolidated earned and capital surplus of the Corporation
and its subsidiaries, shall be at least equal to the aggregate amount
payable upon involuntary dissolution, liquidation or winding up of the
Corporation on all shares of the preferred stock, and all stock ranking
prior to or on a parity with the preferred stock as to dividends or assets,
to be outstanding immediately after the issuance of such shares of
preferred stock or such stock ranking prior to or on a parity therewith and
the application of the proceeds thereof.
Each share of preferred stock of any series having a stated value of $100 on
involuntary liquidation shall, to the extent it is entitled to vote, be
entitled to one vote per share. Each share of preferred stock of any series
having a stated value other than $100 on involuntary liquidation shall be
entitled to as many votes or a fractional vote, as the case may be, as
determined by the ratio of the stated value on involuntary liquidation of a
share of each such series to $100.
Redemption. A series of the Preferred Stock may be redeemable, in whole or in
part, at the option of the Corporation, and may be subject to mandatory
redemption pursuant to a sinking fund, in each case upon terms, at the times
and at the redemption prices set forth in the Prospectus Supplement relating to
such series.
The Corporation's Restated Articles of Incorporation prohibit the Corporation
from redeeming (at its option or through operation of a sinking fund) or
purchasing shares of any series of preferred stock unless full cumulative
dividends on all outstanding shares of preferred stock for all dividend periods
ending on or prior to the date of redemption or purchase shall have been paid
or declared and set apart for payment.
Shares of any series of preferred stock which shall have been redeemed or
purchased by the Corporation shall, upon the filing of any required
certificate, be restored to the status of authorized but unissued shares of
preferred stock without designation and may be reissued from time to time,
unless the statement of resolution relating to such series of preferred stock
provides otherwise.
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Liquidation Rights. In the event of any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation the holders of each series of
Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to shareholders, before any distribution
of the assets is made to the holders of the Voting Preference Stock or the
Common Stock, cash in the amount or amounts set forth in the Prospectus
Supplement relating to such series of Preferred Stock plus accrued and unpaid
dividends. If the assets are not sufficient to pay in full the amounts payable
on all shares of preferred stock in the event of voluntary or involuntary
dissolution, liquidation or winding up, then the assets available for payment
will be distributed ratably among the holders of the preferred stock of all
series in proportion to the full preferential amounts to which they are
respectively entitled.
Transfer Agent and Registrar. The transfer agent for each series of Preferred
Stock will be described in the related Prospectus Supplement.
Adjustable Rate Cumulative Preferred Stock, Series D. The Corporation
currently has outstanding 1,500,000 shares of Adjustable Rate Cumulative
Preferred Stock, Series D, all of which have been called for redemption on
March 11, 1994. Harris Trust Company of New York, New York, New York, is
Transfer Agent for the Series D Preferred Stock.
Adjustable Rate Cumulative Preferred Stock, Series E. The Corporation also
has outstanding 100,000 shares of Adjustable Rate Cumulative Preferred Stock,
Series E. These shares are of no par value per share but have a stated value on
liquidation of $1,000 per share. Series E Preferred Stock is redeemable at the
option of the Corporation at $1,030 per share through April 30, 1994, and at
$1,000 per share thereafter. The Series E Preferred Stock is deposited with a
bank under a depositary agreement and is represented by 1,000,000 Depositary
Shares. The First Chicago Trust Company of New York, New York, New York, is the
Transfer Agent for the Series E Depositary Shares.
VOTING PREFERENCE STOCK
The Corporation has authorized 500,000 shares of a series of Voting
Preference Stock in connection with the shareholders rights plan described
under "Common Stock" above. To date none of such shares have been issued or are
outstanding.
The Voting Preference Stock is junior to Preferred Stock but has a preference
over Common Stock as to dividends and assets on liquidation. Dividends (other
than dividends payable in Common Stock) cannot be paid on Common Stock if the
Corporation has not met the requirements for dividend payments or for any
sinking fund created with respect to any series of Voting Preference Stock. In
general, holders of Voting Preference Stock have the same voting rights as
holders of Common Stock for the election of directors and all other purposes
(voting with the Common Stock together as a single class) as well as voting
rights specified by Texas law, except that holders of Voting Preference Stock
have no voting rights on amendments to the Restated Articles of Incorporation
other than as provided under Texas law and by the Restated Articles of
Incorporation. Voting Preference Stock is entitled to one vote for each $10,000
of stated value attributable to such shares subject, however, to adjustments
for shares having a stated value other than $10,000. Voting Preference Stock
has no preemptive rights.
DEPOSITARY SHARES
General. The Corporation may, at its option, elect to offer fractional shares
of Preferred Stock, rather than full shares of Preferred Stock. If such option
is exercised, the Corporation will issue to the public receipts for Depositary
Shares, each of which will represent a fraction (to be set forth in the
Prospectus Supplement relating to a particular series of Preferred Stock) of a
share of a particular series of Preferred Stock as described below.
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The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Corporation and a bank or trust company selected by the Corporation having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary"). The Prospectus Supplement
relating to a series of Depositary Shares will set forth the name and address
of the Depositary. Subject to the terms of the Deposit Agreement, each owner of
a Depositary Share will be entitled, in proportion to the applicable fraction
of a share of Preferred Stock represented by such Depositary Share, to all the
rights and preferences of the Preferred Stock represented thereby (including
dividend, voting, redemption and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipts are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such exhibits.
Pending the preparation of definitive Depositary Receipts, the Depositary
may, upon the written order of the Corporation or any holder of Preferred
Stock, execute and deliver temporary Depositary Receipts substantially
identical to (and entitling the holders thereof to all the benefits pertaining
to) definitive Depositary Receipts but not in definitive form. Definitive
Depositary Receipts will be prepared thereafter without unreasonable delay, and
temporary Depositary Receipts will be exchangeable for definitive Depositary
Receipts at the Corporation's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to
the terms thereof, a holder of Depositary Receipts is entitled to have the
Depositary deliver to such holder the whole shares of Preferred Stock and all
money and other property, if any, relating to the surrendered Depositary
Receipts.
Dividends and Other Distributions. The Depositary will distribute all cash
dividends or other cash distributions received in respect of the Preferred
Stock to the record holders of Depositary Shares relating to such Preferred
Stock in proportion to the number of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash or rights, preferences or
privileges upon the Preferred Stock, the Depositary will distribute securities
or property received by it to the record holders of Depositary Shares entitled
thereto in proportion to the number of such Depositary Shares owned by such
holders, unless the Depositary determines such distribution cannot be made
proportionately among such holders or that it is not feasible to make such
distribution, in which case the Depositary may, with the approval of the
Corporation, sell such securities or property or adopt such other method as it
deems equitable and practicable for effecting such distribution and distribute
the net proceeds from such sale to such holders.
Redemption of Depositary Shares. If a series of Preferred Stock represented
by Depositary Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such series of Preferred Stock held by the
Depositary. The Depositary will mail notice of redemption not less than 30 and
not more than 60 days prior to the date fixed for redemption to the record
holders of the Depositary Shares to be so redeemed at their respective
addresses appearing in the Depositary's books. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of the Preferred Stock plus
all money and other property, if any, represented by such Depositary Shares.
Whenever the Corporation redeems shares of Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares representing shares of Preferred Stock so redeemed.
If less than all the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot or pro rata or in any other
manner, as may be determined by the Depositary to be equitable.
Voting. Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Depositary will mail a notice
containing the information contained in such notice of meeting to the
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record holders of the Depositary Shares relating to such Preferred Stock. Such
notice will also state that each record holder of such Depositary Shares on the
record date (which will be the same date as the record date for the Preferred
Stock) will be entitled to instruct the Depositary as to the exercise of the
voting rights pertaining to the amount of the Preferred Stock represented by
such holder's Depositary Shares and will contain a brief statement as to the
manner in which such instructions may be given. The Depositary will endeavor,
insofar as practicable, to vote the amount of the Preferred Stock represented
by such Depositary Shares in accordance with such instructions, and the
Corporation will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of the Preferred Stock (but, in its discretion, not
from appearing at any meeting with respect to such Preferred Stock unless
directed to the contrary by the holders of all the Depositary Receipts) to the
extent it does not receive specific instructions from the holders of Depositary
Shares representing such Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of Depositary
Receipt evidencing the Depositary Shares and any provision of the Deposit
Agreement may at any time be amended by agreement between the Corporation and
the Depositary. However, any amendment which materially and adversely alters
the rights of the holders of Depositary Shares will not be effective unless
such amendment has been approved by the holders of at least a majority of the
Depositary Shares then outstanding. The Deposit Agreement may be terminated by
the Corporation or the Depositary only if (i) all outstanding Depositary Shares
have been redeemed or (ii) there has been a final distribution in respect of
the Preferred Stock in connection with any liquidation, dissolution or winding
up of the Corporation and such distribution has been distributed to the holders
of Depositary Shares.
Charges of Depositary. The Corporation will pay all transfer and other taxes
and governmental charges arising solely from the existence of the depositary
arrangements. The Corporation will pay all charges of the Depositary in
connection with the initial deposit of the Preferred Stock and the initial
issuance of the Depositary Shares, redemption of the Preferred Stock at the
option of the Corporation and withdrawal of shares of Preferred Stock by
holders of Depositary Shares. Holders of Depositary Shares will pay all other
transfer and other taxes and governmental charges.
Miscellaneous. The Depositary will make available for inspection by holders
of Depositary Receipts, at the Depositary's office, any reports and
communications received from the Corporation which are received by the
Depositary as the holder of Preferred Stock.
Neither the Depositary, any Depositary's Agent, any Registrar nor the
Corporation will incur any liability if it is prevented or delayed by law or
any circumstance beyond its control from performing its obligations under the
Deposit Agreement. Neither the Depositary, any Depositary's Agent, any
Registrar nor the Corporation assumes any obligation or shall be subject to any
liability under the Deposit Agreement to holders of Depositary Receipts other
than for their gross negligence, willful misconduct, or bad faith. Neither the
Depositary, any Depositary's Agent, any Registrar nor the Corporation shall be
under any obligation to appear in, prosecute or defend any action, suit or
other proceeding in respect of the Preferred Stock, the Depositary Shares or
the Depositary Receipts which in its opinion may involve it in expense or
liability unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required. Neither the Depositary, any
Depositary's Agent, any Registrar nor the Corporation shall be liable for any
action or any failure to act by it in reliance upon the written advice of legal
counsel or accountants or upon information from any person presenting Stock for
deposit, any holder of a Depositary Receipt or any other person believed by it
in good faith to be competent to give such information. The Depositary, any
Depositary's Agent, any Registrar and the Corporation may each rely and shall
each be protected in acting upon any written notice, request, direction or
other document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
Resignation and Removal of Depositary. The Depositary may resign at any time
by delivering to the Corporation written notice of its election to do so, and
the Corporation may at any time remove the
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Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointment. Such
successor Depositary must be appointed within 60 days after delivery of the
notice of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
ENSERCH CAPITAL L.L.C.
GENERAL
Enserch Capital, a subsidiary of ENSERCH, is a limited liability company
organized under the laws of the State of Delaware. All of its limited liability
company interests (other than EC Preferred Securities) are beneficially owned
by ENSERCH and are non-transferable. Enserch Capital's registered office in the
State of Delaware is c/o The Corporation Trust Company, Corporate Trust Center,
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, telephone:
(302) 658-7581. Enserch Capital has no board of directors, and all of its
business and affairs will be conducted by ENSERCH, as the manager (the
"Manager"). The location of the principal executive offices of the Manager is
set forth above under "The Corporation." Enserch Capital exists solely for the
purpose of issuing its limited liability company interests and lending the net
proceeds thereof to ENSERCH.
EC PREFERRED SECURITIES
Enserch Capital may, from time to time, issue EC Preferred Securities, in one
or more series, having terms described in the Prospectus Supplement relating
thereto. Under Enserch Capital's Amended and Restated Limited Liability Company
Agreement (the "Limited Liability Company Agreement"), ENSERCH will be
authorized to establish one or more classes or series of EC Preferred
Securities, having such terms, including dividend, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights
or such restrictions, as ENSERCH may determine. All EC Preferred Securities
offered hereby will be guaranteed by ENSERCH to the limited extent set forth
below under "Guarantee" and may also be entitled to the benefits of certain
undertakings of ENSERCH as described below under "Backup Undertakings." Any
special federal income tax, accounting and other considerations applicable to
any offering of EC Preferred Securities and related Backup Undertakings will be
described in the Prospectus Supplement relating thereto.
GUARANTEE
ENSERCH will irrevocably and unconditionally agree (the "Guarantee"), to the
extent set forth herein, to pay in full, to the holders of EC Preferred
Securities of any class or series, the Guarantee Payments (as defined below),
as and when due, regardless of any defense, right of set-off or counterclaim
which Enserch Capital may have or assert. The Guarantee will constitute a
guarantee of payment and not of collection, and may be enforced by holders of
EC Preferred Securities directly against ENSERCH. The following payments to the
extent not paid by Enserch Capital (the "Guarantee Payments") will be subject
to the Guarantee (without duplication): (i) any accumulated arrears and
accruals of unpaid dividends which have heretofore been declared on the EC
Preferred Securities of such class or series out of moneys legally available
therefor, (ii) the redemption price including all accumulated arrears and
accruals of unpaid dividends payable, out of moneys legally available therefor,
with respect to any EC Preferred Securities of such class or series called for
redemption, and (iii) upon a liquidation of Enserch Capital, the lesser of (a)
the aggregate of the liquidation preference and all accumulated arrears and
accruals of unpaid dividends (whether or not declared) on the EC Preferred
Securities of such class or series to the date of payment and (b) the amount of
assets of Enserch Capital remaining available for distribution in liquidation
to the holders of EC Preferred Securities of such class or series. In addition,
the Prospectus Supplement relating to a class or series of EC Preferred
Securities will describe the rank of the Guarantee and any additional covenants
or other terms of the Guarantee of ENSERCH with respect to such class or
series.
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BACKUP UNDERTAKINGS
In connection with any class or series of EC Preferred Securities, ENSERCH
may enter into additional arrangements with Enserch Capital, including
intercompany loan agreements and amendments to Enserch Capital's Limited
Liability Company Agreement, that operate directly or indirectly for the
benefit of holders of the EC Preferred Securities. The Guarantee described
above under "Guarantee," and any such other arrangements are herein
collectively referred to as "Backup Undertakings" of ENSERCH and will be
described in the Prospectus Supplement relating to any class or series of EC
Preferred Securities to which they apply.
VALIDITY OF EC PREFERRED SECURITIES
Certain matters of Delaware law relating to the validity of the EC Preferred
Securities of Enserch Capital offered hereby will be passed upon by Richards,
Layton & Finger, P.A., as special Delaware counsel for Enserch Capital. In
rendering their opinions with respect to the EC Preferred Securities as
described under "Legal Opinions," Mr. Satterwhite and Mudge Rose Guthrie
Alexander & Ferdon may rely on Richards, Layton & Finger, P.A. as to matters of
Delaware law.
PLAN OF DISTRIBUTION
ENSERCH and/or Enserch Capital may offer or sell Securities to one or more
underwriters for public offering and sale by them or may sell Securities to
investors directly or through agents. ENSERCH and/or Enserch Capital may sell
Securities as soon as practicable after effectiveness of the Registration
Statement, provided that favorable market conditions exist. Any such
underwriter or agent involved in the offer and sale of the Securities will be
named in an applicable Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Corporation also may offer and sell the Securities in
exchange for one or more of its outstanding issues of equity or debt or
convertible debt securities. ENSERCH and/or Enserch Capital also may, from time
to time, authorize firms acting as the Corporation's or Enserch Capital's
agents to offer and sell the Securities upon the terms and conditions as shall
be set forth in any Prospectus Supplement. In connection with the sale of
Securities, underwriters may be deemed to have received compensation from
ENSERCH and/or Enserch Capital in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Securities for
whom they may act as agent. Underwriters may sell Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions (which may
be changed from time to time) from the purchasers for whom they may act as
agent.
Any underwriting compensation paid by ENSERCH and/or Enserch Capital to
underwriters or agents in connection with the offering of Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in an applicable Prospectus Supplement.
Underwriters, dealers and agents participating in the distribution of the
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the Securities
may be deemed to be underwriting discounts and commissions, under the
Securities Act. Underwriters, dealers and agents may be entitled, under
agreements with the Corporation, to indemnification against and contribution
toward certain civil liabilities, including liabilities under the Securities
Act, and to reimbursement by the Corporation for certain expenses.
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Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, ENSERCH and/or Enserch Capital in the
ordinary course of business.
If so indicated in an applicable Prospectus Supplement, ENSERCH will
authorize dealers acting as ENSERCH's agents to solicit offers by certain
institutions to purchase Debt Securities from ENSERCH at the public offering
price set forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than, and the aggregate principal amount of Debt Securities sold pursuant
to Contracts shall be not less nor more than, the respective amounts stated in
such Prospectus Supplement. Institutions with whom Contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of ENSERCH.
Contracts will not be subject to any conditions except (i) the purchase by an
institution of the Debt Securities covered by its Contracts shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject, and (ii) if the Debt Securities
are being sold to underwriters, the Corporation shall have sold to such
underwriters the total principal amount of the Debt Securities less the
principal amount thereof covered by Contracts. Agents and underwriters will
have no responsibility in respect of the delivery or performance of Contracts.
Each series of Debt Securities, Preferred Stock and EC Preferred Securities
will be a new issue of securities and will have no established trading market.
Any underwriters to whom Securities are sold by the Corporation or Enserch
Capital for public offering and sale may make a market in such Securities, but
such underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. The Securities may or may not be listed on a
national securities exchange or a foreign securities exchange, except that the
Common Stock is listed on the New York Stock Exchange, Midwest Stock Exchange
and the London Stock Exchange. Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on such exchanges, subject to official notice of
issuance. No assurance can be given as to the liquidity of or the trading
markets for any Securities.
LEGAL OPINIONS
The validity of the Securities of ENSERCH will be passed upon for the
Corporation by William T. Satterwhite, Esquire, Senior Vice President and
General Counsel of the Corporation, and for any underwriters or agents by Mudge
Rose Guthrie Alexander & Ferdon, New York, New York, who will rely on the
opinion of Mr. Satterwhite as to matters of Texas law. Certain matters of
Delaware law relating to the validity of the EC Preferred Securities of Enserch
Capital will be passed upon by Richards, Layton & Finger, P.A., as special
Delaware counsel for Enserch Capital. In rendering their opinions, Mr.
Satterwhite and Mudge Rose Guthrie Alexander & Ferdon will rely upon the
opinion of Richards, Layton & Finger, P.A. as to matters of Delaware law.
Mudge Rose Guthrie Alexander & Ferdon has from time to time performed legal
services for the Corporation. Mudge Rose Guthrie Alexander & Ferdon acted as
counsel to the Corporation in connection with the recent sale of the principal
assets of its engineering and construction business. In the year ended December
31, 1993, and through February 15, 1994, Mudge Rose Guthrie Alexander & Ferdon
collected approximately $604,000 in legal fees from the Corporation in
connection with such services. As of December 31, 1993, Mr. Satterwhite owned
16,415 shares of Common Stock and held options to acquire 84,622 shares of
Common Stock (of which 61,497 are presently exercisable) and 8,644 shares of
Common Stock which were held for his account under an employee benefit plan.
Mr. Satterwhite also participates in other employee benefit plans of the
Corporation.
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EXPERTS
The financial statements and related financial statement schedules
incorporated in this Prospectus by reference from the Corporation's Current
Report on Form 8-K dated March 3, 1994, (containing financial statements for
the year ended December 31, 1993) and from the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1992, have been audited by Deloitte &
Touche, independent auditors, as stated in their reports which are incorporated
herein by reference, and have been so incorporated in reliance upon such
reports given upon the authority of such firm as experts in auditing and
accounting.
With respect to any unaudited interim financial information included in the
Corporation's Quarterly Reports on Form 10-Q, that are or will be incorporated
herein by reference, Deloitte & Touche applies limited procedures in accordance
with professional standards for reviews of such information. As stated in any
of its reports that are included in the Corporation's Quarterly Reports on Form
10-Q, that are or will be incorporated herein by reference, Deloitte & Touche
did not audit and 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 is not subject to the liability
provisions of Section 11 of the Securities Act for any of its reports on such
unaudited interim financial information because those reports are not "reports"
or a "part" of the Registration Statement filed under the Securities Act with
respect to the Securities prepared or certified by an accountant within the
meaning of Section 7 and 11 of the Securities Act.
The estimates of reserves incorporated by reference in this Prospectus made
by DeGolyer & MacNaughton, independent petroleum consultants, as set forth
under "Properties" appearing in Part I and in Note 12 of the "Notes to
Consolidated Financial Statements" appearing in Appendix A of the Corporation's
1992 Annual Report on Form 10-K for the year ended December 31, 1992, and in
Note 13 of the Notes to Consolidated Financial Statements appearing in Appendix
A of the Corporation's Current Report on Form 8-K dated March 3, 1994, have
been so set forth and incorporated herein in reliance upon the authority of
such firm as experts.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses to be incurred by ENSERCH in
connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission registration fee,
all amounts shown are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............. $155,174
Accounting Fees and Expenses.................................... 75,000
Printing and Engraving Expenses................................. 85,000
Trustee's and Depositary's Fees and Expenses.................... 10,000
Stock Exchange Listing Fees..................................... 93,300
Legal Fees and Expenses......................................... 115,000
Blue Sky Expenses, Including Counsel Fees....................... 20,000
Rating Agency Fees.............................................. 218,750
Miscellaneous Expenses.......................................... 2,776
--------
Total....................................................... $775,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 2.02-1 of the Texas Business Corporation Act authorizes, inter alia,
a corporation to indemnify any person who was, is, or is threatened to be made
a named defendant or respondent to any action, suit, inquiry or investigation
(a "proceedings") because such person is or was a director if it is determined
that such person conducted himself in good faith and reasonably believed that,
(i) in the case of conduct in his official capacity as a director of the
corporation, that his conduct was in the corporation's best interests; (ii) in
all other cases, except for a criminal proceeding, that his conduct was not
opposed to the corporation's best interests; and (iii) in the case of any
criminal proceeding, that he had no reasonable cause to believe his conduct was
unlawful. A determination that such indemnification is permissible, and the
authorization of indemnification and the determination as to reasonableness of
expenses must be made by either the disinterested shareholders, disinterested
directors, or by special legal counsel selected by disinterested directors. A
director is not entitled to such indemnification if he is found liable on the
basis that personal benefit was improperly received by him or if he is found
liable to the corporation. A corporation is required to indemnify a director or
officer of the corporation against reasonable expenses incurred by him in
connection with a proceeding in which he is a named defendant or respondent
because he is or was a director or officer of the corporation if he has been
wholly successful, on the merits or otherwise, in the defense of the
proceedings. Reasonable expenses may be advanced by the corporation if the
director or officer who was, is or is threatened to be named a defendant or
respondent in a proceeding delivers to the corporation a written statement of
his good faith belief that he has met the standard of conduct necessary for
indemnification under the Act and a written undertaking by him, or on his
behalf, to repay the amount paid or reimbursed if it is ultimately determined
that he has not met that standard or if it is ultimately determined that
indemnification is prohibited by this section. This section provides that if a
director or officer of a corporation is found liable to the corporation or is
found liable on the basis that personal benefit was improperly received by such
director or officer, the indemnification (1) is limited to reasonable expenses
actually incurred by such director or officer in condition with the proceeding
and (2) shall not be made in respect of any proceeding in which such director
or officer shall have been found liable for willful or intentional misconduct
in the performance of his duty to the corporation. In addition, a court of
competent jurisdiction may determine that a director or officer is entitled to
indemnification under this section of the Texas Business Corporation Act.
Section 2.02-1 of the Texas Business Corporation Act empowers a corporation
to purchase and maintain insurance on behalf of directors and officers and
certain other persons whether or not the corporation would have the power under
such section to indemnify such person against liability.
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Article XIII of ENSERCH's Bylaws authorizes ENSERCH to indemnify any person
who (i) is or was a director, officer, employee or agent of ENSERCH, or (ii)
while a director, officer, employee or agent of ENSERCH, is or was serving at
the request of ENSERCH as a director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise to the fullest extent that a corporation may
or is required to grant indemnification to a director under the Texas Business
Corporation Act. ENSERCH also may indemnify any person to such further extent
as permitted by law.
Additionally, Article Eight of ENSERCH's Restated Articles of Incorporation
eliminates in certain circumstances the monetary liability of directors of
ENSERCH for an act or omission in the director's capacity as a director. This
provision does not eliminate or limit the liability for (i) a breach of a
director's duty of loyalty to ENSERCH or its shareholder; (ii) an act or
omission not in good faith or that involves intentional misconduct or a knowing
violation of the law; (iii) a transaction from which the director received an
improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office; (iv) an act or omission for which
the liability of the director is expressly provided for by statute; or (v) an
act related to an unlawful stock repurchase or payment of a dividend.
ENSERCH carries directors' and officers' liability insurance which insures
ENSERCH's directors and officers against liability for any "wrongful act"
arising out of their position, and which is not reimbursable under the
ENSERCH's Bylaws or which, if reimbursable, ENSERCH has not paid or is unable
to pay. These provisions of the policy pertaining to officers and directors are
also subject to several exclusions, including losses covered under other forms
of insurance, losses occasioned by violations of governmental regulations and
ordinances, losses for which insurance would be against public policy and
others recited therein.
ITEM 16. EXHIBITS
Unless otherwise noted, the following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
------- -------- ---
<C> <S> <C>
1.1 Form of Debt Underwriting Agreement including Form of Letter
to prospective underwriters of Debt Securities.
1.2 Form of Equity Underwriting Agreement.
1.3 Form of Agency Agreement.
4.1* Form of Debt Securities.
4.2* Form of Medium-Term Note (fixed rate).
4.3* Form of Medium-Term Note (floating rate).
4.4 Senior Indenture, dated as of February 15, 1992, between the
Corporation and The First National Bank of Chicago, as Trust-
ee.
4.5 Form of Subordinated Indenture between the Corporation and The
First National Bank of Chicago, as Trustee.
4.6 Form of resolution of the Securities Committee of the Board of
Directors of the Corporation authorizing and creating a series
of Preferred Stock.
4.7 Form of specimen certificate representing shares of Preferred
Stock.
4.8 Form of specimen certificate representing shares of Common
Stock.
4.9 Form of Deposit Agreement.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
------- -------- ---
<C> <S> <C>
4.10 Form of Depositary Receipt (included in Exhibit 4.9).
4.11 Restated Articles of Incorporation of the Corporation, as
amended (incorporated by reference to Exhibit 3.1 of the Cor-
poration's Form 10-K for the Year Ended December 31, 1988
[File No. 1-3183]).
4.12 Rights Agreement, dated as of April 15, 1986, between the Cor-
poration and Harris Trust Company of New York (incorporated by
reference to Exhibit 4.5 of the Corporation's Registration
Statement on Form S-3 [No. 33-45688]).
4.13 Bylaws of the Corporation, as amended.
4.14 Certificate of Formation of Enserch Capital L.L.C. ("Enserch
Capital").
4.15 Limited Liability Company Agreement of Enserch Capital.
5.1 Opinion of William T. Satterwhite, Esquire, as to the legality
of the Securities of ENSERCH.
5.2 Opinion of Richards, Layton & Finger, P.A. as to validity of
EC Preferred Securities of Enserch Capital.
12 Computations of ratio of earnings to fixed charges and ratio
of earnings to combined fixed charges and preferred stock div-
idends.
15 Letter of Deloitte & Touche regarding unaudited interim finan-
cial information.
23.1 Consent of Deloitte & Touche.
23.2 Consent of DeGolyer and MacNaughton.
23.3 Consent of William T. Satterwhite (included in Exhibit 5.1
above).
23.4 Consent of Richards, Layton & Finger, P.A. (included in Ex-
hibit 5.2 hereto).
24 Powers of Attorney.
25.1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The First National Bank of Chicago, as
Trustee under the Senior Debt Indenture.
25.2 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The First National Bank of Chicago, as
Trustee under the Subordinated Debt Indenture.
</TABLE>
- --------
*The Corporation will file any forms of Debt Securities, Preferred Stock or
EC Preferred Securities not previously so filed in a current Report on Form
8-K.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrants hereby undertake:
(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;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraph (a)(1)(i)
and (a)(1)(ii) above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by ENSERCH pursuant to Section 13 or 15(d) of the
Securities Act of 1934 that are incorporated by reference in the
Registration Statement.
II-3
<PAGE>
(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.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
ENSERCH's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrants pursuant to the provision described under Item 15 above, or
otherwise, the Registrants have 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 Registrants of expenses incurred or paid by a director, officer
or controlling person of the Registrants 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
Registrants 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.
II-4
<PAGE>
SIGNATURES
PURSUANT TO REQUIREMENTS OF THE SECURITIES ACT OF 1933, ENSERCH CORPORATION
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILLING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF DALLAS AND STATE OF TEXAS ON THE 7TH DAY OF MARCH
1994.
ENSERCH CORPORATION
/s/ D. W. Biegler
By: _________________________________
D. W. Biegler,
Chairman and President,
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1993, ENSERCH CAPITAL
L.L.C. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED IN THE CITY OF DALLAS AND STATE OF TEXAS, ON THE 7TH DAY OF
MARCH 1994.
ENSERCH CAPITAL L.L.C.
By: ENSERCH CORPORATION,
/s/ D. W. Biegler
By: _________________________________
Name:D. W. Biegler,
Title: Chairman and President, Chief
Executive Officer
II-5
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE AND TITLE DATE
------------------- ----
<S> <C>
D. W. Biegler, Chairman and
President,
Chief Executive Officer, and
Director;
William B. Boyd, Director; B.
A.
Bridgewater, Jr., Director;
Lawrence E.
Fouraker, Director; Preston M.
Geren, Jr.,
Director; Marvin J. Girouard,
Director;
Joseph M. Haggar, Director; W.
C. McCord, March 7, 1994
Director; Diana S. Natalicio,
Director;
W. Ray Wallace, Director; S. R.
Singer,
Senior Vice President, Finance
and
Corporate Development, Chief
Financial
Officer; Jerry W. Pinkerton,
Vice
President and Controller, Chief
Accounting Officer
</TABLE>
By: /s/ D. W. Biegler
D. W. Biegler,
As Attorney-in-Fact
II-6
<PAGE>
EXHIBIT 1.1
ENSERCH CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT
----------------------
______________, 199_
Gentlemen:
ENSERCH Corporation, a Texas corporation ("Company"), confirms its
agreement with the several Underwriters listed in Schedule A hereto
("Underwriters", which term may refer to a single Underwriter if only one is
listed in Schedule A) as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue and sell to
the several Underwriters securities of the title, amount and particular terms
set forth or referred to in Schedule B hereto ("Securities"). The Securities
are to be issued under the Indenture ("Indenture") identified in Schedule B
hereto.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement on Form S-3 (with the file number set
forth in Schedule B hereto), including a prospectus, with respect to
securities of the Company, including the Securities, and of a special
purpose subsidiary of the Company, has been carefully prepared by the
Company in conformity with the requirements of the Securities Act of 1933,
as amended ("Act"), the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act") and the rules and regulations ("Rules and Regulations") of
the Securities and Exchange Commission ("Commission") thereunder and filed
with the Commission and has become effective. Such registration statement
and prospectus may have been amended or supplemented prior to the date of
this Agreement; any such amendment or supplement was so prepared and filed,
and any such amendment filed after the effective date of such registration
statement has become effective. No stop order suspending the effectiveness
of the registration statement has been issued, and no proceeding for that
purpose has been instituted or threatened by the Commission. A prospectus
supplement ("Prospectus Supplement") setting forth the terms of the
Securities and of their sale and distribution has been or will
<PAGE>
be so prepared and will be filed pursuant to Rule 424(b) of the Rules and
Regulations on or before the second business day after the date hereof (or
such earlier time as may be required by the Rules and Regulations). Copies
of such registration statement and prospectus, any such amendment or
supplement and all documents incorporated by reference therein that were
filed with the Commission on or prior to the date of this Agreement
(including one fully executed copy of the registration statement and of
each amendment thereto for each of you and for counsel for the
Underwriters) have been delivered to you. Such registration statement, as
it may have heretofore been amended, is referred to herein as the
"Registration Statement", and the final form of prospectus included in the
Registration Statement, as supplemented by the Prospectus Supplement, is
referred to herein as the "Prospectus". Each form of Prospectus, or
Prospectus and Prospectus Supplement, if any, heretofore made available for
use in offering the Securities is referred to herein as a "Preliminary
Prospectus". Any reference herein to the Registration Statement, the
Prospectus, any amendment or supplement thereto or any Preliminary
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement or Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein.
(b) Each part of the registration statement, when such part became or
becomes effective, each Preliminary Prospectus (if any) on the date of
filing thereof with the Commission, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and
at the Closing Date (as hereinafter defined), conformed or will conform in
all material respects with the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations; each part of the registration statement,
when such part became or becomes effective, did not or will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; each Preliminary Prospectus (if any), on the date of filing
thereof with the Commission, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and
at the Closing Date, did not or will not include an 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 the statements made in such documents in response
to Rule 4-10 of Regulation S-X and the statements made in such documents
within the coverage of Rule 175(b) of the General Rules and
2
<PAGE>
Regulations under the Act were made by the Company with a reasonable basis
and in good faith; except that the foregoing shall not apply to statements
in or omissions from any such document in reliance upon, and in conformity
with, written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus, when they became or become effective under the Act
or were or are filed with the Commission under the Securities Exchange Act
of 1934, as amended ("Exchange Act"), as the case may be, conformed or will
conform in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(d) The financial statements of the Company and its subsidiaries set
forth in the Registration Statement and Prospectus fairly present the
financial condition of the Company and its subsidiaries as of the dates
indicated and the results of operations and cash flows for the periods
therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise stated therein).
(e) The Company and each United States subsidiary and each material
non-United States subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of its
jurisdiction of incorporation, has full power and authority (corporate and
other) to conduct its business as described in the Registration Statement
and Prospectus and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction in
which it owns or leases real property or in which the conduct of its
business requires such qualification except where the failure to be so
qualified, considering all such cases in the aggregate, does not involve a
material risk to the business, properties, financial position or results of
operations of the Company and its subsidiaries; and all of the outstanding
shares of capital stock of each such subsidiary have been duly authorized
and validly issued, are fully paid and non-assessable and (except as
otherwise stated in the Registration Statement) are owned beneficially by
the Company subject to no security interest, other encumbrance or adverse
claim.
3
<PAGE>
(f) The Indenture and the Securities have been duly authorized, the
Indenture has been duly qualified under the Trust Indenture Act and
executed and delivered and constitutes, and the Securities, when duly
executed, authenticated, issued and delivered as contemplated hereby and by
the Indenture, will constitute, valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; as to any Securities which are convertible into
Common Stock, $4.45 par value ("Common Stock") of the Company ("Convertible
Securities"), such Convertible Securities, when issued as contemplated
hereby, will be convertible into Common Stock in accordance with the terms
of the Indenture, the shares of Common Stock initially issuable upon
conversion of any Convertible Securities will have been duly authorized and
reserved for issuance upon such conversion, and, when so issued, will be
validly issued, fully paid and non-assessable; and the outstanding shares
of Common Stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and conform to the description
thereof in the Prospectus, and the shareholders of the Company have no
preemptive rights with respect to such Securities or the Common Stock.
(g) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course of
business, that are material to the Company and its subsidiaries, and there
has not been any material change, on a consolidated basis, in the capital
stock (other than from stock issued under employee benefit and stock option
plans) or long-term debt (other than from currency fluctuations and normal
repurchases of long-term debt for sinking fund purposes and scheduled
repayments) of the Company and its subsidiaries, or any material adverse
change, or any development involving a prospective material adverse change,
in the condition (financial or other), business, prospects, net worth
(other than any decrease in net worth as a result of the declaration by the
Company of regular quarterly dividends on its preferred stock and Common
Stock) or results of operations of the Company and its subsidiaries
considered as a whole.
(h) Except as set forth in the Prospectus, there is not pending or, to
the knowledge of the Company, threatened any action, suit or proceeding to
which the Company or any of its subsidiaries is a party, before or by any
court or governmental agency or body, other than litigation incident to
4
<PAGE>
the kind of business conducted by the Company, that might result in any
material adverse change in the condition (financial or other), business,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole, or might materially and adversely
affect the properties or assets thereof.
(i) There are no contracts or documents of the Company or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by
the Act, the Trust Indenture Act or the Exchange Act or by the rules and
regulations of the Commission thereunder that have not been so filed.
(j) The performance of this Agreement and of any Delayed Delivery
Contracts (as hereinafter defined) and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, any
agreement or instrument to which the Company is a party or by which it is
bound or to which any of the property of the Company is subject, the
Restated Articles of Incorporation, as amended, or By-laws of the Company,
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties; no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the issuance
or sale of the Securities by the Company, except such as may be required
under the Act, the Trust Indenture Act or state securities laws; and the
Company has full power and authority to authorize, issue and sell the
Securities as contemplated by this Agreement.
(k) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property described in the Registration Statement and Prospectus as
being owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement and
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; the real properties referred
to in the Registration Statement and Prospectus as held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the conduct of the business of the Company and its
subsidiaries; the pipeline easements enjoyed by the Company and its
subsidiaries are
5
<PAGE>
valid, subsisting and enforceable easements with such exceptions as are not
material and do not interfere with the conduct of the business of the
Company and its subsidiaries; the gas purchase contracts referred to in the
Registration Statement and the Prospectus are valid contracts in accordance
with their terms; the leases, operating agreements and other interests in
gas acreage referred to in the Registration Statement and Prospectus as
held by the Company and its subsidiaries entitle them to the rights therein
purported to be granted, subject to the jurisdiction of regulatory agencies
to establish allowable levels of production; the Company and its
subsidiaries possess all licenses, franchises, permits, authorizations,
approvals, consents and orders of all governmental authorities or agencies
(including, without limitation, all certificates of public convenience and
necessity issued by the Federal Energy Regulatory Commission) necessary for
the ownership or lease of the properties owned or leased or proposed to be
owned or leased by them and for the operation of the business carried on or
proposed to be carried on by them as described in the Registration
Statement and Prospectus; all such licenses, franchises, permits, orders,
authorizations, approvals and consents are in full force and effect and
contain no unduly burdensome provisions and, except as otherwise set forth
in the Registration Statement and Prospectus, there are no legal or
governmental proceedings pending or threatened that would result in a
material modification, suspension or revocation thereof.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at the purchase price set forth in Schedule B hereto,
the amount of Securities set forth opposite the name of such Underwriter in
Schedule A hereto less the reduction for such Underwriter's portion of any
Contract Securities determined as provided below.
If so authorized in Schedule B hereto, the Underwriters may solicit
offers from investors of the types set forth in the Prospectus to purchase
Securities from the Company pursuant to delayed contracts ("Delayed Delivery
Contracts"). Such contracts shall be substantially in the form of Exhibit I
hereto but with such changes therein as the Company may approve. Securities to
be purchased pursuant to Delayed Delivery Contracts are herein called "Contract
Securities". When Delayed Delivery Contracts are authorized in Schedule B, the
Company will enter into a Delayed Delivery Contract in each case where a sale of
Contract Securities arranged through you has been approved by the Company but,
except as the Company may otherwise agree, such Delayed Delivery Contracts must
be for at least the minimum amount of Contract Securities set
6
<PAGE>
forth in Schedule B hereto, and the aggregate amount of Contract Securities may
not exceed the amount set forth in such Schedule. The Company will advise you
not later than 10:00 A.M., New York City time, on the third full business day
preceding the Closing Date (or at such later time as you may otherwise agree) of
the sales of Contract Securities that have been so approved. You and the other
Underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts.
The amount of Securities to be purchased by each Underwriter as set
forth in Schedule A hereto shall be reduced by an amount that shall bear the
same proportion to the total amount of Contract Securities as the amount of
Securities set forth opposite the name of such Underwriter bears to the total
amount of Securities set forth in Schedule A hereto, except to the extent that
you determine that such reduction shall be otherwise than in such proportion and
so advise the Company; provided, however, that the total amount of Securities to
be purchased by all Underwriters shall be the total amount of Securities set
forth in Schedule A hereto less the aggregate amount of Contract Securities.
The Securities to be purchased by the Underwriters will be delivered
by the Company to you or the securities depositary as set forth in Schedule B
for the accounts of the several Underwriters against payment of the purchase
price therefor by certified or official bank check or checks, payable to the
order of the Company or, if so requested by the Company, by wire transfer to a
bank account designated by the Company in the funds specified, at the office, on
the date and at the times specified in such Schedule B, or at such other time
not later than eight full business days thereafter as you and the Company
determine, such time being herein referred to as the "Closing Date". Unless
otherwise specified in Schedule B, such Securities will be issued in book-entry
form and prepared in the denominations requested by and registered in the name
of, the securities depository (or a nominee thereof) set forth in Schedule B
hereto and will be made available for checking at least one business day prior
to the Closing Date. If not issued in book-entry form, such Securities will be
prepared in definitive form and in such authorized denominations and registered
in such names as you may request upon at least two business days' prior notice
to the Company and will be made available for checking and packaging at the
office at which they are to be delivered at the Closing Date (or such other
office as may be specified for that purpose in Schedule B) at least one business
day prior to the Closing Date.
It is understood that you, acting individually and not in a
representative capacity, may (but shall not be obligated to) make payment to the
Company on behalf of any other Underwriter for Securities to be purchased by
such Underwriter. Any such payment by you shall not relieve any such
Underwriter of any of its obligations hereunder.
7
<PAGE>
The Company will pay to you, at the Closing Date, for the account of
each Underwriter any commission or other compensation that is specified in
Schedule B hereto. Such payment will be made by certified or official bank
check or checks in New York Clearing House (next day) funds.
4. COVENANTS. The Company covenants and agrees with each Underwriter
that:
(a) The Company will cause the Prospectus Supplement to be filed as
required by Section 2(a) hereof (but only if you have not reasonably
objected thereto by notice to the Company after having been furnished a
copy a reasonable time prior to filing) and will notify you promptly of
such filing. During the period in which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will
notify you promptly of the time when any subsequent amendment to the
Registration Statement has become effective or any subsequent supplement to
the Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or for
additional information; it will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus that, in your opinion, may be
necessary or advisable in connection with the distribution of the
Securities by the Underwriters; it will file no amendment or supplement to
the Registration Statement or Prospectus (other than any prospectus
supplement relating to the offering of other securities registered under
the Registration Statement or any document required to be filed under the
Exchange Act that upon filing is deemed to be incorporated by reference
therein) to which you shall reasonably object by notice to the Company
after having been furnished a copy a reasonable time prior to the filing;
and it will furnish to you at or prior to the filing thereof a copy of any
such prospectus supplement or any document that upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if
such a stop order should be issued.
8
<PAGE>
(c) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by the
Act and by the Rules and Regulations, as from time to time in force, so far
as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof and the Prospectus. If
during such period any event occurs as a result of which the Prospectus as
then amended or supplemented would include an 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 then existing, not
misleading, or if during such period it is necessary to amend or supplement
the Registration Statement or Prospectus to comply with the Act, the
Company will promptly notify you and will amend or supplement the
Registration Statement or Prospectus (at the expense of the Company) so as
to correct such statement or omission or effect such compliance.
(d) The Company will use its best efforts to qualify the Securities
and any Common Stock into which any Securities are convertible for sale
under the securities laws of such jurisdictions as you reasonably designate
and to continue such qualifications in effect so long as required for the
distribution of the Securities, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction. The
Company will also arrange for the determination of the eligibility for
investment of the Securities under the laws of such jurisdictions as you
reasonably request.
(e) The Company will furnish to the Underwriters copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and supplements to
the Registration Statement or Prospectus that are filed with the Commission
during the period in which a prospectus relating to the Securities is
required to be delivered under the Act (including all documents filed with
the Commission during such period that are deemed to be incorporated by
reference therein), in each case as soon as available and in such
quantities as you may from time to time reasonably request.
(f) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the
end of the Company's current fiscal quarter, an earnings statement (which
need not be audited) covering a 12-month period beginning after the date
upon which the Prospectus Supplement is filed pursuant to Rule 424 under
the Act that shall satisfy the provisions of Section 11(a) of the Act or
Rule 158 thereunder.
9
<PAGE>
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
expenses incident to the performance of its obligations hereunder, will pay
the expenses of printing all documents relating to the offering, and will
reimburse the Underwriters for any expenses (including fees and
disbursements of counsel) incurred by them in connection with the matters
referred to in Section 4(d) hereof and the preparation of memoranda
relating thereto, for any filing fee of the National Association of
Securities Dealers, Inc. relating to the Securities and for any fees
charged by investment rating agencies for rating the Securities. If the
sale of Securities to be purchased by the several Underwriters as provided
for herein is not consummated by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part
to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company is not
fulfilled, the Company will reimburse the several Underwriters for all
reasonable out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company shall
not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.
(h) The Company will apply the net proceeds from the sale of the
Securities as set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell, or
determine to offer or sell, any debt securities that are substantially
similar to the Securities (except under prior contractual commitments)
during the period ending on the earlier of the Closing Date or 10 business
days after the date of this Agreement without your prior written consent.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for Securities as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date (as if
made at the Closing Date), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
10
<PAGE>
Statement or the Prospectus or otherwise) shall have been complied with to
your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in your opinion is
material, or omits to state a fact that in your opinion is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any change, on a
consolidated basis, in the capital stock (other than from stock issued
under employee benefit and stock option plans) or long-term debt (other
than from currency fluctuations and normal repurchases of long-term debt
for sinking fund purposes and scheduled repayments) of the Company and its
subsidiaries, or any adverse change, or any development involving a
prospective adverse change, in the condition (financial or other),
business, prospects, net worth (other than any decrease in net worth as a
result of the declaration by the Company of regular quarterly dividends on
its preferred stock and Common Stock) or results of operations of the
Company and its subsidiaries, or any change in the rating assigned to any
securities of the Company, that, in your judgment, makes it impractical or
inadvisable to offer or deliver the Securities on the terms and in the
manner contemplated in the Prospectus.
(d) You shall have received the opinion of William T. Satterwhite,
Esq., counsel for the Company, dated the Closing Date, to the effect that:
(i) Each of the Company, its United States subsidiaries and all
material non-United states subsidiaries have been duly incorporated
and is an existing corporation in good standing under the laws of its
jurisdiction of incorporation, has full power and authority (corporate
and other) to conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the Company
and its subsidiaries; and all of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized
and
11
<PAGE>
validly issued, are fully paid and non-assessable and (except as
otherwise stated in the Registration Statement) are owned beneficially
by the Company subject to no security interest, other encumbrance or
adverse claim;
(ii) The Indenture and the Securities have been duly authorized,
the Indenture has been duly qualified under the Trust Indenture Act,
executed and delivered, the Securities purchased by the Underwriters
have been duly executed, authenticated, issued and delivered, and the
Indenture and such Securities constitute, and any Contract Securities,
when executed, authenticated, issued and delivered in the manner
provided in the Indenture and the Delayed Delivery Contracts, will
constitute, valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles; and as to any Convertible Securities
purchased by the Underwriters or any Contract Securities which are
convertible into Common Stock ("Convertible Contract Securities"),
such Convertible Securities are, and such Convertible Contract
Securities, when executed, authenticated, issued and delivered in the
manner provided in the Indenture and the Delayed Delivery Contracts
will be, convertible into Common Stock of the Company in accordance
with the terms of the Indenture, the shares of Common Stock initially
issuable upon conversion of any Convertible Securities have been duly
authorized and reserved for issuance upon such conversion, and, when
so issued, will be validly issued, fully paid and non-assessable; and
the outstanding shares of Common Stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and
conform to the description thereof in the Prospectus, and the
shareholders of the Company have no preemptive rights with respect to
the Securities or the Common Stock;
(iii) The Registration Statement has become effective under the
Act; the Prospectus Supplement has been filed as required by Section
2(a) hereof; and to the best knowledge of such counsel no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened by the Commission;
12
<PAGE>
(iv) Each part of the registration statement, when such part
became effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the
Closing Date, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations; such counsel has no reason to believe that either any
part of the registration statement, when such part became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission or at the Closing Date, included an untrue statement of
a material fact or omitted 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 the documents incorporated by
reference in the Registration Statement or Prospectus or any amendment
or supplement thereto, when they became effective under the Act or
were filed with the Commission under the Exchange Act, as the case may
be, complied as to form in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; it being understood that
such counsel need express no opinion as to the financial statements or
other financial data and the description of the reports of DeGolyer
and MacNaughton, included in any of the documents mentioned in this
clause;
(v) The description in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings, contracts and other
documents are accurate and fairly present the information required to
be shown; the pipeline easements enjoyed by the Company and its
subsidiaries are valid, subsisting and enforceable easements with such
exceptions as are not material and do not interfere with the conduct
of the business of the Company and its subsidiaries; the gas purchase
contracts referred to in the Registration Statement and the Prospectus
are valid contracts in accordance with their terms; the leases,
operating agreements and other interests in gas acreage referred to in
the Registration Statement and Prospectus as held by the Company and
its subsidiaries entitle them to the rights therein purported to be
granted, subject to the jurisdiction of regulatory agencies to
establish allowable levels of production; the Company and its
subsidiaries possess all material licenses, franchises, permits,
authorizations, approvals, consents and orders of all governmental
authorities or
13
<PAGE>
agencies (including, without limitation, all certificates of public"
convenience and necessity issued by the Federal Energy Regulatory
Commission) necessary for the ownership or lease of the properties
owned or leased or proposed to be owned or leased by them and for the
operation of the business carried on or proposed to be carried on by
them as described in the Registration Statement and Prospectus; all
such licenses, franchises, permits, orders, authorizations, approvals
and consents are in full force and effect and contain no unduly
burdensome provisions and, except as otherwise set forth in the
Registration Statement and Prospectus, there are no legal or
governmental proceedings pending or threatened that would result in a
material modification, suspension or revocation thereof; and such
counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
(or required to be filed under the Exchange Act if upon such filing
they would be incorporated by reference therein) or to be filed as
exhibits to the Registration Statement that are not described and
filed as required;
(vi) This Agreement and any Delayed Delivery Contracts have been
duly authorized, executed and delivered by the Company; the
performance of this Agreement and of any Delayed Delivery Contracts
and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, any agreement or
instrument known to such counsel to which the Company is a party or by
which it is bound or to which any of the property of the Company is
subject, the Restated Articles of Incorporation, as amended, or By-
laws of the Company, or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no
consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the consummation
of the transactions contemplated by this Agreement in connection with
the issuance or sale of the Securities by the Company, except such as
have been obtained under the Act and the Trust Indenture Act and such
as may be required under state securities laws in connection with the
purchase and distribution of the Securities by the Underwriters; and
(vii) The Company is not a "holding company" or a "subsidiary
company" of a "holding company" within the
14
<PAGE>
meaning of the Public Utility Holding Company Act of 1935, as amended.
(e) You shall have received the opinion of Mudge Rose Guthrie
Alexander & Ferdon, counsel for the Underwriters, dated the Closing Date,
to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Texas;
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act; the Securities have been duly authorized, executed,
authenticated, issued and delivered; and the Indenture and the
Securities constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(iii) The Indenture and the Securities conform in all material
respects to the descriptions thereof contained in the Prospectus as
amended and supplemented; and
(iv) This Agreement has been duly authorized, executed and
delivered by the Company.
Such counsel shall also state in such opinion that although they are
not passing upon or assuming any responsibility for the accuracy,
completeness or fairness of any of the statements made in the Registration
Statement or the Prospectus or any amendment or supplement thereto, on the
basis of the information which they gained in the course of the services
specified in such opinion, in their opinion, each part of the Registration
Statement when such part became effective and the Prospectus, as amended or
supplemented on the date of this Agreement (other than certain incorporated
documents), appear on their face to comply as to form in all material
respects with the requirements of the Act, the Trust Indenture Act and the
Rules and Regulations. Such counsel shall further state in such opinion
that nothing which has come to their attention in the course of such review
has caused them to believe that any part of the Registration Statement,
when such part became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus, as amended or supplemented on the date of this
15
<PAGE>
Agreement, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Such counsel shall also state in such opinion that nothing which has come
to their attention has caused them to believe that the Prospectus, as
amended or supplemented as of the time of the delivery of such opinion,
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Notwithstanding
the foregoing, such counsel may state in such opinion that they are not
expressing any opinion or belief as to the financial statements or other
financial or statistical data contained in the Registration Statement, any
incorporated documents, the Prospectus and any amendment or supplement
thereto, or as to the estimates of reserves and other information included
in any thereof upon the authority of DeGolyer & MacNaughton, or as to the
statement of eligibility of the Trustee on Form T-1.
In rendering their opinion, such counsel may rely upon the opinion of
William T. Satterwhite, Esq., referred to above as to all matters governed
by Texas law.
(f) You shall have received a letter from Deloitte & Touche, dated the
Closing Date, to the effect set forth in Exhibit II hereto.
(g) You shall have received from the Company a certificate, signed by
the Chairman, the President or a Vice President, and by the principal
financial or accounting officer, of the Company, dated the Closing Date, to
the effect that, to the best of their knowledge based upon reasonable
investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the Closing
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened, by the Commission; and
16
<PAGE>
(iii) Since the date of this Agreement, there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth
and there has been no document required to be filed under the Exchange
Act and the rules and regulations of the Commission thereunder that
upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed.
(h) The Company shall have furnished to you such further certificates
and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
part of the registration statement when such part became effective, or in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon 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, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by you, or by any Underwriter through you, specifically for use in
the preparation thereof.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any
17
<PAGE>
part of the registration statement when such part became effective, or in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon 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, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made therein in reliance
upon and in conformity with written information furnished to the Company by you,
or by such Underwriter through you, specifically for use in the preparation
thereof, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
against any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the
18
<PAGE>
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering of the Securities (before deducting
expenses) received by the Company bear to the total compensation or profit
(before deducting expenses) received or realized by the Underwriters from the
purchase and resale, or underwriting, of the Securities. The 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 the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocations (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending against any
action or claim that is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
19
<PAGE>
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of and payment
for the Securities.
8. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter or
Underwriters shall fail to take up and pay for the amount of Securities agreed
by such Underwriter or Underwriters to be purchased hereunder, upon tender of
such Securities in accordance with the terms hereof, and the amount of
Securities not purchased does not aggregate more than 10% of the total amount of
Securities set forth in Schedule A hereto, the remaining Underwriters shall be
obligated to take up and pay for (in proportion to their respective underwriting
obligations hereunder as set forth in Schedule A hereto except as may otherwise
be determined by you) the Securities that the withdrawing or defaulting
Underwriter or Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Securities agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Securities in accordance with the terms
hereof, and the amount of Securities not purchased aggregates more than 10% of
the total amount of Securities set forth in Schedule A hereto, and arrangements
satisfactory to you and the Company for the purchase of such Securities by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination the Company shall not be under any
liability to any Underwriter (except to the extent provided in Section 4(g) and
Section 6 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the amount of Securities agreed by such Underwriter to be purchased
hereunder) be under any liability to the Company (except to the extent provided
in Section 6 hereof).
9. TERMINATION. You shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Agreement if (i) the Company shall have failed, refused or been unable, at
or prior to the Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) trading on the New York Stock Exchange or the
American Stock Exchange shall have been
20
<PAGE>
wholly suspended, (iv) minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York Stock Exchange or the American Stock Exchange, by such Exchange or
by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by Federal or
New York authorities, or (vi) an outbreak or escalation of hostilities in which
the United States is involved, any declaration by the United States of a
national emergency or war, or any other substantial national or international
calamity shall have occurred since the execution of this Agreement that, in your
judgment, makes it impractical or inadvisable to proceed with the completion of
the sale of and payment for the Securities to be purchased by the Underwriters.
Any such termination shall be without liability of any party to any other party
except that the provisions of Section 4(g) and Section 6 hereof shall at all
times be effective. If you elect to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by you by telephone or
telecopy, confirmed by letter.
10. NOTICES. All notices or communications hereunder shall be in
writing and if sent to you shall be mailed, delivered or telecopied and
confirmed to you at the address set forth for that purpose in Schedule B hereto,
or if sent to the Company, shall be mailed, delivered or telecopied and
confirmed to the Company c/o the Treasurer, at ENSERCH Center, 300 South St.
Paul Street, Dallas, Texas 75201-5598. Notice to any Underwriter pursuant to
Section 6 hereof shall be mailed, delivered or telecopied and confirmed to such
Underwriter's address as it appears in such Underwriter's questionnaire or other
notice furnished to the Company in writing for the purpose of communications
hereunder. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Company and the Underwriters and their respective successors
and the controlling persons, officers and directors referred to in Section 6
hereof, and no other person will have any right or obligation hereunder.
In all dealings with the Company under this Agreement, you shall act
on behalf of each of the several Underwriters, and any action under this
Agreement taken by you or by any one of you designated in Schedule B hereto will
be binding upon all the Underwriters.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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_______________
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between the Company and the several Underwriters. Alternatively, the
execution of this Agreement by the Company and its acceptance by or on behalf of
the Underwriters may be evidenced by an exchange of telecopy or other written
communications.
Very truly yours,
ENSERCH CORPORATION
By_____________________________
Name:
Title:
ACCEPTED as of the date first
above written.
- -----------------------------
- -----------------------------
- -----------------------------
By: _________________________
By __________________________
Name:
Title:
<PAGE>
SCHEDULE A
Principal
Amount of
Notes to be
Underwriter Purchased
----------- -----------
____________________ $ __________
- --------------------
____________________ $ ___________
-----------
Total $
===========
<PAGE>
SCHEDULE B
Underwriting Agreement dated _____________, 199_
Indenture dated as of ____________, 199_, between the Company and
____________________________________, as Trustee
Registration Statement No. 33-___________
Title of Securities: ______________________________
Amount of Securities: ______________________________
Denomination of Global
Security: ______________________________
Securities Depository: ______________________________
Purchase Price: ______________________________
Delayed Delivery: ______________________________
Closing-
Office for delivery of
Securities: _________________________
Office for payment for
Securities: _________________________
Specified Funds for Payment
of Purchase Price: __________________________
Date and time of Closing: __________________________
Form of Securities: __________________________
<PAGE>
Underwriting Discount: ____%
Address for notices per _________________________
Section 10:
Name of Underwriter to act _________________________
per Section 11:
Particular terms of the
Securities-
Interest: __________________________
Maturity: __________________________
Optional Redemption: __________________________
Sinking Fund: __________________________
Other terms: __________________________
ii
<PAGE>
EXHIBIT I
ENSERCH CORPORATION
[Title of Securities]
DELAYED DELIVERY CONTRACT
-------------------------
_________________ __, 199_
ENSERCH Corporation
c/o _________________________________
[As Representative of the Several Underwriters,]
_____________________
_____________________
_____________________
Gentlemen:
The undersigned hereby agrees to purchase from ENSERCH Corporation
("Company"), and the Company agrees to sell to the undersigned, [If one delayed
closing, insert -- as of the date hereof, for delivery on __________, 199_
("Delivery Date")] $__________ principal amount of the Company's _______________
("Securities"), offered by the Company's Prospectus relating thereto, receipt of
a copy of which is hereby acknowledged, at a purchase price of ___% of the
principal amount thereof plus accrued interest, if any, from _________ to the
Delivery Date and on the further terms and conditions set forth in this
contract.
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the amounts set forth
below:
DELIVERY DATE AMOUNT
------------- ------
_______________ ________
_______________ ________
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
<PAGE>
Payment for the Securities that the undersigned has agreed to purchase
for delivery on a Delivery Date shall be made to the Company or its order by
certified or official bank check in New York Clearing House (next day) funds at
the office of __________________ at ______ A.M. on that Delivery Date upon
delivery to the undersigned of the Securities to be purchased by the undersigned
for delivery on that Delivery Date in definitive form and in such denominations
and registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to that Delivery Date. If no request is received, the
Securities will be registered in the name of the undersigned and issued in a
denomination equal to the total amount of Securities to be purchased by the
undersigned on that Delivery Date.
The obligation of the Company to make delivery of and accept payment
for, and the obligation of the undersigned to take delivery of and make payment
for, Securities on a Delivery Date shall be subject only to the conditions that
(1) investment in the Securities shall not at that Delivery Date be prohibited
under the laws of any jurisdiction in the United States to which the undersigned
is subject, which investment the undersigned represents is not prohibited on the
date hereof, and (2) the Company shall have sold to the Underwriters the amount
of Securities to be sold to them pursuant to the Underwriting Agreement referred
to in the Prospectus mentioned above.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of this contract and any other
similar contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first-come, first-served basis. If this contract is
acceptable to the Company, it is requested that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned when such counterpart is so mailed or
delivered.
2
<PAGE>
This contract shall be governed by, and
construed in accordance with, the laws of the State of New York.
Very truly yours,
[Name of Purchaser]
By_____________________________
Name:
Title:
- -------------------------------
- -------------------------------
(Address of Purchaser)
Accepted, as of the above date.
ENSERCH CORPORATION
By_____________________________
Name:
Title:
3
<PAGE>
EXHIBIT II
1. They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the Rules and
Regulations.
2. In their opinion, the financial statements and any schedules
audited by them and included or incorporated by reference in the Registration
Statement and Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act, as
applicable, and the published rules and regulations of the Commission
thereunder. They have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS 71, Interim Financial Information, on the
unaudited financial statements included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus.
3. On the basis of procedures referred to in such letter, including a
reading of the minutes and the latest available interim financial statements of
the Company and inquiries of officials of the Company responsible for financial
and accounting matters, nothing caused them to believe that:
(A) Any material modifications should be made to the unaudited
financial statements, if any, included or incorporated by reference in the
Prospectus, for them to be in conformity with generally accepted accounting
principles;
(B) the unaudited financial statements, if any, included or
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act or
the Exchange Act and the published rules and regulations of the Commission
thereunder;
(C) the unaudited pro forma condensed consolidated financial
statements, if any, included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act and the published
rules and regulations of the Commission thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(D) at the date of the latest available internal balance sheet of the
Company and at a subsequent specified date not more than five days prior to
the date of such letter, there was any change in the capital stock (other
than from stock issued under employee benefit and stock option plans), or
any increase in long-term debt (other than from currency fluctuations and
normal repurchases of long-term debt for sinking fund purposes and
scheduled repayments) of the Company and its subsidiaries consolidated or
any decrease in
<PAGE>
consolidated net current assets or net assets (excluding any decrease in
net assets as a result of the declaration by the Company of regular
quarterly dividends on its preferred stock and Common Stock) as compared
with amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in all cases for changes, increases or
decreases that the Prospectus discloses have occurred or may occur or as
may be set forth in such letter; or
(E) for the period from the date of the latest income statement
included or incorporated by reference in the Prospectus to the date of the
latest available internal income statement of the Company, there was any
decrease, as compared with the corresponding period of the previous year in
consolidated revenues or in the total or per share amounts of income before
extraordinary items or of net income, except in all cases for changes or
decreases that the Prospectus discloses have occurred or may occur or as
may be set forth in such letter.
4. In addition to their audit referred to in their reports included
or incorporated by reference in the Registration Statement and Prospectus and
the procedures referred to in (3) above, they have carried out certain other
specified procedures, not constituting an audit, with respect to certain
specified dollar amounts, percentages and other financial information (in each
case to the extent that such dollar amounts, percentages and other financial
information are derived, directly or by analysis or computation, from the
general accounting records of the Company and its subsidiaries) that are
included or incorporated by reference in the Prospectus and appear in the
Prospectus or incorporated documents and have found such dollar amounts,
percentages and financial information to be in agreement with the general
accounting records of the Company and its subsidiaries.
2
<PAGE>
$
ENSERCH CORPORATION
% NOTES DUE
------------------
Dear :
ENSERCH Corporation (the "Company") intends to sell $___________ aggregate
principal amount of ___% Notes Due ____ (the "Notes") on (the
"Sale Date"). The Notes are described in the enclosed Registration Statement
and draft Prospectus Supplement. The Company anticipates subject to the terms
and provisions described in this letter, signing an Underwriting Agreement in
the form attached with the firm or firms submitting the offer which results in
the lowest cost of funds to the Company as determined in the sole discretion of
the Company.
After an offer is selected, the offering and sale of the Notes will proceed and
be documented like a normal negotiated sale. It is anticipated that the closing
will be held on , at the office of Mudge Rose Guthrie Alexander
& Ferdon, 180 Maiden Lane, 34th Floor, New York, New York 10038. Mudge Rose
has been designated as counsel to the prospective Underwriters. Persons at
Mudge Rose working on the proposed offering are Arnold Tracy (212/510-7400), Ted
Farris (212/510-7792) and Chris Moore (212/510-7568).
3
<PAGE>
Page 2
Offers should be made by telephone to Messrs. Benjamin A. Brown and R.L. Jay, or
the Company's other authorized representatives between 10:00 a.m. and 10:10 a.m.
Eastern Time on the Sale Date at the following telephone numbers at Mudge Rose
Guthrie Alexander & Ferdon, 180 Maiden Lane, New York, New York 10038,
conference rooms 33-2 and 33-3:
(212) 510-7070 (212) 510-7039
(212) 510-7025 (212) 510-7072
(212) 510-7000 (ask for conference rooms 33-2 or 33-3)
Each offer shall be for the purchase of the entire principal amount of the Notes
and shall set forth the following information:
. Fixed rate of interest (payable semiannually)
. Price to the Company (expressed as a percent of par)
. Price to the Public (expressed as a percent of par)
. Effective all-in-cost to the Company after reflecting all
underwriting discounts and commissions (expressed in percent to the
nearest tenth of a basis point)
Each offer must be confirmed by facsimile transmission with a completed offer
form (using the offer form attached to this letter) to one of the following
facsimile numbers at Mudge Rose not later than 10:30 a.m. Eastern Time on the
Sale Date.
(212) 248-2655 (212) 248-2657
An executed Underwriting Agreement signature page must accompany the faxed offer
form. Each telephone offer must provide the Company with (i) the name of the
offeror, (ii) a telephone number at which such offer may be immediately
confirmed and the name of the individual who will be authorized to provide such
confirmation, and (iii) the other information specified above.
The Company intends to make a prompt determination. If two or more offers
provide identical lowest cost of funds, all other offers will be rejected and
negotiations will proceed with the firms which made the identical offers. The
winning firm or firms will also be asked to supply any information necessary to
complete the Prospectus Supplement.
4
<PAGE>
Page 3
Each offer should be irrevocable until 10:30 a.m., New York City time, on the
Sale Date, unless earlier rejected by the Company or extended by the offeror.
Each offer will be selected or rejected in its entirety. Any offer not selected
by the Company prior to its expiration as provided herein shall be deemed to
have been rejected. The Company reserves the absolute right to reject any and
all offers at any time prior to the execution of the Underwriting Agreement or
to postpone the Sale Date in its discretion.
The winning offer will be formally accepted by execution of the facsimile
Underwriting Agreement signature page by 11:00 a.m. in New York City at the
offices of Mudge Rose Guthrie Alexander & Ferdon by an officer of the Company.
Executed originals of the completed Underwriting Agreement offer form and
Underwriting Agreement must be hand delivered in duplicate not later than 2:30
p.m. Eastern Time on the Sale Date to the above offices of Mudge Rose,
Attention: Chris Moore.
Please notify me by telephone (214/670-2204) or fax (214/573-3279) by 4:00 p.m.
on (i) whether you intend to submit an offer and (ii) of the
names of any other firms who are participating in your group, if any. It would
also be helpful if you could provide me at that time an example of your
calculation of the all in cost to the Company (after underwriting discount) so
that the Company is in agreement as to the method of calculation. The
calculation should include a sample purchase price, interest rate and all in
cost.
5
<PAGE>
Page 4
As counsel to the Underwriters in connection with the sale, Mudge Rose has
estimated its legal fees at $ , Plus an estimated $ for disbursements.
The winning firm(s) will be responsible for such fees and disbursements.
Any prospective Underwriter that wishes to discuss the contents of the
Registration Statement and the Prospectus Supplement may do so by calling me at
any time at 214/670-2204.
Any legal or procedural questions regarding the proposed offering or the
enclosed documents, may be discussed with Robert L. Jay (214/670-2850) of the
Company, or Chris Moore (212/510-7568) or Ted Farris (212/510-7792) of Mudge
Rose.
Very truly yours,
Benjamin A. Brown
Enclosures
cc: Dr. Sanford R. Singer
Mr. Arnold Tracy
6
<PAGE>
EXHIBIT 1.2
ENSERCH CORPORATION
PREFERRED STOCK AND COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
______________, 199_
Gentlemen:
ENSERCH Corporation, a Texas corporation ("Company"), confirms its
agreement with the several Underwriters listed in Schedule A hereto
("Underwriters", which term may refer to a single Underwriter if only one is
listed in Schedule A) as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue and sell to
the several Underwriters shares of its equity securities of the type, in the
quantities and with the terms set forth or referred to on Schedule B (the "Firm
Shares"). The Firm Shares may consist of shares of the Company's Common Stock
("Firm Common Shares"), $4.45 par value (the "Common Stock"), and/or shares of
its preferred stock ("Firm Preferred Shares") of one or more series (the
"Preferred Stock"). The Company proposes to issue and sell to the Underwriters,
at the option of the Underwriters, an additional number of shares of Common
Stock and/or Preferred Stock specified in Schedule B ("Optional Common Shares"
and "Optional Preferred Shares", respectively, and collectively, the "Optional
Shares") as provided in Section 3 hereof. Firm Common Shares and Optional
Common Shares are collectively called "Common Shares", Firm Preferred Shares and
Optional Preferred Shares are collectively called "Preferred Shares", and Firm
Shares and Optional Shares are collectively called the "Shares".
If Schedule B so provides, Preferred Shares may be deposited by the Company
against delivery of receipts (the "Depositary Receipts") to be issued by the
depositary (the "Depositary") named in the deposit agreement specified in
Schedule B (the "Deposit Agreement"), between the Company, the Depositary and
the holders from time to time of the Depositary Receipts issued thereunder
evidencing such Preferred Shares (the "Depositary Shares"). Each Depositary
Share will represent the number of or fraction of the number of deposited
Preferred Shares specified in Schedule B. If no Preferred Shares are
represented by Depositary Receipts, then all references herein to Depositary
Receipts and Depositary Shares of any kind and any agreements, instruments or
persons related thereto shall be disregarded and all
<PAGE>
representations, conditions, opinions and other documents relating to the
foregoing shall not apply to this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement on Form S-3 (with the file number set
forth in Schedule B hereto) including a prospectus, with respect to
securities of the Company, including the Shares, and of a special purpose
subsidiary of the Company, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
("Act") and the rules and regulations ("Rules and Regulations") of the
Securities and Exchange Commission ("Commission") thereunder and filed with
the Commission and has become effective. Such registration statement and
prospectus may have been amended or supplemented prior to the date of this
Agreement; any such amendment or supplement was so prepared and filed, and
any such amendment filed after the effective date of such registration
statement has become effective. No stop order suspending the effectiveness
of the registration statement has been issued, and no proceeding for that
purpose has been instituted or threatened by the Commission. A prospectus
supplement ("Prospectus Supplement") setting forth the terms of the Shares
and of their sale and distribution has been or will be so prepared and will
be filed pursuant to Rule 424(b) of the Rules and Regulations on or before
the second business day after the date hereof (or such earlier time as may
be required by the Rules and Regulations). Copies of such registration
statement and prospectus, any such amendment or supplement and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Agreement (including one fully
executed copy of the registration statement and of each amendment thereto
for each of you and for counsel for the Underwriters) have been delivered
to you. Such registration statement, as it may have heretofore been
amended, is referred to herein as the "Registration Statement", and the
final form of prospectus included in the Registration Statement, as
supplemented by the Prospectus Supplement, is referred to herein as the
"Prospectus". Each form of Prospectus, or Prospectus and Prospectus
Supplement, if any, heretofore made available for use in offering the
Shares is referred to herein as a "Preliminary Prospectus". Any reference
herein to the Registration Statement, the Prospectus, any amendment or
supplement thereto or any Preliminary Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein, and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement or Prospectus shall be deemed to
refer to and include the filing after the execution hereof of any
2
<PAGE>
document with the Commission deemed to be incorporated by reference
therein.
(b) Each part of the registration statement, when such part became or
becomes effective, each Preliminary Prospectus (if any) on the date of
filing thereof with the Commission, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and
at each Closing Date (as hereinafter defined), conformed or will conform in
all material respects with the requirements of the Act and the Rules and
Regulations; each part of the registration statement, when such part became
or becomes effective, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; each
Preliminary Prospectus (if any), on the date of filing thereof with the
Commission, and the Prospectus and any amendment or supplement thereto, on
the date of filing thereof with the Commission and at each Closing Date,
did not or will not include an 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
the statements made in such documents in response to Rule 4-10 of
Regulation S-X and the statements made in such documents within the
coverage of Rule 175(b) of the General Rules and Regulations under the Act
were made by the Company with a reasonable basis and in good faith; except
that the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written information
furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus, when they became or become effective under the Act
or were or are filed with the Commission under the Securities Exchange Act
of 1934, as amended ("Exchange Act"), as the case may be, conformed or will
conform in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(d) The financial statements of the Company and its subsidiaries set
forth in the Registration Statement and Prospectus fairly present the
financial condition of the Company and its subsidiaries as of the dates
indicated and the results of operations and cash flows for the periods
therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise stated therein).
3
<PAGE>
(e) The Company and each United States subsidiary and each material
non-United States subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of its
jurisdiction of incorporation, has full power and authority (corporate and
other) to conduct its business as described in the Registration Statement
and Prospectus and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction in
which it owns or leases real property or in which the conduct of its
business requires such qualification except where the failure to be so
qualified, considering all such cases in the aggregate, does not involve a
material risk to the business, properties, financial position or results of
operations of the Company and its subsidiaries; and all of the outstanding
shares of capital stock of each such subsidiary have been duly authorized
and validly issued, are fully paid and non-assessable and (except as
otherwise stated in the Registration Statement) are owned beneficially by
the Company subject to no security interest, other encumbrance or adverse
claim.
(f) The Company's authorized capitalization is as set forth in the
Prospectus and all outstanding shares of Common Stock of the Company and
any Common Shares to be issued and sold by the Company hereunder have been
duly authorized and are, or when issued as contemplated hereby will be,
validly issued, fully paid and non-assessable and conform, or when so
issued will conform, to the description thereof in the Prospectus, and the
shareholders of the Company have no preemptive rights with respect to such
Common Shares.
(g) Any Preferred Shares to be issued and sold by the Company
hereunder have been duly authorized, and, when a Statement of Resolution
fixing and determining the terms and conditions thereof is duly executed
and filed with the office of the Secretary of State of the State of Texas
and such Preferred Shares are duly executed, countersigned, issued and
delivered and paid for pursuant to this Agreement, such Preferred Shares
will be validly issued, fully paid and non-assessable and will conform to
the description thereof in the Prospectus, and the shareholders of the
Company have no preemptive rights with respect to such Preferred Shares;
and, as to any Preferred Shares which are convertible into Common Stock,
("Convertible Preferred Shares"), such Convertible Preferred Shares, when
issued as contemplated hereby, will be convertible into Common Stock in
accordance with their terms, the shares of Common Stock initially issuable
upon conversion of any Convertible Preferred Shares will have been duly
authorized and reserved for issuance upon such conversion, and, when so
issued, will be validly issued, fully paid and non-assessable.
4
<PAGE>
(h) When Depositary Receipts evidencing any Depositary Shares are
issued and delivered against deposit of Preferred Shares and against
payment for the Depositary Shares pursuant to this Agreement and the
Deposit Agreement, the Depositary Receipts will be legally issued and will
entitle the holders thereof to the rights specified in the Depositary
Receipts and the Deposit Agreement.
(i) The Deposit Agreement has been duly authorized and, when executed
and delivered by a duly authorized officer of the Company, will have been
duly executed and delivered and will constitute the valid and legally
binding obligation of the Company enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(j) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course of
business, that are material to the Company and its subsidiaries, and there
has not been any material change, on a consolidated basis, in the capital
stock (other than from stock issued under employee benefit and stock option
plans) or long-term debt (other than from currency fluctuations and normal
repurchases of long-term debt for sinking fund purposes and scheduled
repayments) of the Company and its subsidiaries, or any material adverse
change, or any development involving a prospective material adverse change,
in the condition (financial or other), business, prospects, net worth
(other than any decrease in net worth as a result of the declaration by the
Company of regular quarterly dividends on its preferred stock and Common
Stock) or results of operations of the Company and its subsidiaries
considered as a whole.
(k) Except as set forth in the Prospectus, there is not pending or, to
the knowledge of the Company, threatened any action, suit or proceeding to
which the Company or any of its subsidiaries is a party, before or by any
court or governmental agency or body, other than litigation incident to the
kind of business conducted by the Company, that might result in any
material adverse change in the condition (financial or other), business,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole, or might materially and adversely
affect the properties or assets thereof.
5
<PAGE>
(l) There are no contracts or documents of the Company or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by
the Act or the Exchange Act or by the rules and regulations of the
Commission thereunder that have not been so filed.
(m) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
statute, any agreement or instrument to which the Company is a party or by
which it is bound or to which any of the property of the Company is
subject, the Restated Articles of Incorporation, as amended, or By-laws of
the Company, or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company, except
such as may be required under the Act or state securities laws and such as
have been, or will have been prior to the First Closing Date, made with the
Secretary of State of the State of Texas; and the Company has full power
and authority to authorize, issue and sell the Shares as contemplated by
this Agreement.
(n) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property described in the Registration Statement and Prospectus as
being owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement and
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; the real properties referred
to in the Registration Statement and Prospectus as held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the conduct of the business of the Company and its
subsidiaries; the pipeline easements enjoyed by the Company and its
subsidiaries are valid, subsisting and enforceable easements with such
exceptions as are not material and do not interfere with the conduct of the
business of the Company and its subsidiaries; the gas purchase contracts
referred to in the Registration Statement and the Prospectus are valid
contracts in accordance with their terms; the leases, operating agreements
and other interests in gas acreage referred to in the Registration
Statement and Prospectus as held by the Company and its
6
<PAGE>
subsidiaries entitle them to the rights therein purported to be granted,
subject to the jurisdiction of regulatory agencies to establish allowable
levels of production; the Company and its subsidiaries possess all
licenses, franchises, permits, authorizations, approvals, consents and
orders of all governmental authorities or agencies (including, without
limitation, all certificates of public convenience and necessity issued by
the Federal Energy Regulatory Commission) necessary for the ownership or
lease of the properties owned or leased or proposed to be owned or leased
by them and for the operation of the business carried on or proposed to be
carried on by them as described in the Registration Statement and
Prospectus; all such licenses, franchises, permits, orders, authorizations,
approvals and consents are in full force and effect and contain no unduly
burdensome provisions and, except as otherwise set forth in the
Registration Statement and Prospectus, there are no legal or governmental
proceedings pending or threatened that would result in a material
modification, suspension or revocation thereof.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at the purchase price set forth in Schedule B hereto,
the respective number of Firm Common Shares and/or Firm Preferred Shares set
forth opposite the name of such Underwriter in Schedule A hereto.
If provided for in Schedule B, the Underwriters have the right (an
"Over-allotment Option") to purchase at their election up to the number of
Optional Common Shares and/or Optional Preferred Shares set forth in Schedule B,
at the terms set forth in the first paragraph of this Section 3, for the sole
purpose of covering over-allotments in the sale of the Firm Shares. Any such
election to purchase Optional Shares may be exercised only by written notice to
the Company, given within a period specified in Schedule B, setting forth the
aggregate number of Optional Common Shares and/or Optional Preferred Shares to
be purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Closing Date (as
defined in this Section 3) or, unless you and the Company otherwise agree in
writing, earlier than or later than the respective number of business days after
the date of such notice set forth in Schedule B.
The number of Optional Common Shares to be added to the number of the
Firm Common Shares to be purchased by each Underwriter as set forth in Schedule
A shall be, in each case, the number of Optional Common Shares which the Company
has been advised by you have been attributed to such Underwriter, provided that,
if
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the Company has not been so advised, the number of Optional Common Shares to be
so added shall be, in each case, that proportion of Optional Common Shares which
the number of Firm Common Shares to be purchased by such Underwriter bears to
the aggregate number of Firm Common Shares (rounded as you may determine to the
nearest share). The total number of Common Shares to be purchased by all the
Underwriters shall be the aggregate number of Firm Common Shares set forth in
Schedule A plus the aggregate number of the Optional Common Shares which the
Underwriters elect to purchase.
The number of Optional Preferred Shares to be added to the number of
the Firm Preferred Shares to be purchased by each Underwriter as set forth in
Schedule A shall be, in each case, the number of Optional Preferred Shares which
the Company has been advised by you have been attributed to such Underwriter,
provided that, if the Company has not been so advised, the number of Optional
Preferred Shares to be so added shall be, in each case, that proportion of
Optional Preferred Shares which the number of Firm Preferred Shares to be
purchased by such Underwriter bears to the aggregate number of Firm Preferred
Shares (rounded as you may determine to the nearest share). The total number of
Preferred Shares to be purchased by all the Underwriters shall be the aggregate
number of Firm Preferred Shares set forth in Schedule A plus the aggregate
number of the Optional Preferred Shares which the Underwriters elect to
purchase.
Certificates for the Firm Shares and Optional Shares to be purchased
by each Underwriter, in definitive form to the extent practicable, and in such
authorized denominations and registered in such names as you may request upon at
least forty-eight hours' prior notice to the Company, shall be delivered by or
on behalf of the Company to you or the Depositary, as the case may be, for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by certified or official bank check or
checks, payable to the order of the Company or, if so requested by the Company,
by wire transfer to a bank account designated by the Company in the funds
specified in Schedule B (it being understood that any Preferred Shares to be
issued in connection with any Depositary Shares shall be transferred and
delivered by or on behalf of the Company to the Depositary for deposit pursuant
to the Deposit Agreement against issuance to you for the account of the
Underwriters of one or more Depositary Receipts evidencing the Depositary Shares
to be purchased by each Underwriter hereunder). The place, time and date of
delivery of and payment for Firm Shares and Optional Shares shall be as
specified in Schedule B or at such other place, time and date as you and the
Company may agree upon in writing. Such time and date for delivery of Firm
Shares is herein called the "First Closing Date", such time and date for
delivery of Optional Shares, if not the First Closing Date, is herein called the
"Second Closing Date", and each such time and date is herein called the "Closing
Date".
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Depositary Receipts evidencing any Depositary Shares to be purchased
hereunder, in definitive form to the extent practicable and registered in such
names as provided above, shall be made available for checking and packaging at
least 48 hours prior to the respective Closing Date at the offices of the
Depositary. Such Depositary Receipts shall be available for release at the
respective Closing Date at such office.
It is understood that you, acting individually and not in a
representative capacity, may (but shall not be obligated to) make payment to the
Company on behalf of any other Underwriter for Shares to be purchased by such
Underwriter. Any such payment by you shall not relieve any such Underwriter of
any of its obligations hereunder.
The Company will pay to you, at each Closing Date, for the account of
each Underwriter any commission or other compensation with respect to the Shares
purchased on such Closing Date that is specified in Schedule B hereto. Unless
otherwise specified in Schedule B, such payment will be made by certified or
official bank check or checks in New York Clearing House (next day) funds.
4. COVENANTS. The Company covenants and agrees with each Underwriter
that:
(a) The Company will cause the Prospectus Supplement to be filed as
required by Section 2(a) hereof (but only if you have not reasonably
objected thereto by notice to the Company after having been furnished a
copy a reasonable time prior to filing) and will notify you promptly of
such filing. During the period in which a prospectus relating to the
Shares is required to be delivered under the Act, the Company will notify
you promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or for
additional information; it will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus that, in your opinion, may be
necessary or advisable in connection with the distribution of the Shares by
the Underwriters; it will file no amendment or supplement to the
Registration Statement or Prospectus (other than any prospectus supplement
relating to the offering of other securities registered under the
Registration Statement or any document required to be filed under the
Exchange Act that upon filing is deemed to be incorporated by reference
therein) to which you shall reasonably object by notice to the Company
after having been furnished a copy a reasonable time prior to the filing;
and it will furnish to you at or prior to the filing thereof a copy
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<PAGE>
of any such prospectus supplement or any document that upon filing is
deemed to be incorporated by reference in the Registration Statement or
Prospectus.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Shares for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose; and it will promptly use its best efforts to prevent
the issuance of any stop order or to obtain its withdrawal if such a stop
order should be issued.
(c) Within the time during which a prospectus relating to the Shares
is required to be delivered under the Act, the Company will comply as far
as it is able with all requirements imposed upon it by the Act and by the
Rules and Regulations, as from time to time in force, so far as necessary
to permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Prospectus. If during such
period any event occurs as a result of which the Prospectus as then amended
or supplemented would include an 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 then existing, not misleading, or if during
such period it is necessary to amend or supplement the Registration
Statement or Prospectus to comply with the Act, the Company will promptly
notify you and will amend or supplement the Registration Statement or
Prospectus (at the expense of the Company) so as to correct such statement
or omission or effect such compliance.
(d) The Company will use its best efforts to qualify the Shares for
sale under the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required
for the distribution of the Shares, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction. The
Company will also arrange for the determination of the eligibility for
investment of the Shares under the laws of such jurisdictions as you
reasonably request.
(e) The Company will furnish to the Underwriters copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and supplements to
the Registration Statement or Prospectus that are filed with the Commission
during the period in which a prospectus relating to the Shares is required
to be delivered under the Act (including all
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<PAGE>
documents filed with the Commission during such period that are deemed to
be incorporated by reference therein), in each case as soon as available
and in such quantities as you may from time to time reasonably request.
(f) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the
end of the Company's current fiscal quarter, an earnings statement (which
need not be audited) covering a 12-month period beginning after the date
upon which the Prospectus Supplement is filed pursuant to Rule 424 under
the Act that shall satisfy the provisions of Section 11(a) of the Act or
Rule 158 thereunder.
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
expenses incident to the performance of its obligations hereunder, will pay
(i) the expenses of printing all documents relating to the offering
including, without limitation, any cost of preparing certificates
representing the Preferred Stock, Depositary Receipts evidencing Depositary
Shares and/or Common Stock, (ii) the costs and expenses of the deposit of
Preferred Stock under any Deposit Agreement in exchange for Depositary
Receipts issued thereunder, including the charges of the Depositary in
connection therewith, (iii) to the extent set forth in any Deposit
Agreement, the fees of the Depositary and any agent appointed under the
Deposit Agreement, and (iv) the cost and charges of any transfer agent or
registrar or dividend disbursing agent, and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with the matters referred to in Section 4(d) hereof and
the preparation of memoranda relating thereto, for any filing fee of the
National Association of Securities Dealers, Inc. relating to the Shares for
any fees charged by investment rating agencies for rating Preferred Stock
or Depositary Shares. If the sale of Shares to be purchased by the several
Underwriters as provided for herein is not consummated by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of
the Underwriters' obligations hereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse the several
Underwriters for all reasonable out-of-pocket disbursements (including fees
and disbursements of counsel) incurred by the Underwriters in connection
with their investigation, preparing to market and marketing the Shares or
in contemplation of performing their obligations hereunder. The Company
shall not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.
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<PAGE>
(h) The Company will apply the net proceeds from the sale of the
Shares as set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell, or
determine to offer or sell, any Common Stock other than Common Stock issued
under employee benefit and stock option plans or any equity securities that
are substantially similar to any Preferred Shares to be issued and sold by
the Company hereunder (except under prior contractual commitments) during
the period ending on the earlier of the last Closing Date or 10 business
days after the date of this Agreement without your prior written consent.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for Firm Shares on the First Closing
Date and the Optional Shares on the Second Closing Date as provided herein shall
be subject to the accuracy, as of the date hereof and such Closing Date (as if
made at such Closing Date), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in your opinion is
material, or omits to state a fact that in your opinion is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any change, on a
consolidated basis, in the capital stock (other than from stock issued
under employee benefit and stock option plans) or long-term debt (other
than from currency fluctuations and normal repurchases of long-term debt
for sinking fund purposes and scheduled repayments) of the Company and its
subsidiaries, or any adverse change, or any development involving a
prospective adverse change, in the condition (financial or other),
business, prospects, net worth (other than any decrease in net worth as a
result of the declaration by the Company of regular quarterly dividends on
its preferred stock and Common Stock) or results of operations
12
<PAGE>
of the Company and its subsidiaries, or any change in the rating assigned
to any securities of the Company, that, in your judgment, makes it
impractical or inadvisable to offer or deliver the Shares to be purchased
on such Closing Date on the terms and in the manner contemplated in the
Prospectus.
(d) You shall have received the opinion of William T. Satterwhite,
Esq., counsel for the Company, dated such Closing Date, to the effect that:
(i) Each of the Company, its United States subsidiaries and all
material non-United states subsidiaries have been duly incorporated
and is an existing corporation in good standing under the laws of its
jurisdiction of incorporation, has full power and authority (corporate
and other) to conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the Company
and its subsidiaries; and all of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and (except as
otherwise stated in the Registration Statement) are owned beneficially
by the Company subject to no security interest, other encumbrance or
adverse claim;
(ii) The Company's authorized capitalization is as set forth in
the Prospectus and all outstanding shares of Common Stock of the
Company and any Common Shares to be delivered on such Closing Date
have been duly authorized and validly issued, are fully paid and non-
assessable and conform to the description thereof in the Prospectus,
and the shareholders of the Company have no preemptive rights with
respect to such Common Shares;
(iii) Any Preferred Shares to be purchased by the Underwriter
hereunder have been duly authorized; any Preferred Shares purchased by
the Underwriters on such Closing Date have been validly issued and are
fully paid and non-assessable and conform to the description thereof
in the Prospectus; as to any Convertible Preferred Shares purchased by
the Underwriters such Convertible Preferred Shares are convertible
into Common Stock in accordance with their terms, the shares of Common
Stock initially
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<PAGE>
issuable upon conversion of any Convertible Preferred Shares have been
duly authorized and reserved for issuance upon such conversion, and,
when so issued, will be validly issued, fully paid and non-assessable;
and the shareholders of the Company have no preemptive rights with
respect to any Preferred Shares to be purchased by the Underwriters
hereunder;
(iv) When Depositary Receipts evidencing Depositary Shares are
issued and delivered against deposit of Preferred Shares and against
payment for the Depositary Shares pursuant to this Agreement and the
Deposit Agreement, the Depositary Receipts will be legally issued and
will entitle the holders thereof to the rights specified in the
Depositary Receipts and the Deposit Agreement;
(v) The Depositary Agreement has been duly authorized, executed
and delivered and constitutes, the valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(vi) The Registration Statement has become effective under the
Act; the Prospectus Supplement has been filed as required by Section
2(a) hereof; and to the best knowledge of such counsel no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened by the Commission;
(vii) Each part of the registration statement, when such part
became effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at such
Closing Date, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; such counsel
has no reason to believe that either any part of the registration
statement, when such part became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
or at such Closing Date, included an untrue statement of a material
fact or omitted 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 the
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<PAGE>
documents incorporated by reference in the Registration Statement or
Prospectus or any amendment or supplement thereto, when they became
effective under the Act or were filed with the Commission under the
Exchange Act, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; it being understood that such counsel need express no
opinion as to the financial statements or other financial data and the
description of the reports of DeGolyer and MacNaughton, included in
any of the documents mentioned in this clause;
(viii) The description in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate and fairly present the information
required to be shown; the pipeline easements enjoyed by the Company
and its subsidiaries are valid, subsisting and enforceable easements
with such exceptions as are not material and do not interfere with the
conduct of the business of the Company and its subsidiaries; the gas
purchase contracts referred to in the Registration Statement and the
Prospectus are valid contracts in accordance with their terms; the
leases, operating agreements and other interests in gas acreage
referred to in the Registration Statement and Prospectus as held by
the Company and its subsidiaries entitle them to the rights therein
purported to be granted, subject to the jurisdiction of regulatory
agencies to establish allowable levels of production; the Company and
its subsidiaries possess all material licenses, franchises, permits,
authorizations, approvals, consents and orders of all governmental
authorities or agencies (including, without limitation, all
certificates of public" convenience and necessity issued by the
Federal Energy Regulatory Commission) necessary for the ownership or
lease of the properties owned or leased or proposed to be owned or
leased by them and for the operation of the business carried on or
proposed to be carried on by them as described in the Registration
Statement and Prospectus; all such licenses, franchises, permits,
orders, authorizations, approvals and consents are in full force and
effect and contain no unduly burdensome provisions and, except as
otherwise set forth in the Registration Statement and Prospectus,
there are no legal or governmental proceedings pending or threatened
that would result in a material modification, suspension or revocation
thereof; and such counsel does not know of any statutes or legal or
governmental proceedings required to be described in the Prospectus
that are not described as required, or of any contracts or documents
of a character
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<PAGE>
required to be described in the Registration Statement or Prospectus
(or required to be filed under the Exchange Act if upon such filing
they would be incorporated by reference therein) or to be filed as
exhibits to the Registration Statement that are not described and
filed as required;
(ix) This Agreement has been duly authorized, executed and
delivered by the Company; the performance of this Agreement and the
consummation of the transactions herein contemplated will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any agreement or instrument
known to such counsel to which the Company is a party or by which it
is bound or to which any of the property of the Company is subject,
the Restated Articles of Incorporation, as amended, or By-laws of the
Company, or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance or sale
of the Shares by the Company, except such as have been obtained under
the Act and such as may be required under state securities laws in
connection with the purchase and distribution of the Shares by the
Underwriters and, with respect to any Preferred Stock or Depositary
Shares, the filing of a Statement of Resolution with the Secretary of
State of the State of Texas; and
(x) The Company is not a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(e) You shall have received from Mudge Rose Guthrie Alexander &
Ferdon, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the
validity of the Shares being delivered on such Closing Date, the
Registration Statement, the Prospectus as amended and supplemented and
other related matters as you may reasonably request, and such counsel shall
have received such papers and information as they request to enable then to
pass upon such matters. In rendering their opinion, such counsel may rely
upon the opinion of William T. Satterwhite, Esq., referred to above as to
all matters governed by Texas law.
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(f) You shall have received a letter from Deloitte & Touche, dated
such Closing Date, to the effect set forth in Exhibit I hereto.
(g) You shall have received from the Company a certificate, signed by
the Chairman, the President or a Vice President, and by the principal
financial or accounting officer, of the Company, dated such Closing Date,
to the effect that, to the best of their knowledge based upon reasonable
investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of such Closing
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened, by the Commission; and
(iii) Since the date of this Agreement, there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth
and there has been no document required to be filed under the Exchange
Act and the rules and regulations of the Commission thereunder that
upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed.
(h) The Company shall have furnished to you such further certificates
and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
part of the registration statement when such part became
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effective, or in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon 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,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by you, or by any Underwriter through you, specifically
for use in the preparation thereof.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any part of the registration statement when such part became
effective, or in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon 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,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made therein in
reliance upon and in conformity with written information furnished to the
Company by you, or by such Underwriter through you, specifically for use in the
preparation thereof, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with
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<PAGE>
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering of the Shares (before deducting
expenses) received by the Company bear to the total compensation or profit
(before deducting expenses) received or realized by the Underwriters from the
purchase and resale, or underwriting, of the Shares. The 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 the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocations (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending against any
action or claim that is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in
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excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of and payment
for the Shares.
8. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter or
Underwriters shall fail to take up and pay for the number of Shares agreed by
such Underwriter or Underwriters to be purchased hereunder on any Closing Date,
upon tender of such Shares in accordance with the terms hereof, and the number
of Shares not purchased does not aggregate more than 10% of the total number of
Shares which the Underwriters are obligated to purchase on such Closing Date,
the remaining Underwriters shall be obligated to take up and pay for (in
proportion to their respective underwriting obligations hereunder as set forth
in Schedule A hereto except as may otherwise be determined by you) the Shares to
be purchased on such Closing Date that the withdrawing or defaulting Underwriter
or Underwriters agreed but failed to purchase.
20
<PAGE>
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the number of Shares agreed by such Underwriter or Underwriters to be
purchased hereunder on any Closing Date, upon tender of such Shares in
accordance with the terms hereof, and the number of Shares not purchased
aggregates more than 10% of the total number of Shares which the Underwriters
are obligated to purchase on such Closing Date, and arrangements satisfactory to
you and the Company for the purchase of such Shares by other persons are not
made within 36 hours thereafter, this Agreement shall terminate. In the event
of any such termination, the Company shall not be under any liability to any
Underwriter in respect of Shares not purchased on such Closing Date or at a
prior Closing Date (except to the extent provided in Section 4(g) and Section 6
hereof) nor shall any Underwriter (other than an Underwriter who shall have
failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Shares agreed by such Underwriter to be purchased
hereunder) be under any liability to the Company (except to the extent provided
in Section 6 hereof).
9. TERMINATION. You shall have the right by giving notice as
hereinafter specified at any time at or prior to any Closing Date, to terminate
this Agreement if (i) the Company shall have failed, refused or been unable, at
or prior to each Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) trading on the New York Stock Exchange or the
American Stock Exchange shall have been wholly suspended, (iv) minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the New York Stock Exchange or the
American Stock Exchange, by such Exchange or by order of the Commission or any
other governmental authority having jurisdiction, (v) a banking moratorium shall
have been declared by Federal or New York authorities, or (vi) an outbreak or
escalation of hostilities in which the United States is involved, any
declaration by the United States of a national emergency or war, or any other
substantial national or international calamity shall have occurred since the
execution of this Agreement that, in your judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Shares to be purchased by the Underwriters on such Closing Date. Any such
termination shall be without liability of any party to any other party in
respect of Shares not purchased on such Closing Date or at a prior Closing Date,
except that the provisions of Section 4(g) and Section 6 hereof shall at all
times be effective. If you elect to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by you by telephone or
telecopy, confirmed by letter.
21
<PAGE>
10. NOTICES. All notices or communications hereunder shall be in
writing and if sent to you shall be mailed, delivered or telecopied and
confirmed to you at the address set forth for that purpose in Schedule B hereto,
or if sent to the Company, shall be mailed, delivered or telecopied and
confirmed to the Company c/o the Treasurer, at ENSERCH Center, 300 South St.
Paul Street, Dallas, Texas 75201-5598. Notice to any Underwriter pursuant to
Section 6 hereof shall be mailed, delivered or telecopied and confirmed to such
Underwriter's address as it appears in such Underwriter's questionnaire or other
notice furnished to the Company in writing for the purpose of communications
hereunder. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Company and the Underwriters and their respective successors
and the controlling persons, officers and directors referred to in Section 6
hereof, and no other person will have any right or obligation hereunder.
In all dealings with the Company under this Agreement, you shall act
on behalf of each of the several Underwriters, and any action under this
Agreement taken by you or by any one of you designated in Schedule B hereto will
be binding upon all the Underwriters.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
22
<PAGE>
_______________
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between the Company and the several Underwriters. Alternatively, the
execution of this Agreement by the Company and its acceptance by or on behalf of
the Underwriters may be evidenced by an exchange of telecopy or other written
communications.
Very truly yours,
ENSERCH CORPORATION
-------------------
By_____________________________
Name:
Title:
ACCEPTED as of the date first
above written.
- -----------------------------
- -----------------------------
- -----------------------------
By: _________________________
By __________________________
Name:
Title:
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Firm Common
Shares to be
Underwriter Purchased
----------- ------------
<S> <C>
________________________________ ...................... ----------
________________________________ ...................... ----------
________________________________ ...................... ----------
Total..................................... ==========
</TABLE>
<TABLE>
<CAPTION>
Number of
Firm Preferred
Shares to be
Underwriter Purchased
----------- --------------
<S> <C>
________________________________ ...................... ----------
________________________________ ...................... ----------
________________________________ ...................... ----------
Total..................................... ==========
</TABLE>
<PAGE>
SCHEDULE B
Underwriting Agreement dated: __________________________________________________
Registration Statement No. 33-___________________
If Shares of Common Stock are to be issued -
Number of Firm Common Shares: _____________________________________________
Maximum Number of Optional Common Shares: _________________________________
Initial Offering Price to Public: _________________________________________
Purchase Price by Underwriters: ___________________________________________
If Shares of Preferred Stock are to be issued -
Board Resolution Fixing the Terms and Conditions of the Preferred Stock
dated: _______________
Title of Preferred Stock: _________________________________________________
Number of Firm Preferred Shares: __________________________________________
Maximum Number of Optional Preferred Shares: ______________________________
If Depositary Shares are to be issued -
Each Depositary Share will represent one-___ ( ) of a share of
Preferred Stock.
Name of Depositary: __________________________________________________
Depositary Agreement dated: __________________________________________
Initial Offering Price to Public: _________________________________________
Purchase Price by Underwriters: ___________________________________________
Particular terms of the Preferred Shares -
Dividend Rate: _______________________________________________________
Dividend Payment Dates: ______________________________________________
Dividend Rights: _____________________________________________________
Voting Rights: _______________________________________________________
Liquidation Value: ___________________________________________________
Preemptive Rights: ___________________________________________________
<PAGE>
Redemption Provisions: _______________________________________________
Sinking Fund Provisions: _____________________________________________
Other terms: _________________________________________________________
First Closing Date: ____________________________________________________________
Closing Location: ______________________________________________________________
Specified Funds for Payment of Purchase Price: _________________________________
Address for Notices per Section 10: ____________________________________________
Name of Underwriter to act per Section 11: _____________________________________
ii
<PAGE>
EXHIBIT I
1. They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the Rules and
Regulations.
2. In their opinion, the financial statements and any schedules
audited by them and included or incorporated by reference in the Registration
Statement and Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act, as
applicable, and the published rules and regulations of the Commission
thereunder. They have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS 71, Interim Financial Information, on the
unaudited financial statements included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus.
3. On the basis of procedures referred to in such letter, including
a reading of the minutes and the latest available interim financial statements
of the Company and inquiries of officials of the Company responsible for
financial and accounting matters, nothing caused them to believe that:
(A) Any material modifications should be made to the unaudited
financial statements, if any, included or incorporated by reference in the
Prospectus, for them to be in conformity with generally accepted accounting
principles;
(B) the unaudited financial statements, if any, included or
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act or
the Exchange Act and the published rules and regulations of the Commission
thereunder;
(C) the unaudited pro forma condensed consolidated financial
statements, if any, included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act and the published
rules and regulations of the Commission thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(D) at the date of the latest available internal balance sheet of the
Company and at a subsequent specified date not more than five days prior to
the date of such letter, there was any change in the capital stock (other
than from stock issued under employee benefit and stock option plans), or
any increase in long-term debt (other than from currency fluctuations and
normal repurchases of long-term debt for sinking fund purposes and
scheduled repayments) of the Company and its subsidiaries consolidated or
any decrease in
<PAGE>
consolidated net current assets or net assets (excluding any decrease in
net assets as a result of the declaration by the Company of regular
quarterly dividends on its preferred stock and Common Stock) as compared
with amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in all cases for changes, increases or
decreases that the Prospectus discloses have occurred or may occur or as
may be set forth in such letter; or
(E) for the period from the date of the latest income statement
included or incorporated by reference in the Prospectus to the date of the
latest available internal income statement of the Company, there was any
decrease, as compared with the corresponding period of the previous year in
consolidated revenues or in the total or per share amounts of income before
extraordinary items or of net income, except in all cases for changes or
decreases that the Prospectus discloses have occurred or may occur or as
may be set forth in such letter.
4. In addition to their audit referred to in their reports included
or incorporated by reference in the Registration Statement and Prospectus and
the procedures referred to in (3) above, they have carried out certain other
specified procedures, not constituting an audit, with respect to certain
specified dollar amounts, percentages and other financial information (in each
case to the extent that such dollar amounts, percentages and other financial
information are derived, directly or by analysis or computation, from the
general accounting records of the Company and its subsidiaries) that are
included or incorporated by reference in the Prospectus and appear in the
Prospectus or incorporated documents and have found such dollar amounts,
percentages and financial information to be in agreement with the general
accounting records of the Company and its subsidiaries.
2
<PAGE>
EXHIBIT 1.3
$_______________
ENSERCH CORPORATION
MEDIUM-TERM NOTES, SERIES A
AGENCY AGREEMENT
----------------
________________, 199__
[Name and Address
of Agents]
Dear Sirs:
1. INTRODUCTION. ENSERCH Corporation, a Texas corporation (the "Issuer"),
confirms its agreement with each of you (individually, an "Agent" and
collectively, the "Agents") with respect to the issue and sale from time to time
by the Issuer of up to $______________ aggregate principal amount of its Medium-
Term Notes, Series A, Due Not Less Than Nine Months from Date of Issue
registered under the registration statement referred to in Section 2(a) (any
such Medium-Term Notes, being hereinafter referred to as the "Securities", which
expression shall, if the context so admits, include any permanent global
Security). Securities may be sold pursuant to Section 3 of this Agreement or as
contemplated by Section 11 of this Agreement in an aggregate amount not to
exceed the amount of Registered Securities (as defined in Section 2(a) hereof)
registered pursuant to such registration statement reduced by the aggregate
amount of any other Registered Securities sold otherwise than pursuant to
Sections 3 and 11 of this Agreement. The Securities will be issued under an
Indenture, dated as of February 15, 1992 (the "Indenture"), between the Issuer
and The First National Bank of Chicago, as trustee (the "Trustee").
The Securities shall have the terms described in the Prospectus referred to
in Section 2(a) as it may be amended or supplemented from time to time,
including any supplement to the Prospectus that sets forth only the terms of a
particular issue of the Securities (a "Pricing Supplement"). Securities will be
issued, and the terms thereof established, from time to time
<PAGE>
by the Issuer in accordance with the Indenture and the Procedures (as defined in
Section 3(d) hereof).
2. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer represents
and warrants to, and agrees with, each Agent as follows:
(a) The Issuer meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder and has filed with the Commission a registration statement on
such form (No. 33-_________), including a prospectus, relating to
securities of the Issuer, including the Securities, and of a special
purpose subsidiary of the Issuer (the "Registered Securities"), which has
become effective under the Act. Such registration statement, as amended as
of the Closing Date (as defined in Section 3(e) hereof), is hereinafter
referred to as the "Registration Statement", and the prospectus included in
such Registration Statement, as supplemented as of the Closing Date,
including all material incorporated by reference therein, is hereinafter
referred to as the "Prospectus". Any reference in this Agreement to
amending or supplementing the Prospectus shall be deemed to include the
filing of materials incorporated by reference in the Prospectus after the
Closing Date and any reference in this Agreement to any amendment or
supplement to the Prospectus shall be deemed to include any such materials
incorporated by reference in the Prospectus after the Closing Date. The
Registration Statement, as may be amended or supplemented meets the
requirements set forth in Rule 415(a)(1)(x) and (a)(2) under the Act and
complies in all material respects with said Rule.
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act, the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act") and the rules and regulations of the
Commission thereunder (the "Rules and Regulations") and did not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and on the Closing Date, the Registration Statement and the
Prospectus, and at each of the times of acceptance and of delivery referred
to in Section 6(a) hereof and at each of the times of amendment or
supplementing referred to in Section 6(b) hereof (the Closing Date and each
such time being herein sometimes referred to as a "Representation Date"),
the Registration Statement and the Prospectus as then amended or
supplemented will conform in all material respects to the requirements of
the Act, the Trust Indenture Act and the Rules and Regulations, and neither
of such documents will include any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not apply to
2
<PAGE>
statements in or omissions from any of such documents based upon written
information furnished to the Issuer by any Agent specifically for use
therein. The Indenture, including any amendment and supplements thereto,
pursuant to which the Securities will be issued, will conform with the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission thereunder.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, when
they became or become effective under the Act or were or are filed with the
Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, conformed or will conform in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder.
(d) The financial statements of the Issuer and its subsidiaries set
forth in the Registration Statement and Prospectus fairly present the
financial condition of the Issuer and its subsidiaries as of the dates
indicated and the results of operations and cash flows for the periods
therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise stated therein).
(e) The Issuer and each United States subsidiary and each material
non-United States subsidiary of the Issuer has been duly incorporated and
is an existing corporation in good standing under the laws of its
jurisdiction of incorporation, has full power and authority (corporate and
other) to conduct its business as described in the Registration Statement
and Prospectus and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction in
which it owns or leases real property or in which the conduct of its
business requires such qualification except where the failure to be so
qualified, considering all such cases in the aggregate, does not involve a
material risk to the business, properties, financial position or results of
operations of the Issuer and its subsidiaries; and all of the outstanding
shares of capital stock of each such subsidiary have been duly authorized
and validly issued, are fully paid and non-assessable and (except as
otherwise stated in the Registration Statement) are owned beneficially by
the Issuer subject to no security interest, other encumbrance or adverse
claim.
(f) The Indenture and the Securities have been duly authorized, the
Indenture has been duly qualified under the Trust Indenture Act and
executed and delivered and constitutes, and the Securities, when duly
executed, authenticated, issued and delivered against payment therefore as
contemplated hereby and by the Indenture, will constitute, valid and
legally binding obligations of the Issuer enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general
3
<PAGE>
applicability relating to or affecting creditors' rights and to general
equity principles.
(g) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Issuer nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course of
business, that are material to the Issuer and its subsidiaries, and there
has not been any material change, on a consolidated basis, in the capital
stock (other than from stock issued under employee benefit and stock option
plans) or long-term debt (other than from currency fluctuations and normal
repurchases of long-term debt for sinking fund purposes and scheduled
repayments) of the Issuer and its subsidiaries, or any material adverse
change, or any development involving a prospective material adverse change,
in the condition (financial or other), business, prospects, net worth
(other than any decrease in net worth as a result of the declaration by the
Issuer of regular quarterly dividends on its preferred stock and Common
Stock) or results of operations of the Issuer and its subsidiaries
considered as a whole.
(h) Except as set forth in the Prospectus, there is not pending or,
to the knowledge of the Issuer, threatened any action, suit or proceeding
to which the Issuer or any of its subsidiaries is a party, before or by any
court or governmental agency or body, other than litigation incident to the
kind of business conducted by the Issuer, that might result in any material
adverse change in the condition (financial or other), business, prospects,
net worth or results of operations of the Issuer and its subsidiaries
considered as a whole, or might materially and adversely affect the
properties or assets thereof.
(i) There are no contracts or documents of the Issuer or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by
the Act, the Trust Indenture Act or the Exchange Act or by the rules and
regulations of the Commission thereunder that have not been so filed.
(j) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
statute, any agreement or instrument to which the Issuer is a party or by
which it is bound or to which any of the property of the Issuer is subject,
the Restated Articles of Incorporation, as amended, or By-laws of the
Issuer, or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Issuer or any of its
properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in
connection
4
<PAGE>
with the issuance or sale of the Securities by the Issuer, except such as
may be required under the Act, the Trust Indenture Act or state securities
laws; and the Issuer has full power and authority to authorize, issue and
sell the Securities as contemplated by this Agreement.
(k) The Issuer and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property described in the Registration Statement and Prospectus as
being owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement and
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Issuer and its subsidiaries; the real properties referred
to in the Registration Statement and Prospectus as held under lease by the
Issuer and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the conduct of the business of the Issuer and its
subsidiaries; the pipeline easements enjoyed by the Issuer and its
subsidiaries are valid, subsisting and enforceable easements with such
exceptions as are not material and do not interfere with the conduct of the
business of the Issuer and its subsidiaries; the gas purchase contracts
referred to in the Registration Statement and the Prospectus are valid
contracts in accordance with their terms; the leases, operating agreements
and other interests in gas acreage referred to in the Registration
Statement and Prospectus as held by the Issuer and its subsidiaries entitle
them to the rights therein purported to be granted, subject to the
jurisdiction of regulatory agencies to establish allowable levels of
production; the Issuer and its subsidiaries possess all licenses,
franchises, permits, authorizations, approvals, consents and orders of all
governmental authorities or agencies (including, without limitation, all
certificates of public convenience and necessity issued by the Federal
Energy Regulatory Commission) necessary for the ownership or lease of the
properties owned or leased or proposed to be owned or leased by them and
for the operation of the business carried on or proposed to be carried on
by them as described in the Registration Statement and Prospectus; all such
licenses, franchises, permits, orders, authorizations, approvals and
consents are in full force and effect and contain no unduly burdensome
provisions and, except as otherwise set forth in the Registration Statement
and Prospectus, there are no legal or governmental proceedings pending or
threatened that would result in a material modification, suspension or
revocation thereof.
5
<PAGE>
3. APPOINTMENT AS AGENTS; AGREEMENT OF AGENTS; SOLICITATIONS AS
AGENTS.
(a) Subject to the terms and conditions stated herein, the Issuer
hereby appoints each of the Agents as an agent of the Issuer for the
purpose of soliciting or receiving offers to purchase the Securities from
the Issuer by others. So long as this Agreement shall remain in effect
with respect to any Agent, the Issuer shall not, without the consent of any
such Agent, solicit or accept offers to purchase Securities otherwise than
through one of the Agents (except as contemplated by Section 11 hereof);
provided, however, that, subject to all of the terms and conditions of this
Agreement and any agreement contemplated by Section 11 hereof, the
foregoing shall not be construed to prevent the Issuer from selling at any
time any Registered Securities in a firm commitment underwriting pursuant
to an underwriting agreement that does not provide for a continuous
offering of such Registered Securities.
(b) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each
Agent agrees, as agent of the Issuer, to use its reasonable best efforts
when requested by the Issuer to solicit offers to purchase the Securities
upon the terms and conditions set forth in the Prospectus, as from time to
time amended or supplemented.
Upon receipt of notice from the Issuer as contemplated by Section 4(b)
hereof, each Agent shall suspend its solicitation of offers to purchase
Securities until such time as the Issuer shall have furnished it with an
amendment or supplement to the Registration Statement or the Prospectus, as
the case may be, contemplated by Section 4(b) and shall have advised such
Agent that such solicitation may be resumed.
The Issuer reserves the right, in its sole discretion, to instruct the
Agents to suspend solicitation of offers to purchase the Securities
commencing at any time for any period of time or permanently. As soon as
reasonably practicable, but in any event not later than one Business Day
after receipt of notice from the Issuer, the Agents will forthwith suspend
solicitation of offers to purchase Securities from the Issuer until such
time as the Issuer has advised the Agents that such solicitation may be
resumed. For the purpose of the foregoing sentence, "Business Day" shall
mean any day that is not a Saturday or Sunday, and that in The City of New
York is not a day on which banking institutions generally are authorized or
obligated by law or executive order to close.
The Agents are authorized to solicit offers to purchase Securities as
described in the Prospectus, as amended or supplemented and only in a
minimum aggregate amount of $100,000. Each Agent shall communicate to the
Issuer, orally or in writing, each reasonable offer to purchase Securities
received by it
6
<PAGE>
as agent. The Issuer shall have the sole right to accept offers to
purchase the Securities and may reject any such offer, in whole or in part.
Each Agent shall have the right, in its discretion reasonably exercised,
without notice to the Issuer, to reject any offer to purchase Securities
received by it, in whole or in part, and any such rejection shall not be
deemed a breach of its agreement contained herein.
No Security which the Issuer has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by
the Issuer, until such Security shall have been delivered to the purchaser
thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any Securities sold
by the Issuer as a result of a solicitation made by, or offer to purchase
received by, an Agent, the Issuer agrees to pay such Agent a commission in
accordance with the schedule set forth in Exhibit A hereto.
(d) Administrative procedures respecting the sale of Securities (the
"Procedures") shall be agreed upon from time to time by the Agents and the
Issuer. The initial Procedures, which are set forth in Exhibit B hereto,
shall remain in effect until changed by agreement among the Issuer and the
Agents promptly confirmed in writing. Each Agent and the Issuer agree to
perform the respective duties and obligations specifically provided to be
performed by each of them herein and in the Procedures. The Issuer will
furnish to the Trustee a copy of the Procedures as from time to time in
effect, and will furnish the Trustee a copy of the Procedures promptly
after any change therein.
(e) The documents required to be delivered by Section 5 hereof shall
be delivered at the office of Mudge Rose Guthrie Alexander & Ferdon, 180
Maiden Lane, New York, New York 10038, not later than 10:00 A.M., New York
City time, on the date of this Agreement or at such later time as may be
mutually agreed by the Issuer and the Agents, which in no event shall be
later than the time at which the Agents commence solicitation of purchases
of Securities hereunder, such time and date being herein called the
"Closing Date".
4. CERTAIN AGREEMENTS OF THE ISSUER. The Issuer agrees with the
Agents that it will furnish to Mudge Rose Guthrie Alexander & Ferdon, counsel
for the Agents, ______________ signed copies of the registration statement
relating to the Registered Securities, including all exhibits, in the form that
it became effective and of all amendments thereto and that, in connection with
each offering of Securities,
7
<PAGE>
(a) The Issuer will advise each Agent promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus and will
afford the Agents a reasonable opportunity to comment on any such proposed
amendment or supplement (other than any Pricing Supplement that relates to
Securities not purchased through or by such Agent); and the Issuer will
also advise each Agent of the filing and effectiveness of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act and no suspension of solicitation of
offers to purchase Securities pursuant to Section 3(b) or this Section 4(b)
shall be in effect (any such time and any time when either any Agent shall
own any Securities with the intention of reselling them or the Issuer has
accepted an offer to purchase Securities but the related settlement has not
occurred being referred to herein as a "Marketing Time"), any event occurs
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading, or
if it is necessary at any such time to amend the Prospectus to comply with
the Act, the Issuer will promptly notify each Agent to suspend solicitation
of offers to purchase the Securities; and if the Issuer shall decide to
amend or supplement the Registration Statement or the Prospectus, it will
promptly advise each Agent by telephone (with confirmation in writing) and,
subject to the provisions of subsection (a) of this Section, will promptly
prepare and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance and will supply any such amended or supplemented Prospectus to
such Agent in such quantities as such Agent may reasonably request.
Notwithstanding the foregoing, if, at the time any such event occurs or it
becomes necessary to amend the Prospectus to comply with the Act, any Agent
shall own any of the Securities with the intention of reselling them, or
the Issuer has accepted an offer to purchase Securities but the related
settlement has not occurred, the Issuer, subject to the provisions of
subsection (a) of this Section, will promptly prepare and file with the
Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance and will supply
any such amended or supplemented Prospectus to such Agent in such
quantities as such Agent may reasonably request. Neither the Agents'
consent to, nor their delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
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(c) The Issuer will file promptly all documents required to be filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act. In addition, on or prior to the date on which the Issuer
makes any announcement to the general public concerning earnings or
concerning any other event which is required to be described, or which the
Issuer proposes to describe, in a document filed pursuant to the Exchange
Act, the Issuer will furnish the information contained or to be contained
in such announcement to each Agent, confirmed in writing and, subject to
the provisions of subsections (a) and (b) of this Section, will cause the
Prospectus to be amended or supplemented to reflect the information
contained in such announcement. The Issuer also will furnish each Agent
with copies of all other press releases or announcements to the general
public. The Issuer will immediately notify each Agent of any downgrading
in the rating of the Securities or any other debt securities of the Issuer
or any proposal to downgrade the rating of the Securities or any other debt
securities of the Issuer by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance
or review its rating of any debt securities of the Issuer (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading of such rating), as soon as the
Issuer learns of such downgrading, proposal to downgrade or public
announcement.
(d) As soon as practicable, after the date of each acceptance by the
Issuer of an offer to purchase Securities hereunder, but in any event not
later than the Applicable Availability Date (as defined below), the Issuer
will make generally available to its security-holders an earnings statement
covering a period of at least 12 months beginning after the Applicable
Effective Date (as defined below) which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder. For the purpose of the
preceding sentence only, "Applicable Effective Date" means the latest of
(i) the effective date of the registration statement relating to the
Registered Securities, (ii) the effective date of the most recent post-
effective amendment to such registration statement to become effective
prior to the date of such acceptance, and (iii) the date of filing of the
Issuer's most recent Annual Report on Form 10-K filed with the Commission
prior to the date of such acceptance, and "Applicable Availability Date"
means (A) the 45th day after the end of the fourth fiscal quarter following
the fiscal quarter that includes the Applicable Effective Date or (B) if
such fourth fiscal quarter is the last quarter of the Issuer's fiscal year,
the 90th day after the end of such fourth fiscal quarter.
(e) The Issuer will furnish to each Agent copies of the Registration
Statement, including all exhibits, the Prospectus and all amendments and
supplements to such documents (including any Pricing Supplement), in each
case as soon as available and in such quantities as are reasonably
requested.
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(f) The Issuer will arrange for the qualification of the Securities
for sale and the determination of their eligibility for investment under
the laws of such jurisdictions as the Agents designate and will continue
such qualifications in effect so long as required for the distribution;
provided, however, that in connection therewith the Issuer shall not be
required to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified other than the State of
New York or to file a general consent to service of process in any
jurisdiction.
(g) So long as any Securities are outstanding, the Issuer will
furnish to the Agents, (i) as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such year,
(ii) as soon as available, a copy of each report or definitive proxy
statement of the Issuer filed with the Commission under the Exchange Act or
mailed to stockholders, and (iii) from time to time, such other information
concerning the Issuer as the Agents may reasonably request; provided,
however, that the Issuer need furnish exhibits to the reports specified in
clause (ii) only to the extent requested by the Agents.
(h) The Issuer will pay all expenses incident to the performance of
its obligations under this Agreement or any agreement contemplated by
Section 11 hereof and will reimburse each Agent for any expenses (including
fees and disbursements of counsel) incurred by it in connection with
qualification of the Securities for sale and determination of their
eligibility for investment under the laws of such jurisdictions as such
Agent may designate and the printing of memoranda relating thereto, for any
fees charged by investment rating agencies for the rating of the
Securities, for any filing fee of the National Association of Securities
Dealers, Inc. relating to the Securities, for expenses incurred by each
Agent in distributing the Prospectus and all supplements thereto (including
any Pricing Supplement), for costs incurred by each Agent in advertising
any offering of Securities and for each Agent's reasonable expenses
(including the fees and disbursements of counsel to the Agents) incurred in
connection with the establishment or maintenance of the program
contemplated by this Agreement or otherwise in connection with the
activities of the Agents under this Agreement.
5. CONDITIONS OF OBLIGATIONS. The obligation of each Agent, as
agent of the Issuer, under this Agreement at any time to solicit offers to
purchase the Securities is subject to the accuracy, on the date hereof, on each
Representation Date and on the date of each such solicitation, of the
representations and warranties of the Issuer herein, to the accuracy, on each
such date, of the statements of the Issuer's officers made pursuant to the
provisions hereof, to the performance, on or prior to each such date, by the
Issuer of its obligations hereunder, and to each of the following additional
conditions precedent:
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(a) The Prospectus, as amended or supplemented as of any
Representation Date or date of such solicitation, as the case may be, shall
have been filed with the Commission in accordance with the Rules and
Regulations and no stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Issuer or any Agent, shall be contemplated by the
Commission.
(b) Neither the Registration Statement nor the Prospectus, as amended
or supplemented as of any Representation Date or date of such solicitation,
as the case may be, shall contain any untrue statement of fact which, in
the opinion of any Agent, is material or omit to state a fact which, in the
opinion of any Agent, is material and is required to be stated therein or
is necessary to make the statements therein not misleading, other than any
statement contained in, or other matter omitted from, the Registration
Statement or Prospectus in reliance upon, and in conformity with,
information furnished in writing by the Agents to the Issuer expressly for
use in the Registration Statement or Prospectus.
(c) There shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business
or properties of the Issuer and its subsidiaries on a consolidated basis
which, in the judgment of such Agent, makes it impracticable or inadvisable
to proceed with the soliciting of offers to purchase the Securities as
contemplated by the Registration Statement or the Prospectus, (ii) any
downgrading in the rating of the Securities or any other debt securities of
the Issuer by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities of the Issuer (other than any
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Issuer on
any exchange or in the over-the-counter market if, in the judgment of such
Agent, any such event or any condition giving rise thereto or existing
concurrently therewith makes it impracticable or inadvisable to proceed
with the solicitation of offers to purchase, or sales of, Securities on the
terms and in the manner contemplated by the applicable Pricing Supplement
and the Prospectus; (iv) any banking moratorium declared by Federal or New
York authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of such Agent, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with solicitations of offers to purchase, or sales of, Securities
on the
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terms and in the manner contemplated by the applicable Pricing Supplement
and the Prospectus.
(d) At the Closing Date, the Agents shall have received an opinion,
dated the Closing Date, of William T. Satterwhite, Esq., counsel for the
Issuer, to the effect that:
(i) Each of the Issuer, its United States subsidiaries and all
material non-United States subsidiaries have been duly incorporated
and is an existing corporation in good standing under the laws of its
jurisdiction of incorporation, has full power and authority (corporate
and other) to conduct its business as described in the Registration
Statement and Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the Issuer
and its subsidiaries; and all of the outstanding shares of capital
stock of each of the Issuer's subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and (except as
otherwise stated in the Registration Statement) are owned beneficially
by the Issuer subject to no security interest, other encumbrance or
adverse claim;
(ii) The Indenture has been duly authorized, executed and
delivered by the Issuer and has been duly qualified under the Trust
Indenture Act and constitutes a valid and legally binding obligation
of the Issuer enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization or
other laws of general applicability relating to or affecting
creditor's rights and to general equitable principles;
(iii) Any series of Securities established on or prior to the
date of such opinion has been duly authorized and established in
conformity with the Indenture, and, when the terms of a particular
Security and of its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity with the
Indenture, and such Security has been duly completed, executed,
authenticated and issued in accordance with the Indenture and
delivered against payment as contemplated by this Agreement, such
Security will constitute a valid and legally binding obligation of the
Issuer enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization or
other laws of general applicability relating to or affecting
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creditor's rights and to general equitable principles, and the
Securities, when so issued and delivered and sold, will conform, in
all material respects, to the description thereof contained in the
Prospectus, it being understood that such counsel may assume that at
the time of the issuance, sale and delivery of each Security (a) the
authorization of such series will not have been modified or rescinded
and there will not have occurred any change in law affecting the
validity, legally binding character or enforceability of such
Security, and (b) that neither of the issuance, sale and delivery of
any Security, nor any of the terms of such Security, nor compliance by
the Issuer with such terms, will violate any then applicable law, any
agreement or instrument then binding upon the Issuer or any
restriction then imposed by any court or governmental body having
jurisdiction over the Issuer;
(iv) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Act specified in such opinion on
the date specified therein, and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or threatened by the
Commission;
(v) Each part of the registration statement relating to the
Registered Securities, when such part became effective, and the
Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the Closing Date, complied
as to form in all material respects with the requirements of the Act,
the Trust Indenture Act and the Rules and Regulations; such counsel
has no reason to believe that either any part of the registration
statement relating to the Registered Securities, when such part became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus and
any amendment or supplement thereto, on the date of filing thereof
with the Commission or at the Closing Date, included an untrue
statement of a material fact or omitted 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 the
documents incorporated by reference in the Registration Statement or
Prospectus or any amendment or supplement thereto, when they became
effective under the Act or were filed with the Commission under the
Exchange Act, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; it being understood that such counsel need express no
opinion as to the financial statements or
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other financial data and the description of the reports of DeGolyer
and MacNaughton, included in any of the documents mentioned in this
clause;
(vi) The description in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings, contracts and other
documents are accurate and fairly present the information required to
be shown; the pipeline easements enjoyed by the Issuer and its
subsidiaries are valid, subsisting and enforceable easements with such
exceptions as are not material and do not interfere with the conduct
of the business of the Issuer and its subsidiaries; the gas purchase
contracts referred to in the Registration Statement and the Prospectus
are valid contracts in accordance with their terms; the leases,
operating agreements and other interests in gas acreage referred to in
the Registration Statement and Prospectus as held by the Issuer and
its subsidiaries entitle them to the rights therein purported to be
granted, subject to the jurisdiction of regulatory agencies to
establish allowable levels of production; the Issuer and its
subsidiaries possess all material licenses, franchises, permits,
authorizations, approvals, consents and orders of all governmental
authorities or agencies (including, without limitation, all
certificates of public convenience and necessity issued by the Federal
Energy Regulatory Commission) necessary for the ownership or lease of
the properties owned or leased or proposed to be owned or leased by
them and for the operation of the business carried on or proposed to
be carried on by them as described in the Registration Statement and
Prospectus; all such licenses, franchises, permits, orders,
authorizations, approvals and consents are in full force and effect
and contain no unduly burdensome provisions and, except as otherwise
set forth in the Registration Statement and Prospectus, there are no
legal or governmental proceedings pending or threatened that would
result in a material modification, suspension or revocation thereof;
and such counsel does not know of any statutes or legal or
governmental proceedings required to be described in the Prospectus
that are not described as required, or of any contracts or documents
of a character required to be described in the Registration Statement
or Prospectus (or required to be filed under the Exchange Act if upon
such filing they would be incorporated by reference therein) or to be
filed as exhibits to the Registration Statement that are not described
and filed as required;
(vii) The Issuer's authorized equity capitalization is as set
forth in the Prospectus (if contained therein);
(viii) This Agreement has been duly authorized, executed and
delivered by the Issuer;
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(ix) The performance of this Agreement, the issue and sale of the
Securities, the consummation of the other transactions herein
contemplated and the fulfillment of the terms hereof will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any agreement or instrument
known to such counsel to which the Issuer is a party or by which it is
bound or to which the property of the Issuer is subject, the Restated
Articles of Incorporation, as amended, or By-laws of the Issuer, or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Issuer or any
of its properties (it being understood that such counsel may assume
with respect to each particular Security that the inclusion of any
alternative or additional terms in such Security that are not
currently specified in the forms of Securities examined by such
counsel will not cause the issuance, sale or delivery of such
Security, the terms of such Security, or the compliance by the Issuer
with such terms, to violate any of the court orders or laws specified
in this paragraph or to result in a default under or a breach of any
of the agreements specified in this paragraph);
(x) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Securities by the Issuer,
except such as have been obtained and made under the Act and the Trust
Indenture Act and as may be required under state securities laws (it
being understood that such counsel may assume with respect to each
particular Security that the inclusion of any alternative or
additional terms in such Security that are not currently specified in
the forms of Securities examined by such counsel would not require the
Issuer to obtain any regulatory consent, authorization or approval or
make any regulatory filing in order for the Issuer to issue, sell and
deliver such Security); and
(xi) The Issuer is not a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Issuer and public officials.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the Chairman, the President or any
Vice President and a principal financial or accounting officer of the
Issuer in which such officers, shall state that, to the best of their
knowledge after reasonable investigation, (i)
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the representations and warranties of the Issuer in this Agreement are true
and correct, (ii) the Issuer has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, (iii) no stop order suspending the effectiveness
of the Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission, and (iv) subsequent to the date of the most recent
financial statements included or incorporated by reference in the
Prospectus, there has been no material adverse change in the financial
position or results of operations of the Issuer and its subsidiaries,
except as set forth in or contemplated by the Prospectus.
(f) At the Closing Date, the Agents shall have received a letter,
dated the Closing Date, of Deloitte & Touche, confirming that they are
independent certified public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating in
effect that:
(i) In their opinion, the financial statements and any schedules
audited by them and included or incorporated by reference in the
Registration Statement and Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act, as applicable, and the published rules and
regulations of the Commission thereunder. They have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited financial statements, if
any, included or incorporated by reference in the Prospectus.
(ii) On the basis of procedures referred to in such letter,
including a reading of the minutes and the latest available interim
financial statements of the Issuer and inquiries of officials of the
Issuer responsible for financial and accounting matters, nothing
caused them to believe that:
(A) Any material modifications should be made to the
unaudited financial statements, if any, included or incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) the unaudited financial statements, if any, included or
incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act and the published
rules and regulations of the Commission thereunder;
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(C) the unaudited pro forma condensed consolidated financial
statements, if any, included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange
Act and the published rules and regulations of the Commission
thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(D) at the date of the latest available internal balance
sheet of the Issuer and at a subsequent specified date not more
than five days prior to the date of such letter, there was any
change in the capital stock (other than from stock issued under
employee benefit and stock option plans), or any increase in
long-term debt (other than from currency fluctuations and normal
repurchases of long-term debt for sinking fund purposes and
scheduled repayments) of the Issuer and its subsidiaries
consolidated or any decrease in consolidated net current assets
or net assets (excluding any decrease in net assets as a result
of the declaration by the Issuer of regular quarterly dividends
on its preferred stock and Common Stock) as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in all cases for changes,
increases or decreases that the Prospectus discloses have
occurred or may occur or as may be set forth in such letter; or
(E) for the period from the date of the latest income
statement included or incorporated by reference in the Prospectus
to the date of the latest available internal income statement of
the Issuer, there was any decrease, as compared with the
corresponding period of the previous year in consolidated
revenues or in the total or per share amounts of income before
extraordinary items or of net income, except in all cases for
changes or decreases that the Prospectus discloses have occurred
or may occur or as may be set forth in such letter.
(iii) In addition to their audit referred to in their reports
included or incorporated by reference in the Registration Statement
and Prospectus and the procedures referred to in (3) above, they have
carried out certain other specified procedures, not constituting an
audit, with respect to
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certain specified dollar amounts, percentages and other financial
information (in each case to the extent that such dollar amounts,
percentages and other financial information are derived, directly or
by analysis or computation, from the general accounting records of the
Issuer and its subsidiaries) that are included or incorporated by
reference in the Prospectus and appear in the Prospectus or
incorporated documents and have found such dollar amounts, percentages
and financial information to be in agreement with the general
accounting records of the Issuer and its subsidiaries.
(g) The Agents shall have received from Mudge Rose Guthrie Alexander
& Ferdon, counsel for the Agents, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Issuer, the validity
of the Securities, the Registration Statement, the Prospectus, the
conclusions of law set forth under the caption "United States Taxation" in
the Prospectus and other related matters as they may require, and the
Issuer shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters. In rendering
such opinion, Mudge Rose Guthrie Alexander & Ferdon may rely upon the
opinion of William T. Satterwhite, Esq., counsel for the Issuer as to all
matters governed by Texas law.
(h) Subsequent to the execution of this Agreement (1) the Issuer
shall not have received notice that either Moody's Investors Service Inc.
("Moody's"), Standard & Poor's Corporation ("S&P") or Duff and Phelps
("D&P") intends to reduce, or is considering a reduction in, the ratings of
any of the Issuer's debt securities unless Moody's, S&P's or D&P's
intention to so reduce or consideration of such a reduction is then
publicly known and (2) the Issuer's debt securities shall be rated as
investment grade debt by Moody's, S&P and D&P.
(i) The Issuer will furnish the Agents with such conformed copies of
such opinions, certificates, letters and documents as they may reasonably
request.
6. ADDITIONAL COVENANTS OF THE ISSUER. The Issuer agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase of
Securities shall be deemed to be an affirmation that its representations
and warranties contained in this Agreement are true and correct at the time
of such acceptance and a covenant that such representations and warranties
will be true and correct at the time of delivery to the purchaser of the
Securities as though made at and as of each such time, it being understood
that such representations and warranties shall relate to the Registration
Statement and the Prospectus as amended or supplemented at each such time.
Each such acceptance by the Issuer of an offer for the purchase of
Securities shall be deemed to constitute an additional representation,
warranty and agreement by the Issuer that, as of the
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settlement date for the sale of such Securities, after giving effect to the
issuance of such Securities, of any other Securities to be issued on or
prior to such settlement date and of any other Registered Securities to be
issued and sold by the Issuer on or prior to such settlement date, the
aggregate amount of Registered Securities (including any Securities) which
have been issued and sold by the Issuer will not exceed the amount of
Registered Securities registered pursuant to the Registration Statement.
(b) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), the Issuer
shall, (A) concurrently with such amendment or supplement, if such
amendment or supplement shall occur during a Marketing Time, or (B) at or
immediately prior to commencement of the next Marketing Time if such
amendment or supplement shall not occur during a Marketing Time, furnish
the Agents with a certificate, dated the date of delivery thereof, of the
Chairman, the President or any Vice President and a principal financial or
accounting officer of the Issuer, in form satisfactory to the Agents, to
the effect that the statements contained in the certificate covering the
matters set forth in Section 5(e) hereof which was last furnished to the
Agents are true and correct at the time of such amendment or supplement, as
though made at and as of such time or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
5(e); provided, however, that any certificate furnished under this Section
6(b) shall relate to the Registration Statement and the Prospectus as
amended or supplemented at the time of delivery of such certificate and, in
the case of the matters set forth in clause (ii) of Section 5(e), to the
time of delivery of such certificate.
(c) At each Representation Date referred to in Section 6(b), the
Issuer shall (A) concurrently if such Representation Date shall occur
during a Marketing Time, or (B) at or immediately prior to commencement of
the next Marketing Time if such Representation Date shall not occur during
a Marketing time, furnish the Agents with a written opinion or opinions,
dated the date of such Representation Date, of counsel for the Issuer, in
form satisfactory to the Agents, to the effect set forth in Section 5(d)
hereof; provided, however, that to the extent appropriate such opinion or
opinions may reconfirm matters set forth in a prior opinion delivered under
Section 5(d) or this Section 6(c); provided further, however, that any
opinion or opinions furnished under this Section 6(c) shall relate to the
Registration Statement and the Prospectus as amended or supplemented at the
time of delivery of such opinion or opinions and shall state that the
Securities sold in the relevant Applicable Period have been duly executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Issuer enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization or other laws of general applicability relating to or
affecting creditor's rights and to
19
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general equitable principles, and conform to the description thereof
contained in the Prospectus as amended or supplemented at the relevant
settlement date or dates for the sale of such Securities. For the purpose
of this Section 6(c), "Applicable Period" shall mean with respect to any
opinion delivered pursuant to this Section 6(c) the period commencing on
the date of the most recent prior opinion delivered under Section 5(d) or
this Section 6(c) and ending on the date of delivery of the opinion to be
delivered pursuant to this Section 6(c).
(d) At each Representation Date referred to in Section 6(b) on which
the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information, the Issuer shall
cause Deloitte & Touche (A) concurrently if such Representation Date shall
occur during a Marketing time, or (B) at or immediately prior to
commencement of the next Marketing Time if such Representation Date shall
not occur during a Marketing Time, to furnish the Agents with a letter,
addressed jointly to the Issuer and the Agents and dated the date of
delivery of such letter, in form and substance satisfactory to the Agents,
to the effect set forth in Section 5(f) hereof; provided, however, that to
the extent appropriate such letter may reconfirm matters set forth in a
prior letter delivered by Deloitte & Touche pursuant to Section 5(f) or
this Section 6(d); provided further, however, that any letter furnished
under this Section 6(d) shall relate to the Registration Statement and the
Prospectus as amended or supplemented at the time of deliver of such
letter, with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting
records of the Issuer.
(e) On each settlement date for the sale of Securities, the Issuer
shall, if requested by the Agent that solicited or received the offer to
purchase any Securities being delivered on such settlement date, furnish
such Agent with a written opinion or opinions, dated the date of delivery
thereof, of counsel for the Issuer, in form satisfactory to such Agent, to
the effect set forth in clauses (i), (ii) and (iii) of Section 5(d) hereof;
provided, however, that any opinion furnished under this Section 6(e) shall
relate to the Prospectus as amended or supplemented at such settlement date
and shall state that the Securities being sold by the Issuer on such
settlement date, when delivered against payment therefor as contemplated by
this Agreement, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Issuer enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization, or
other laws of general applicability relating to or affecting creditor's
rights and to general equitable principles, and will conform to the
description thereof contained in the Prospectus as amended or supplemented
at such settlement date.
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<PAGE>
(f) The Issuer agrees that any obligation of a person who has agreed
to purchase Securities to make payment for and take delivery of such
Securities shall be subject to (i) the accuracy, on the related settlement
date fixed pursuant to the Procedures, of the Issuer's representation and
warranty deemed to be made to the Agents pursuant to the last sentence of
subsection (a) of this Section 6, and (ii) the satisfaction, on such
settlement date, of each of the conditions set forth in Sections 5(a), (b)
and (c), it being understood that under no circumstance shall any Agent
have any duty or obligation to exercise the judgment permitted under
Section 5(b) or (c) on behalf of any such person.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuer will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise out
of or are based upon 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, and will reimburse each Agent for any
legal or other expenses reasonably incurred by such Agent in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Issuer
shall not be liable to such Agent in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any of such documents in reliance upon and in conformity with written
information furnished to the Issuer by such Agent specifically for use
therein, unless such loss, claim, damage or liability arises out of the
offer or sale of Securities occurring after such Agent has notified the
Issuer in writing that such information should no longer be used therein.
(b) Each Agent will indemnify and hold harmless the Issuer against
any losses, claims, damages or liabilities to which the Issuer may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was
21
<PAGE>
made in reliance upon and in conformity with written information furnished
to the Issuer by such Agent specifically for use therein, and will
reimburse the Issuer for any legal or other expenses reasonably incurred by
the Issuer in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, unless
such loss, claim, damage or liability arises out of the offer or sale of
Securities occurring after the Agent has notified the Issuer in writing
that such information should no longer be used therein.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability that
it may have to any indemnified party otherwise than under such subsection.
In case any such action shall be brought against any indemnified party, and
it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuer on the one hand and any Agent on the other
from the offering pursuant to this Agreement of the Securities which are
the subject of the action or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Issuer on the one hand and any
Agent on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Issuer on the one hand and any Agent on the other shall be deemed to be
in the same proportions as the total net proceeds from the offering
pursuant to this Agreement of the Securities which are the subject of the
action (before deducting expenses) received by the Issuer
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<PAGE>
bear to the total discounts and commissions received by such Agent from the
offering of such Securities pursuant to this Agreement. The 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 the
Issuer or such Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Issuer and each Agent agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined
by pro rata allocation (even if the Agents were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Agent shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities which are the subject of the
action and which were distributed to the public through it pursuant to this
Agreement or upon resale of Securities purchased by it from the Issuer
exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of each Agent in this
subsection (d) to contribute are several, in the same proportion which the
amount of the Securities which are the subject of the action and which were
distributed to the public through such Agent pursuant to this Agreement
bears to the total amount of such Securities distributed to the public
through all of the Agents pursuant to this Agreement, and not joint.
(e) The obligations of the Issuer under this Section 7 shall be in
addition to any liability which the Issuer may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls each Agent within the meaning of the Act; and the obligations of
each Agent under this Section 7 shall be in addition to any liability which
each Agent may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Issuer (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Issuer), to each officer of the Issuer who has signed the
Registration Statement and to each person, if any, who controls the Issuer
within the meaning of the Act.
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<PAGE>
8. STATUS OF EACH AGENT. In soliciting offers to purchase the
Securities from the Issuer pursuant to this Agreement and in assuming its other
obligations hereunder (other than offers to purchase pursuant to Section 11),
each Agent is acting individually and not jointly and is acting solely as agent
for the Issuer and not as principal. Each Agent will use its reasonable best
efforts to assist the Issuer in obtaining performance by each purchaser whose
offer to purchase Securities from the Issuer has been solicited by such Agent
and accepted by the Issuer, but such Agent shall have no liability to the Issuer
in the event any such purchase is not consummated for any reason. If the Issuer
shall default on its obligations to deliver Securities to a purchaser whose
offer it has accepted, the Issuer (i) shall hold the Agents harmless against any
loss, claim or damage arising from or as a result of such default by the Issuer,
and (ii) in particular, shall pay to the Agents any commission to which they
would be entitled in connection with such sale.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of the Issuer or its officers and of the Agents set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Agent, the Issuer or any of their respective representatives, officers or
directors or any controlling person and will survive delivery of and payment for
the Securities. If this Agreement is terminated pursuant to Section 10 or for
any other reason, the Issuer shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 4(h) and the obligations of the
Issuer under Sections 4(d) and 4(g) and the respective obligations of the Issuer
and the Agents pursuant to Section 7 shall remain in effect. In addition, if
any such termination shall occur either (i) at a time when any Agent shall own
any of the Securities acquired pursuant to Section 11 hereof and shall have
informed the Issuer of its intention of reselling them or (ii) after the Issuer
has accepted an offer to purchase Securities and prior to the related
settlement, the obligations of the Issuer under the last sentence of Section
4(b), under Sections 4(a), 4(c), 4(e) and 4(f) and, in the case of a termination
occurring as described in (ii) above, under Sections 3(c), 6(a), 6(e) and 6(f)
and under the last sentence of Section 8, shall also remain in effect.
10. TERMINATION. This Agreement may be terminated for any reason at
any time by the Issuer as to any Agent or by such Agent insofar as this
Agreement relates to such Agent, upon the giving of one day's written notice of
such termination to the other parties hereto. Any settlement with respect to
Securities placed by an Agent occurring after termination of this Agreement
shall be made in accordance with the Procedures and each Agent agrees, if
requested by the Issuer, to take the steps therein provided to be taken by such
Agent in connection with such settlement.
11. PURCHASES AS PRINCIPAL. From time to time, any Agent may agree
with the Issuer to purchase Securities from the Issuer as principal and (unless
the Issuer and such Agent may otherwise agree) such purchase shall be made in
accordance with the terms of a separate agreement (a "Purchase Agreement") in
the form attached hereto as Exhibit C (or any such other form as may be agreed
to between the Issuer and such Agent) with such additional
24
<PAGE>
provisions relating to the terms of the Securities and of the purchase and sale
(and, if applicable, resale) thereof as shall be set forth in the Purchase
Information delivered pursuant to the Procedures, and such Agent's compensation
shall, unless otherwise agreed between the Issuer and such Agent, be the amount
thereof set forth in the Pricing Supplement. For the purposes of Section 12 of
this Agreement the term "Purchaser" shall refer to each of you acting solely as
principal hereunder and not as agent.
12. CONDITIONS TO THE OBLIGATIONS OF A PURCHASER. The obligations of
a Purchaser to purchase Securities pursuant to any Purchase Agreement will be
subject to the accuracy of the representations and warranties on the part of the
Issuer herein as of the date of the respective Purchase Agreement and as of the
settlement date for the sale of such Securities, to the performance and
observance by the Issuer of all covenants and agreements herein and therein
contained on its part to be performed and observed and to the following
additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) Except to the extent modified by the respective Purchase
Agreement, the Purchaser shall have received, appropriately updated in
a manner consistent with Section 5 hereof, (i) a certificate of the
Issuer, dated as of the settlement date, to the effect set forth in
Section 5(e), (ii) the opinion or opinions of the general counsel of
the Issuer or other counsel to the Issuer, dated as of the settlement
date, to the effect set forth in Section 5(d),(iii) the opinion of
Mudge Rose Guthrie Alexander & Ferdon, counsel for the Purchaser,
dated as of the settlement date, to the effect set forth in Section
5(g) and (iv) letter of Deloitte & Touche, dated as of the settlement
date, to the effect set forth in Section 5(f).
(c) The conditions set forth in Section 5(c) shall have been
satisfied.
(d) Prior to the settlement date, the Issuer shall have furnished
to the Purchaser such further information, certificates and documents
as the Purchaser may reasonably request.
(e) Subsequent to the execution of any Purchase Agreement, there
shall not have been any decrease in the ratings of any of the Issuer's
debt securities by Moody's, S&P or D&P.
If any of the conditions specified in this Section 12 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in the
Purchase Agreement shall not be in all material respects reasonably satisfactory
in form and substance to the Purchaser and its counsel, the Purchase Agreement
and all obligations of the Purchaser thereunder may be canceled at, or at
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<PAGE>
any time prior to, the respective settlement date by the Purchaser. Notice of
such cancellation shall be given to the Issuer in writing or by telephone or
telegraph confirmed in writing.
13. NOTICES. Except as otherwise provided herein, all notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to _____________ shall be directed to it at
_____________________________, Attention: _________________; notices to
_______________________ shall be directed to it at _____________________,
Attention: ________________________; notices to ___________________ shall be
directed to it at __________________________, Attention: _____________________;
and notices to the Issuer shall be directed to it at ENSERCH Center, 300 South
St. Paul Street, Dallas, Texas 75201-5598, Attention: Treasurer; or in the case
of any party hereto, to such other address or person as such party shall specify
to each other party by a notice given in accordance with the provisions of this
Section 13. Any such notice shall take effect at the time of receipt.
14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors and assigns, the
officers and directors and controlling persons referred to in Section 7 and, to
the extent provided in Section 6(f), any person who has agreed to purchase
Securities from the Issuer, and no other person will have any right or
obligation hereunder.
15. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such executed counterparts shall together
constitute one and the same Agreement.
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<PAGE>
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
ENSERCH CORPORATION
By:___________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the
date first above written:
[____________________________]
By:_____________________________
Name:
Title:
[____________________________]
By:_____________________________
Name:
Title:
[____________________________]
By:_____________________________
Name:
Title:
27
<PAGE>
EXHIBIT A
The Issuer agrees to pay each Agent a commission equal to the
following percentage of the principal amount of Securities sold to purchasers
solicited by such Agent:
<TABLE>
<CAPTION>
Commission Rate
(as a percentage of
Term principal amount)
---- -------------------
<S> <C>
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .625
From 15 years to less than 20 years .700
From 20 years to 30 years .750
Greater than 30 years To be determined
at the time of sale
</TABLE>
<PAGE>
EXHIBIT B
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series A due nine months or more from their
issue date (the "Notes") are to be offered on a continuing basis by ENSERCH
Corporation (the "Issuer"). ________________________________________,
__________________________ and __________________________, as agents
(individually, an "Agent" and collectively, the "Agents"), have each agreed to
use reasonable best efforts to solicit offers to purchase the Notes. No Agent
will be obligated to purchase Notes for its own account. The Notes are being
sold pursuant to an Agency Agreement, dated ________________, 199__ (the "Agency
Agreement"), among the Issuer and the Agents, and will be issued pursuant to an
Indenture, dated as of February 15, 1992 (the "Indenture"), between the Issuer
and The First National Bank of Chicago, as trustee (the "Trustee"). The Notes
will rank equally and ratably with all other unsecured and unsubordinated
indebtedness of the Issuer and will have been registered with the Securities and
Exchange Commission (the "Commission"). For a description of the terms of the
Notes and the offering and sale thereof, see the sections entitled "Description
of Notes" and "Plan of Distribution of Notes" in the Prospectus Supplement
relating to the Notes, dated ____________, 199__ attached hereto and hereinafter
referred to as the "Prospectus Supplement", and the sections entitled
"Description of Debt Securities", "United States Taxation" and "Plan of
Distribution" in the Prospectus relating to the Notes, dated _____________,
199__ attached hereto and hereinafter referred to as the "Prospectus".
Unless otherwise specified in the applicable Pricing Supplement, the
Notes will be issued in book-entry form (each, a "Book-Entry Note") and will be
represented by one or more fully registered global certificates (each, a "Global
Note"). Beneficial owners of Book-Entry Notes will not be entitled to receive a
certificate representing such Notes.
Administrative procedures and specific terms of the offering are
explained below -- Part I indicating procedures applicable to all Notes, Part II
indicating specific procedures for Book-Entry Notes, and Part III indicating
specific procedures for Notes issued in certificated form. Administrative and
record keeping responsibilities will be handled for the Issuer by its Treasury
Department. The Issuer will advise the Agents in writing of those persons
handling administrative responsibilities with whom the Agents are to communicate
regarding offers to purchase Notes and the details of their delivery.
Unless otherwise defined herein, terms defined in the Indenture (or
any applicable Board Resolution referred to therein related to the Notes) shall
be used herein as therein defined.
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PART I: ADMINISTRATIVE PROCEDURES APPLICABLE TO ALL NOTES
- ----------------------------------------------------------
ISSUE DATE
Each Note will be dated the date of its authentication. Each Note
will also bear an original issue date (the "Issue Date") which, with respect to
any such Note (or portion thereof), shall mean the date of its original issuance
and shall be specified therein. The Issue Date will remain the same for all
Notes subsequently issued upon transfer, exchange or substitution of a Note,
regardless of their dates of authentication.
PRICE TO PUBLIC; DENOMINATIONS; REGISTRATION
Except as otherwise specified in a Pricing Supplement, each Note will
be issued at 100% of principal amount. The minimum denominations of the Notes
will be $100,000 and integral multiples of $1,000 in excess thereof. Notes will
be issued only in fully registered form.
MATURITIES; MINIMUM PURCHASE; CALCULATION OF INTEREST
Each Note will mature on a date, selected by the purchaser and agreed
to by the Issuer, which will be nine months or more from its Issue Date. The
minimum aggregate amount of Notes which may be offered to any purchaser will be
$100,000.
Interest on each interest-bearing Note will be calculated and paid in
the manner described in such Note and in the Prospectus Supplement and the
applicable Pricing Supplement. Unless otherwise set forth therein, interest on
Fixed Rate Notes (including interest for partial periods) will be calculated on
the basis of a 360-day year of twelve 30-day months and will not accrue on the
31st day of any month. Interest on Floating Rate Notes, except as otherwise set
forth therein, will be calculated on the basis of actual days elapsed and a year
of 360 days, except that in the case of a Floating Rate Note for which the Base
Rate is the Treasury Rate, interest will be calculated on the basis of the
actual number of days in the year.
REDEMPTION/REPAYMENT
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will be subject to redemption in whole or in part (subject to
applicable minimum denominations), at the option of the Issuer on and after an
initial redemption date as set forth in the applicable Pricing Supplement and in
the applicable Note. The redemption price will be set forth in the applicable
Pricing Supplement and in the applicable Note.
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will subject to repayment at the option of the holders
therefore in accordance with the terms of the Notes on a repayment date as set
forth in the applicable Pricing Supplement and in the
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<PAGE>
applicable Note. The repayment date or dates and repayment price will be set
forth in the applicable Pricing Supplement and in the applicable Note.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Issuer and the Agents will discuss from time to time the rates to
be borne by the Notes that may be sold as a result of the solicitation of offers
by the Agents. Once any Agent has recorded any indication of interest in Notes
upon certain terms, and communicated with the Issuer, if the Issuer plans to
accept an offer to purchase Notes upon such terms, it will prepare a Pricing
Supplement to the Prospectus, as then amended or supplemented, reflecting the
terms of such Notes and, after approval from the Agents, will arrange to have 10
copies of the Pricing Supplement filed with, or transmitted by a means
reasonably calculated to result in filing with, the Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended, no later than the fifth
Business Day following the earlier of the date of determination of the
settlement information described below or the date such Pricing Supplement is
first used. The Issuer will supply at least 10 copies of the Prospectus, as
then amended or supplemented, and bearing such Pricing Supplement, to the Agent
who presented the offer (the "Presenting Agent"). No settlements with respect
to Notes upon such terms may occur prior to such transmitting or filing and the
Agents will not, prior to such transmitting or filing, mail confirmations to
customers who have offered to purchase Notes upon such terms. After such
transmitting or filing, sales, mailing or confirmations and settlements may
occur with respect to Notes upon such terms, subject to the provisions of
"Delivery of Prospectus" below.
If the Issuer decides to post rates and a decision has been reached to
change interest rates, the Issuer will promptly notify each Agent. Each Agent
will forthwith suspend solicitation of purchases. At that time, the Agents will
recommend and the Issuer will establish rates to be so "posted". Following
establishment of posted rates and prior to the transmitting or filing described
in the preceding paragraph, the Agents may only record indications of interest
in purchasing Notes at the posted rates. Once any Agent has recorded any
indication of interest in Notes at the posted rates and communicated with the
Issuer, if the Issuer plans to accept an offer at the posted rate, it will
prepare a Pricing Supplement reflecting such posted rates and, after approval
from the Agents, will arrange to have 10 copies of the Pricing Supplement filed
with, or transmitted by means reasonably calculated to result in filing with,
the Commission and will supply at least 10 copies of the Prospectus, as then
amended or supplemented, and bearing such Pricing Supplement, to the Presenting
Agent at the address listed on Annex A attached hereto. No settlements at the
posted rates may occur prior to such transmitting or filing and the Agents will
not, prior to such transmitting or filing, mail confirmations to customers who
have offered to purchase Notes at the posted rates. After such transmitting or
filing, sales, mailing of confirmations and settlements may resume, subject to
the provisions of "Delivery of Prospectus" below.
Outdated Pricing Supplements, and copies of the Prospectus to which
they are attached (other than those retained for files), will be destroyed.
B-3
<PAGE>
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
As provided in the Agency Agreement, the Issuer may instruct the
Agents to suspend solicitation of offers to purchase at any time. As soon as
reasonably practicable, but in no event later than one Business Day after notice
from the Issuer, the Agents will each forthwith suspend solicitation until such
time as the Issuer has advised them that solicitation of offers to purchase may
be resumed.
If the Agents receive the notice from the Issuer contemplated by
Section 3(b) or 4(b) of the Agency Agreement, they will promptly suspend
solicitation and will only resume solicitation as provided in the Agency
Agreement. If the Issuer is required, pursuant to the second sentence of
Section 4(b) of the Agency Agreement, to prepare an amendment or supplement, it
will promptly furnish each Agent with the proposed amendment or supplement; if
the Issuer decides to amend or supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly advise each Agent and will
furnish each Agent with the proposed amendment or supplement in accordance with
the terms of the Agency Agreement. The Issuer will file such amendment or
supplement with the Commission, provide the Agents with copies of any such
amendment or supplement, confirm to the Agents that such amendment or supplement
has been filed with the Commission and advise the Agents that solicitation may
be resumed.
Any such suspension shall not affect the Issuer's obligations under
the Agency Agreement; and in the event that at the time the Issuer suspends
solicitation of offers to purchase there shall be any offers already accepted by
the Issuer outstanding for settlement, the Issuer will have the sole
responsibility for fulfilling such obligations. The Issuer will in addition
promptly advise the Agents and the Trustee if such offers are not to be settled
and if copies of the Prospectus as in effect at the time of the suspension may
not be delivered in connection with the settlement of such offers.
ACCEPTANCE OF OFFERS
Each Agent will promptly advise the Issuer, at its option orally or in
writing, of each reasonable offer to purchase Notes received by it, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, without notice to the Issuer, reject any offer received by it, in
whole or in part. The Issuer will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. Prior to
accepting any offer the Issuer will have the specific terms of the Notes
approved by the Finance Committee of the Board of Directors. If the Issuer
accepts or rejects an offer, in whole or in part, the Issuer will promptly
notify the Presenting Agent.
CONFIRMATION
For each accepted offer, the Presenting Agent will issue a
confirmation to the purchaser, with a separate confirmation to the Issuer's
Treasury Department, setting forth the Purchase Information (as defined under
"Details for Settlement" in Part II for Book-Entry Notes and in Part III for
certificated Notes) and delivery and payment instructions; provided, however,
B-4
<PAGE>
that, in the case of the confirmation issued to the purchaser, no confirmation
shall be delivered to the purchaser prior to the delivery of the Prospectus
referred to below.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof (except as provided below) must be delivered to a
purchaser prior to or simultaneously with the earlier of delivery of (i) the
written confirmation provided for above, and (ii) any Note purchased by such
purchaser. (For this purpose, entry of a Same Day Funds Settlement System
("SDFS") delivery order through The Depository Trust Company's ("DTC")
Participant Terminal System to credit a Book-Entry Note to the account of a
Participant purchasing, or acting for the purchaser of a Book-Entry Note, shall
be deemed to constitute delivery of such Book-Entry Note). Subject to the
foregoing, it is anticipated that delivery of the Prospectus, confirmation and
Notes to the purchaser will be made simultaneously at settlement. The Issuer
shall ensure that the Presenting Agent receives copies of the Prospectus and
each amendment or supplement thereto (including appropriate Pricing Supplements)
in such quantities and within such time limits as will enable the Presenting
Agent to deliver such confirmation or Note to a purchaser as contemplated by
these procedures and in compliance with the first sentence of this paragraph.
If, since the date of acceptance of a purchaser's offer, the Prospectus shall
have been supplemented solely to reflect any sale of Notes on terms different
from those agreed to between the Issuer and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus.
AUTHENTICITY OF SIGNATURES
The Issuer will cause the Trustee to furnish the Agents from time to
time with the specimen signatures of each of the Trustee's officers, employees
or agents who have been authorized by the Trustee to authenticate Notes, but no
Agent will have any obligation or liability to the Issuer or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent
of the Issuer or the Trustee on any Note or Global Note.
ADVERTISING EXPENSES
The Issuer will determine with the Agents the amount of advertising
that may be appropriate in offering the Notes. Advertising expenses will be
paid by the Issuer.
B-5
<PAGE>
BUSINESS DAY
"Business Day" means any day which is not a Saturday or Sunday and is
not a day on which banking institutions are generally authorized or obligated by
law or executive order to close in The City of New York and, with respect to
LIBOR notes, any day on which dealings in deposits in U.S. Dollars are
transacted in the London interbank market.
TRUSTEE NOT TO RISK FUNDS
Nothing herein shall be deemed to require the Trustee to risk or
expend its own funds in connection with any payment made to the Issuer, the
Agents, DTC, or to the holder of any Note, it being understood by all parties
that payments made by the Trustee to the Issuer, the Agents, DTC, or to the
holder of any Note shall be made only to the extent that funds are provided to
the Trustee for such purpose.
PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
- --------------------------------------------------------
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations (the "Letter")
from the Issuer and the Trustee to DTC dated as of ______________, 199__ and a
Medium-Term Note Certificate Agreement (the "MTN Certificate Agreement") between
the Trustee and DTC dated as of _________ __, ____ and its obligations as a
participant in DTC, including DTC's SDFS.
ISSUANCE
All Book-Entry Notes having the same Issue Date, interest rate, Stated
Maturity and other terms will be represented initially by a single Global Note
in fully registered form without coupons. Each Global Note will be dated and
issued as of the date of its authentication by the Trustee. Each Global Note
will also bear an Issue Date, which will be (i) with respect to an original
Global Note (or any portion thereof), its Issue Date, and (ii) following a
consolidation of Global Notes, the most recent Interest Payment Date to which
interest has been paid or duly provided for on the predecessor Global Notes,
regardless of the date of authentication of such subsequently issued Global
Note. No Global Note will represent any Note in certificated form.
IDENTIFICATION NUMBERS
The Issuer has arranged with the CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a series
of CUSIP numbers (including tranche numbers), such series consisting of
approximately 900 CUSIP numbers and relating to Global Notes representing Book-
Entry Notes. The Issuer has obtained from the CUSIP Service Bureau a written
list of such reserved CUSIP numbers and has delivered such
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list to the Trustee and DTC. The Trustee will assign CUSIP numbers serially to
Global Notes as described below under Settlement Procedure "C". DTC will notify
the CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has
assigned to Global Notes. The Trustee will notify the Issuer at any time when
fewer than 100 of the reserved CUSIP numbers remain unassigned to Global Notes;
and the Issuer will reserve 900 additional CUSIP numbers for assignment to
Global Notes representing Book-Entry Notes. Upon obtaining such additional
CUSIP numbers, the Issuer shall deliver a list of such additional CUSIP numbers
to the Trustee and DTC.
REGISTRATION
Each Global Note will be registered in the name of Cede & Co., as
nominee for DTC, on the Debt Security Register maintained under the Indenture.
The beneficial owner of a Book-Entry Note (or one or more indirect participants
in DTC designated by such owner) will designate one or more participants in DTC
(the "Participants") to act as agent or agents for such owner with respect to
such Book-Entry Note in connection with the book-entry system maintained by DTC,
and DTC will record in book-entry form, in accordance with instructions provided
by such Participants, a credit balance with respect to such Book-Entry Note in
the account of such Participants. The ownership interest of such beneficial
owner in such Book-Entry Note will be recorded through the records of such
Participants or through the separate records of such Participants and one or
more indirect participants in DTC. So long as Cede & Co. is the registered
owner of a Global Note, DTC will be considered the sole owner and holder of the
Book-Entry Notes represented by such Global Note for all purposes under the
Indenture.
TRANSFERS
Transfers of beneficial interest in a Book-Entry Note will be
accomplished by book entries made by DTC and, in turn, by Participants (and, in
certain cases, one or more indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
EXCHANGES
The Trustee may upon notice to the Issuer deliver to DTC and the CUSIP
Service Bureau at any time a written notice of consolidation (a copy of which
shall be attached to the Global Note resulting from such consolidation)
specifying (i) the CUSIP numbers of two or more outstanding Global Notes that
represent Book-Entry Notes having the same interest rate, Stated Maturity and
other terms, and for which interest (if any) has been paid to the same date,
(ii) a date, occurring at least thirty days after such written notice is
delivered and at least thirty days before the next Interest Payment Date (if
any) for such Notes, on which such Global Notes shall be exchanged for a single
replacement Global Note, and (iii) a new CUSIP number to be assigned to such
replacement Global Note. Upon receipt of such a notice, DTC will send to its
Participants (including the Trustee) a written reorganization notice to the
effect that such
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exchange will occur on such date. Prior to the specified exchange date, the
Trustee will deliver to the CUSIP Service Bureau a written notice setting forth
such exchange date and the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global Notes to be exchanged will no
longer be valid. On the specified exchange date, the Trustee will exchange such
Global Notes for a single Global Note bearing the new CUSIP number and a new
Original Issue Date, which shall be the most recent Interest Payment Date to
which interest has been paid or duly provided for on the predecessor Global
Notes, and the CUSIP numbers of the exchanged Global Notes will, in accordance
with CUSIP Service Bureau procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the Global Notes to be exchanged
exceed $150,000,000 in aggregate principal amount, one Global Note will be
authenticated and issued to represent each $150,000,000 of principal amount of
the exchanged Global Notes and an additional Global Note will be authenticated
and issued to represent any remaining principal amount of such Global Notes (see
"Denominations" below).
REDEMPTION
The Trustee will comply with the terms of the Letter with regard to
redemptions of the Book-Entry Notes. In the case of Book-Entry Notes stated by
their terms to be redeemable prior to Stated Maturity, at least 60 calendar days
before the date fixed for redemption (the "Redemption Date"), the Issuer shall
notify the Trustee of the Issuer's election to redeem such Book-Entry Notes in
whole or in part and the principal amount of such Book-Entry Notes to be so
redeemed. At least 30 calendar days but not more than 60 days prior to the
Redemption Date, the Trustee shall notify DTC of the Issuer's election to redeem
such Book-Entry Notes. The Trustee shall notify the Issuer and DTC of the CUSIP
numbers of the particular Book-Entry Notes to be redeemed either in whole or in
part. The Issuer, the Trustee and DTC will confirm the amounts of such
principal and any premium and interest payable with respect to each such Book-
Entry Note on or about the fifth Business Day preceding the Redemption Date of
such Book-Entry Note. The Issuer will pay the Trustee, in accordance with the
terms of the Indenture, the amount necessary to redeem each such Book-Entry Note
or the applicable portion of each such Book-Entry Note. The Trustee will pay
such amount to DTC at the times and in the manner set forth herein. Promptly
after payment to DTC of the amount due on the Redemption Date for such Book-
Entry Note, the Trustee shall cancel any such Global Note redeemed in whole and
shall delivery it to the Issuer with an appropriate debit advice. If a Global
Note is to be redeemed in part, the Trustee will cancel such Global Note and
issue a Global Note which shall represent the remaining portion of such Global
Note and shall bear the CUSIP number of the cancelled Global Note.
DENOMINATIONS
Book-Entry Notes will be issued in principal amounts of $100,000 or
any amount in excess thereof that is an integral multiple of $1,000. Global
Notes will be denominated in principal amounts not in excess of $150,000,000.
If one or more Book-Entry Notes having an aggregate principal amount in excess
of $150,000,000 would, but for the preceding sentence, be represented by a
single Global Note, then one Global Note will be issued to represent
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$150,000,000 principal amount of such Book-Entry Note or Notes and an additional
Global Note will be issued to represent any remaining principal amount of such
Book-Entry Note or Notes. In such a case, each of the Global Notes representing
such Book-Entry Note or Notes shall be assigned the same CUSIP number.
INTEREST
Standard & Poor's Corporation will use the information received in the
pending deposit message described under Settlement Procedure "C" to include the
amount of any interest payable and certain other information regarding the
related Global Note in the appropriate daily or weekly bond report published by
Standard & Poor's Corporation.
PAYMENTS OF PRINCIPAL AND INTEREST
(a) Payments of Interest Only. Promptly after each Record Date, the
Trustee will deliver to the Issuer and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each Global Note on the following
Interest Payment Date (other than an Interest Payment Date coinciding with
Maturity) and the total of such amounts. DTC will confirm the amount payable on
each Global Note on such Interest Payment Date by reference to the daily or
weekly bond reports published by Standard & Poor's Corporation. The Issuer will
pay to the Trustee the total amount of interest due on such Interest Payment
Date (other than at Maturity), and the Trustee will pay such amount to DTC at
the times and in the manner set forth below under "Manner of Payment". If any
Interest Payment Date for a Book-Entry Note is not a Business Day, the payment
due on such day shall be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period from and after such
Interest Payment Date.
(b) Payments at Maturity. On or about the first Business Day of each
month, the Trustee will deliver to the Issuer and DTC a written list of
principal and interest to be paid on each Global Note maturing in the following
month. The Issuer, the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each such Global Note on or
about the fifth Business Day preceding the Maturity of such Global Note. The
Issuer will pay to the Trustee, as the paying agent, the principal amount of
such Global Note, together with interest due at such Maturity. Upon surrender
of a Global Note, the Trustee will pay such amounts to DTC at the times and in
the manner set forth below under "Manner of Payment". If any Maturity of a
Global Note representing Book-Entry Notes is not a Business Day, the payment due
on such day shall be made on the next succeeding Business Day and no interest
shall accrue on such payment for the period from and after such Maturity.
Promptly after payment to DTC of the principal and interest and premium due at
the Maturity of such Global Note, the Trustee will cancel and destroy such
Global Note or return such Global Notes to the Issuer in accordance with the
Indenture.
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(c) Manner of Payment. The total amount of any principal and interest
due on Global Notes on any Interest Payment Date or at Maturity shall be paid by
the Issuer to the Trustee in funds available for use by the Trustee as of 9:30
a.m., New York City time, on such date. The Issuer will make such payment on
such Global Notes by wire transfer to the Trustee. The Issuer will confirm
instructions regarding payment in writing to the Trustee. Prior to 10:00 a.m.,
New York City time, on each maturity date or as soon as possible thereafter,
following receipt of such funds from the Issuer, the Trustee will pay by wire
transfer (using Fedwire message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for immediate use by DTC, each
payment of principal (together with interest thereon) due on Global Notes on any
maturity date. On each Interest Payment Date, interest payment shall be made to
DTC in same day funds accordance with existing arrangements between the Trustee
and DTC. Thereafter, on each such date, DTC will pay, in accordance with its
SDFS operating procedures then in effect, such amounts in funds available for
immediate use to the respective Participants in whose names the Book-Entry Notes
represented by such Global Notes are recorded in the book-entry system
maintained by DTC. NEITHER THE ISSUER NOR THE TRUSTEE SHALL HAVE ANY DIRECT
RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH PARTICIPANTS OF THE
PRINCIPAL OF AND INTEREST ON THE BOOK-ENTRY NOTES.
(d) Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments and materials directly to
the beneficial owner of such Note.
SETTLEMENT
The receipt by the Issuer of immediately available funds in payment
for a Book-Entry Note, the authentication and issuance of the Global Note or
Global Notes representing such Note and entry by the Presenting Agent of an SDFS
deliver order through DTC's Participant Terminal System to credit such Note to
the account of a Participant purchasing, or acting for the purchase of, such
Note, shall constitute "settlement" with respect to such Note. All orders
accepted by the Issuer will be settled from one to five Business Days from the
date of the sale pursuant to the timetable for settlement set forth below unless
the Issuer and the purchaser agree to settlement on a later date.
DETAILS FOR SETTLEMENT
For each offer accepted by the Issuer, the Presenting Agent will
communicate to the Issuer's Treasury Department by telephone, telex, facsimile
machine or other acceptable means, the following information (the "Purchase
Information"):
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1. Principal amount of each Note (in authorized denominations) to be
purchased.
2. Issue price, interest rate if fixed or Initial Interest Rate and
interest rate basis if floating, Spread or Spread Multiplier,
maximum or minimum interest rates, interest calculation dates,
Index Maturity, Interest Determination Date, Interest Reset Date,
interest rate reset period, interest payment period, Record Dates
and Interest Payment Dates (as such capitalized terms are defined
in either the Indenture or the Prospectus Supplement), in each
case, to the extent applicable.
3. Any index to determine the amounts of payments of principal and
any premium and interest.
4. Maturity of each Note.
5. Redemption, repayment or sinking fund provisions, if any, of each
Note.
6. If an Original Issue Discount Note, the Yield to Maturity and the
initial accrual period of original issue discount.
7. Issue Date of each Note.
8. Settlement date for each Note.
9. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Issuer upon
settlement).
The Issue Date of, and the settlement date for, Notes will be the
same. Before accepting any offer to purchase Book-Entry Notes to be settled in
less than three Business Days, the Issuer will verify that the Trustee will have
adequate time to prepare and authenticate the Global Notes.
SETTLEMENT PROCEDURES
Settlement Procedures with regard to each Book-Entry Note sold by the
Issuer through an Agent shall be as follows:
A. The Presenting Agent will advise the Issuer by telephone of the Purchase
Information with respect to each Book-Entry Note which will be represented
by the Global Note which is to be issued.
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B. The Issuer will advise the Trustee by telex, facsimile transmission or by
another mutually acceptable method of the information set forth in
Settlement Procedure "A" above and the name of the Presenting Agent.
C. The Trustee will assign a CUSIP number to the Global Note representing such
Book-Entry Note and advise the Issuer by telephone of such CUSIP number.
The Trustee will enter a pending deposit message through DTC's Participant
Terminal System, providing the following settlement information to DTC
(which shall route such information to Standard & Poor's Corporation and
Interactive Data Corporation) and the Presenting Agent.
1. The applicable information set forth in Settlement Procedure "A".
2. Initial Interest Payment Date for such Book-Entry Note, number of days
by which such date succeeds the Record Date and the amount of interest
payable on such Interest Payment Date per $1,000 principal amount of
Book-Entry Notes.
3. CUSIP number of the Global Note representing such Book-Entry Note.
4. Whether such Global Note will represent any other Book-Entry Note (to
the extent known at such time).
5. Interest payment periods.
6. Numbers of the participant accounts maintained by DTC on behalf of the
Trustee and the Presenting Agent.
D. To the extent it has not already done so, the Issuer will deliver to the
Trustee a Global Note representing such Book-Entry Note.
E. The Trustee will complete and authenticate the Global Note representing
such Book-Entry Note.
F. DTC will credit such Book-Entry Note to the Trustee's participant account
at DTC.
G. The Trustee will enter an SDFS deliver order through DTC's Participant
Terminal System, with respect to each Book-Entry Note represented by the
Global Note to be issued, instructing DTC to (i) debit such Book-Entry Note
to the Trustee's participant account and credit such Book-Entry Note to the
Presenting Agent's participant account and (ii) debit the Presenting
Agent's settlement account and credit the Trustee's settlement account for
an amount equal to the price of such Book-Entry Note less such Agent's
commission. The entry of such a deliver order shall constitute a
representation and warranty by the Trustee to DTC that (i) the Global Note
representing such
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Book-Entry Note has been delivered and authenticated and (ii) the Trustee
is holding such Global Note pursuant to the MTN Certificate Agreement.
H. The Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System, with respect to each Book-Entry Note
represented by the Global Note to be issued, instructing DTC (i) to debit
such Book-Entry Note to the Presenting Agent's participant account and
credit such Book-Entry Note to the participant accounts of the Participant
with respect to such Book-Entry Note and (ii) to debit the settlement
accounts of such Participant and credit the settlement account of the
Presenting Agent for an amount equal to the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "G" and "H" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
J. The Trustee, upon confirming receipt of such funds, will credit the amount
transferred to the Trustee in accordance with Settlement Procedure "G", in
funds available for immediate use, to a bank account of the Issuer at the
Trustee.
K. The Presenting Agent will confirm the purchase of each Book-Entry Note to
the purchaser either by transmitting to the Participant with respect to
such Book-Entry Note a confirmation order or orders through DTC's
institutional delivery system or by mailing a written confirmation to such
purchaser.
SETTLEMENT PROCEDURES TIMETABLE
For orders of Book-Entry Notes solicited by an Agent, and accepted by
the Issuer for settlement on the first Business Day after the sale date,
Settlement Procedures "A" through "K" set forth above shall be completed as soon
as possible but not later than the respective times (New York City time) set
forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
---------- ----
<S> <C> <C>
A-B 11:00 a.m. on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the Business Day
before settlement date
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:45 p.m. on settlement date
J-K 5:00 p.m. on settlement date
</TABLE>
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If a sale is to be settled more than one Business Day after the sale
date, Settlement Procedures "A", "B" and "C" shall be completed as soon as
practicable but not later than the times specified above on the first Business
Day after the sale date. In connection with a sale which is to be settled more
than one Business Day after the sale date, if the initial interest rate for a
Floating Rate Note is not known at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be completed as soon as such
rates have been determined, but no later than 11:00 a.m. and 2:00 p.m.,
respectively, on the second Business Day before the settlement date. Settlement
Procedures "I" and "J" are subject to extension in accordance with any extension
of Fedwire closing deadlines and in the other events specified in the SDFS
operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or cancelled, the
Issuer shall notify the Trustee, and upon receipt of such notice, the Trustee
will deliver to DTC, through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled settlement date.
FAILURE TO SETTLE
If the Trustee has not entered an SDFS deliver order with respect to a
Book-Entry Note pursuant to Settlement Procedure "G", then upon written request
(which may be evidenced by telecopy transmission) of the Issuer, the Trustee
shall deliver to DTC, through DTC's Participation Terminal System, as soon as
practicable, but no later than 2:00 p.m. on any Business Day, a withdrawal
message instructing DTC to debit such Book-Entry Note to the Trustee's
participant account. DTC will process the withdrawal message, provided that the
Trustee's participant account contains a principal amount of the Global Note
representing such Book-Entry Note that is at least equal to the principal amount
to be debited. If withdrawal messages are processed with respect to all the
Book-Entry Notes represented by a Global Note, the Trustee will mark such Global
Note "cancelled", make appropriate entries in the Trustee's records and so
advise the Issuer. The CUSIP number assigned to such Global Note shall, in
accordance with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. If withdrawal messages are processed with respect to
one or more, but not all, of the Book-Entry Notes represented by a Global Note,
the Trustee will exchange such Global Note for two Global Notes, one of which
shall represent such Book-Entry Note or Book-Entry Notes and shall be cancelled
immediately after issuance and the other of which shall represent the remaining
Book-Entry Notes previously represented by the surrendered Global Note and shall
bear the CUSIP number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to
the Participants with respect to such Book-Entry Note by the beneficial
purchaser thereof (or a person, including an indirect participant in DTC, acting
on behalf of such purchaser), such Participant and, in turn the Presenting Agent
for such Book-Entry Note may enter an SDFS deliver order through DTC's
Participant Terminal System debiting such Book-Entry Note to such
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Agent's participant account and crediting such Book-Entry Note free to the
participant account of the Trustee and shall notify the Trustee and the Issuer
thereof. Thereafter, the Trustee, (i) will immediately notify the Issuer, once
the Trustee has confirmed that such Book-Entry Note has been credited to its
participant account, and the Issuer shall immediately transfer by Fedwire (in
immediately available funds) to the Presenting Agent an amount equal to the
price of such Book-Entry Note which was previously sent by wire transfer to the
account of the Issuer maintained at the Trustee in accordance with Settlement
Procedure "J", and (ii) the Trustee will deliver the withdrawal message and take
the related actions described in the preceding paragraph. The Presenting Agent
will not be entitled to any commission with respect any Book-Entry Note which
the purchaser does not accept and make payment for. Such debits and credits
will be made on the settlement date, if possible, and in any event not later
than 5:00 p.m. on the following Business Day. If such failure shall have
occurred for any reason other than failure by the Presenting Agent to perform
its obligations hereunder or under the Agency Agreement, the Issuer will
reimburse the Presenting Agent on an equitable basis for its loss of the use of
funds during the period when the funds were credited to the account of the
Issuer.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Note, DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Note, the Trustee will provide, in accordance with
Settlement procedures "D" and "E", for the authentication and issuance of a
Global Note representing the other Book-Entry Notes to have been represented by
such Global Note and will make appropriate entries in its records.
PART III: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
- -----------------------------------------------------------
INTEREST PAYMENTS
On the fifth Business Day immediately preceding each Interest Payment
Date, the Trustee will furnish the Issuer with the total amount of the interest
payments to be paid on such Interest Payment Date. The Trustee will provide
monthly to the Issuer's Treasury Department a list of the principal and interest
to be paid on Notes maturing in the next succeeding month. The Trustee will
assume responsibility for withholding taxes on interest paid as required by law
to the extent holders have not produced a taxpayer identification number (TIN).
PAYMENT AT MATURITY
Upon presentation of each Note at Maturity, the Trustee (or a duly
authorized Paying Agent) will pay the principal amount thereof, together with
any premium and accrued interest due at maturity. Such payment will be made in
immediately available funds, provided that the Note is presented in time for the
Trustee (or any such Paying Agent) to make payment in such funds in accordance
with its normal procedures. The Issuer will provide the Trustee (and any such
Paying Agent) with funds available for immediate use for such purpose. Notes
presented at Maturity will be cancelled by the Trustee as provided in the
Indenture.
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DETERMINATION OF SETTLEMENT DATE
The receipt of immediately available funds by the Issuer from the
Presenting Agent in payment for a Note and the authentication and issuance of
such Note shall, with respect to such Note, constitute "settlement". All offers
accepted by the Issuer will be settled on the fifth Business Day next succeeding
the date of receipt unless otherwise agreed by any purchaser, the Issuer and the
Trustee. The settlement date shall be specified upon receipt of an offer.
Prior to 3:00 p.m., New York City time, on the Business Day prior to the
settlement date, the Issuer will instruct the Trustee to authenticate and
deliver the Notes no later than 2:15 p.m., New York City time, on the settlement
day.
DETAILS FOR SETTLEMENT
For each offer accepted by the Issuer, the Presenting Agent will
communicate to the Issuer's Treasury Department by telephone, telex, facsimile
machine or other acceptable means, the Purchase Information prior to 3:00 p.m.,
New York City time, on the Business Day prior to the applicable settlement date.
For certificated Notes "Purchase Information" shall refer to the terms of the
Notes described under "Details of Settlement" in Part II and the following
additional information:
1. Exact name in which the Note or Notes are to be registered (the
"registered owner").
2. Exact address of the registered owner and, if different, the
address for delivery, notices and payment of principal and
premium and interest.
3. Taxpayer Identification Number (TIN) of the registered owner.
4. Delivery address for each Note.
The Issue Date of, and the settlement date for, Notes will be the
same. Before accepting any offer to purchase Notes to be settled in less than
three Business Days, the Issuer will verify that the Trustee will have adequate
time to prepare and authenticate the Notes.
Immediately after receiving the details for each offer from the
Presenting Agent (but in no event later than 3:00 p.m. on the Business Day prior
to the settlement date for such Notes), the Issuer will, after recording the
details and any necessary calculations, communicate the Purchase Information by
telex, facsimile transmission or other acceptable means, to the Trustee. The
Trustee will assign to and enter on each Note a transaction number.
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SETTLEMENT; NOTE DELIVERIES AND CASH PAYMENT
The Issuer will deliver to the Trustee at the commencement of the
program and from time to time thereafter a supply of duly executed Notes
adequate to implement the program. Upon the receipt of appropriate
documentation and instructions from the Issuer the Trustee will cause the Notes
to be completed and authenticated and hold the Notes for delivery against
confirmation from the Issuer of receipt of payment.
The Trustee will deliver the Notes in accordance with instructions
from the Issuer, to the Presenting Agent, as the Issuer's agent, for the benefit
of the purchaser against receipt therefor by stamping the delivery receipt with
the date and time received and returned. If the Presenting Agent in any instance
advances its own funds, the Issuer shall not use any of the proceeds of such
sale to acquire securities.
The Presenting Agent, as the Issuer's agent, will deliver the Notes
(with the written confirmation provided for in Part I above) to the purchaser
thereof against payment therefor by such purchaser. Delivery of any
confirmation or Note will be made in compliance with "Delivery of Prospectus" in
Part I.
FAILS
In the event that a purchaser shall fail to accept delivery of and
make payment for a Note on the settlement date, the Presenting Agent will notify
the Trustee and the Issuer by telephone, confirmed in writing. If such Note has
been delivered to the Presenting Agent, as the Issuer's agent, the Presenting
Agent shall return such Note to the Trustee. If funds have been advanced by the
Presenting Agent for the purchase of such Note, the Issuer will, immediately
upon receipt of confirmation from the Trustee of receipt of such Note, debit its
account for the amount so advanced and shall refund the payment previously made
by the Presenting Agent in immediately available funds. Such payments will be
made on the settlement date for such Note, if possible, and in any event not
later than the Business Day following such settlement date. If any failure
described in this paragraph shall have occurred for any reason other than the
failure of the Presenting Agent to provide the Purchase Information to the
Issuer or to provide a confirmation to the purchaser, the Issuer will reimburse
the Presenting Agent on an equitable basis for its loss of the use of funds
during the period when they were credited to the account of the Issuer.
Immediately upon receipt of the Note in respect of which the fail
occurred, the Trustee will cause the Debt Security Registrar to make appropriate
entries to reflect the fact that the Note was never issued and the Note will be
cancelled and disposed of as provided in the Indenture.
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ANNEX A
Agents' Addresses for
Delivery of the Prospectus
with the Pricing Supplement
---------------------------
[Name and Address
of Agents]
B-18
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EXHIBIT C
PURCHASE AGREEMENT
__________, 199_
ENSERCH Corporation
ENSERCH Center
300 South St. Paul Street
Dallas, Texas 75201
Attention: Treasurer
The undersigned agrees to purchase the following principal amount of
the Securities described in the Agency Agreement dated ______________, 199__
(the "Agency Agreement"):
Principal Amount $____________________
Interest Rate ____%
Maturity Date ____________________
Discount _____% of Principal Amount
Price to be paid to Issuer
(in immediately
available funds) $____________________
Commission to Agent $____________________
Settlement Date _____________________, 199_
Except as otherwise expressly provided herein, all terms used herein
which are defined in the Agency Agreement shall have the same meanings as in the
Agency Agreement. The terms Agent and Agents, as used in the Agency Agreement,
shall be deemed to refer only to the undersigned for purposes of this Agreement.
This Agreement incorporates by reference all of the provisions of the
Agency Agreement, (including any amendment entered into pursuant thereto by the
Issuer and the undersigned Agent, to the extent applicable), except provisions
of the Agency Agreement relating specifically to solicitation by the Agents, as
Agents, and except that (i) the last sentence of Section 7(d) shall not be
applicable; and (ii) the term "this Agreement", as used in Section 7(d) of the
Agency Agreement, shall be deemed to refer to this Agreement (and not the Agency
Agreement) except that in the fifth sentence such term shall be deemed to refer
to the Agency
C-1
<PAGE>
Agreement. [Insert other appropriate changes.] You and we agree to perform, to
the extent applicable, our respective duties and obligations specifically
provided to be performed by each of us in the Procedures.
Our obligation to purchase Securities hereunder is subject to the
accuracy on the above Settlement Date of your representations and warranties
contained in Section 2 of the Agency Agreement (it being understood that such
representations and warranties shall be deemed to be made as of the date of this
Purchase Agreement and references to the Registration Statement and Prospectus
shall be deemed to relate to the Registration Statement and the Prospectus as
amended at such Settlement Date specified above) and to your performance and
observance of all covenants and agreements contained in Sections 4 and 6
thereof. Our obligation hereunder is also subject to the following conditions:
(a) the satisfaction, at such Settlement Date, of each of the
conditions set forth in subsections (a) and (b) and (d) through (g) of
Section 5 of the Agency Agreement (it being understood that each document
so required to be delivered shall be dated such Settlement Date and that
each such condition and the statements contained in each such document that
relate to the Registration Statement or the Prospectus shall be deemed to
relate to the Registration Statement or the Prospectus, as the case may be,
as amended or supplemented as of the date hereof and at the time of
settlement on such Settlement Date and except that the opinion described in
Section 5(d) shall be modified so as to state that the Securities being
sold on such Settlement Date, when delivered against payment therefor as
provided in the Indenture and this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Issuer enforceable in accordance with their
terms, subject only to the exceptions as to enforcement set forth in clause
(iii) of Section 5(d) of the Agency Agreement, and will conform to the
description thereof contained in the Prospectus as amended or supplemented
at such Settlement Date; and
(b) there shall not have occurred between the date hereof and the
above Settlement Date (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Issuer or its subsidiaries which, in our judgment, materially
impairs the investment quality of the Securities; (ii) any downgrading in
the rating of the Securities of any other debt securities of the Issuer by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of the
Securities or any other debt securities of the Issuer (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Issuer on
any exchange or in the over-the-counter market if, in our judgment, any
such event or any condition giving rise thereto or existing concurrently
therewith makes it impracticable or inadvisable to proceed with the
solicitation of offers
C-2
<PAGE>
to purchase, or sales of, Securities on the terms and in the manner
contemplated by the applicable Pricing Supplement and the Prospectus; (iv)
any banking moratorium declared by Federal or New York authorities; or (v)
any declaration of war by Congress or any other substantial national or
international calamity or emergency if, in our judgment, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Securities on the terms and in the manner contemplated
applicable Pricing Supplement and the Prospectus.
In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement Date, you will not offer or
sell, or enter into any agreement to sell, any debt securities of the Issuer in
the United States, other than sales of Securities, borrowings under your
revolving credit agreements and lines of credit, the private placement of
securities and issuances of your commercial paper.
[Insert appropriate provisions as agreed to between the parties hereto
regarding responsibility for expenses.]
If for any reason our purchase of the above Securities is not
consummated, the respective obligations of you and the undersigned pursuant to
Section 7 shall remain in effect.
C-3
<PAGE>
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
executed counterparts shall together constitute one and the same Agreement.
[INSERT NAME OF PURCHASER]
By:________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
ENSERCH CORPORATION
By:_______________________________________
Name:
Title:
C-4
<PAGE>
EXHIBIT 4.1
[FORM OF FACE OF DEBT SECURITY]
[If the Security is to be a Book-Entry Debt Security, insert -- This Security is
a Book-Entry Debt Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Security is exchangeable for Securities registered in the name
of a person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Security
(other than a transfer of this Security as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in such limited
circumstances.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT ANY LEGEND
REQUIRED BY THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE REGULATIONS
THEREUNDER.]
ENSERCH CORPORATION
[Insert Designation of Securities and Series]
No. ________ $ ________
CUSIP No. ________
ENSERCH Corporation, a corporation duly organized and existing under the
laws of the State of Texas (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ______________________________, or
registered assigns, the principal sum of ______________________________ on
________________________________ [If the Security is to bear interest prior to
maturity, insert-, and to pay interest thereon from ____________________ or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on _______________ and _______________ in each year,
commencing _____________________, at the rate of ______% per annum, until the
principal hereof is paid or made available for payment [If applicable insert-,
and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of ______ % per annum on any overdue principal and
premium and on any overdue installment of interest]. [The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months.] 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 _______________ or
_______________ (whether or not a Business Day), as the case may be, 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
<PAGE>
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 said Indenture].
[If the Security is not to bear interest prior to Maturity, insert-The principal
of this Security shall not bear interest except in the case of a default in
payment of principal upon acceleration, upon redemption or at Stated Maturity
and in such case the overdue principal of this Security shall bear interest at
the rate of ______% per annum (to the extent that the payment of such interest
shall be legally enforceable), which shall accrue from the date of such default
in payment to the date payment of such principal has been made or duly provided
for. Interest on any overdue principal shall be payable on demand. Any such
interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of ______% per annum (to the extent that payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert--any such] interest on this Security will be made at the office or agency
of the Company maintained for that purpose in _______________, in [insert the
currency or currencies of payment, if payable in U.S. currency, insert-- 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] [if applicable, insert-;
provided, however, that at the option of the Company payment of interest may be
- -------- -------
made by check mailed to the address of the Person entitled thereto as such
address shall appear in 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.
2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
ENSERCH CORPORATION
By____________________________
By____________________________
[CORPORATE SEAL]
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
____________________________,
as Trustee
By__________________________
Authorized Officer
3
<PAGE>
[FORM OF REVERSE OF SECURITY]
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, dated as of ____________________ (herein called the
"Indenture"), between the Company and _________________, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee [if applicable,
insert-, the holders of Senior Indebtedness] 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 $__________].
[If the Security is to be convertible, insert- Subject to and upon
compliance with the provisions of the Indenture, the Holder of this Security is
entitled, at his option, at any time [on or after the opening of business on
_______________, 19______ and ] on or before the close of business on
_______________, or in case this Security or a portion hereof is called for
redemption, then in respect of this Security or such portion hereof until and
including, but (unless the Company defaults in making the payment due upon
redemption) not after, the close of business on the Redemption Date, to convert
this Security (or any portion of the principal amount hereof which is $1,000 or
an integral multiple thereof), at the principal amount hereof, or of such
portion, into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100 of a share) of Common Stock of the Company at [a
conversion price equal to $__________ aggregate principal amount of Securities
for each share of Common Stock -- the rate of __________ shares of Common Stock
for each $1,000 principal amount of Securities] (or at the current adjusted
conversion [price -- rate] if an adjustment has been made as provided in the
Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank, to the Company at its office or agency in _______________,
accompanied by written notice to the Company that the Holder hereof elects to
convert this Security, or if less than the entire principal amount hereof is to
be converted, the portion hereof to be converted, and, in case such surrender
shall be made during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date within such
period), also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case of
a conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an installment of interest (with certain exceptions provided in
the Indenture), no payment or adjustment is to be made on conversion for
interest accrued hereon or for dividends on the Common Stock issued on
conversion. No fractions of shares or scrip representing fractions of shares
will be issued on conversion, but instead of any fractional interest the Company
shall pay a cash adjustment as provided in the Indenture. The conversion [price
- -- rate] is subject to adjustment as provided in the Indenture. In addition,
the Indenture provides that in case of certain consolidations or mergers to
which the Company is a party or the transfer of substantially all of the assets
of the Company, the Indenture shall be amended, without the consent of any
Holders of Securities, so that this Security, if then outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only
4
<PAGE>
into the kind and amount of securities, cash and other property receivable upon
the consolidation, merger or transfer by a holder of the number of shares of
Common Stock into which this Security might have been converted immediately
prior to such consolidation, merger or transfer (assuming such holder of Common
Stock failed to exercise any rights of election and received per share the kind
and amount received per share by a plurality of non-electing shares) [,
assuming, if such consolidation, merger or transfer is prior to _______________,
19______, that this Security were convertible at the time of such consolidation,
merger or transfer at the initial conversion [price --rate] specified above as
adjusted from ________________, 19______ to such time pursuant to the
Indenture).]
[If applicable, insert- The indebtedness evidenced by this Security is to
the extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. Each Holder hereof, by his
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.]
[If applicable, insert- The Securities of this series are not redeemable in
whole or in part at any time prior to maturity.]
[If applicable, insert- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert-
(1) on ________________ in any year commencing with the year ________________
and ending with the year ________________ through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after ________________, 19_____], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before
_______________, ______ %, and if redeemed] during the 12-month period beginning
________________ of the years indicated,
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
---- ----- ---- -----
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ______% of the principal amount,
together in the case of any such redemption [if applicable, insert-(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
5
<PAGE>
[If applicable, insert-The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on _________________
in any year commencing with the year _________________ and ending with the year
________________ through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [on
or after _______________], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: If redeemed during the 12-month period beginning
________________ of the years indicated,
<TABLE>
<CAPTION>
REDEMPTION PRICE
FOR REDEMPTION REDEMPTION PRICE FOR
THROUGH OPERATION REDEMPTION OTHERWISE
OF THE THAN THROUGH OPERATION
YEAR SINKING FUND OF THE SINKING FUND
---- ------------ -------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to _______% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
_______________, redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than ______% per annum.]
[The sinking fund for this series provides for the redemption on
_______________ in each year beginning with the year __________ and ending with
the year ___________ of [not less than] $__________ [("mandatory sinking fund")
and not more than $___________] aggregate principal amount of Securities of this
series. [Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the [inverse] order in which they become due].]
[If the Security is subject to redemption, insert- In the event of
redemption [or conversion] of this Security in part only, a new Security or
Securities of this series for the unredeemed [or unconverted] portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security, insert-
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.]
6
<PAGE>
[If the Security is an Original Issue Discount Security, insert-If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to--insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of this Security and (b) certain restrictive covenants,
in each case upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Security.
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 at least a majority in principal amount of the
Securities at the time Outstanding of each 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.
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 premium and interest,
if any, on this Security at the times, place and rate, and in the coin or
currency, herein prescribed [if applicable, insert- or to convert this Security
as provided in the Indenture].
As provided in the Indenture and subject to certain limitations
[herein and] therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and premium and interest, if any, on this Security are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
[The Securities of this series are issuable only in registered form
without coupons in denominations of $__________ and any integral multiple
thereof.] [This global Book-Entry Security is exchangeable for Securities in
definitive form only under certain limited circumstances set forth in the
Indenture. Securities of this series so issued are issuable only in registered
form without coupons in denominations of $__________ and any integral multiple
thereof.] As provided in the Indenture and subject to certain limitations
[herein and] therein set forth, Securities of this series [so issued] are
exchangeable for a like aggregate principal amount of
7
<PAGE>
Securities of this series of a different authorized denomination, 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.
Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
____________________
8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the within Security, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT - ...... Custodian......
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to
JT TEN - as joint tenants with Minors Act
right of survivorship ......................
and not as tenants (State)
in common
Additional abbreviations may also be used though not in the above list.
____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
______________________________________________________________________________
______________________________________________________________________________
the within Security of ENSERCH CORPORATION and hereby does irrevocably
constitute and appoint
______________________________________________________________________________
Attorney to transfer the said Security on the books of the within-named
Corporation, with full power of substitution in the premises.
Dated: ____________________________________
Signature Guaranteed by:
9
<PAGE>
EXHIBIT 4.2
REGISTERED REGISTERED
ENSERCH CORPORATION
No. MEDIUM-TERM NOTE, SERIES A CUSIP No.
(Fixed Rate)
[If the Security is to be a Book-Entry Debt Security, insert - This Security is
a Book-Entry Debt Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Security is exchangeable for Securities registered in the name
of a Person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Security
(other than a transfer of this Security as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in such limited
circumstances.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY Person IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
PRINCIPAL AMOUNT: ISSUE PRICE:
(U.S. Dollars) (If other than 100% of the Principal Amount)
ISSUE DATE: STATED MATURITY:
INTEREST RATE: COMPUTATION PERIOD:
INTEREST PAYMENT DATE(S): REGULAR RECORD DATE(S):
REDEMPTION DATE(S): REDEMPTION PERCENTAGE(S):
REDEMPTION DATE(S) REDEMPTION PERCENTAGE(S)
(OPTION OF HOLDER): (OPTION OF HOLDER):
NOTICE PERIOD: ORIGINAL ISSUE DISCOUNT SECURITY:
If applicable, the following will be
completed for the purpose of applying the
United States federal income tax original
issue discount ("OID") rules:
OTHER PROVISIONS:
TOTAL AMOUNT OF OID:
YIELD TO MATURITY:
INITIAL ACCRUAL PERIOD OID:
<PAGE>
ENSERCH CORPORATION, a corporation duly organized and existing under
the laws of the State of Texas (herein called the "Company", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [If the Security is to be a Book-Entry Debt
Security, insert - Cede & Co., as nominee for The Depository Trust Company]
[________________], or registered assigns, the Principal Amount specified above
on the Stated Maturity specified above and to pay interest thereon (computed,
unless a different Computation Period is specified above, on the basis of a 360-
day year of twelve 30-day months) from and including the Issue Date specified
above or from and including the most recent Interest Payment Date to which
interest on this Security (or any Predecessor Security) has been paid or duly
provided for to, but excluding, the Interest Payment Date, on the Interest
Payment Date(s) specified above in each year (each an "Interest Payment Date")
and at Maturity, at the rate per annum equal to the Interest Rate specified
above, until the principal hereof is paid or duly made available for payment.
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 any Predecessor Security) is registered at the
close of business on the fifteenth day next preceding such Interest Payment
Date, unless a different Regular Record Date is specified above (the "Regular
Record Date"); provided, however, that interest payable at Maturity will be
payable to the Person to whom principal shall be payable; and provided, further,
that if the Issue Date is after a Regular Record Date and before the next
succeeding Interest Payment Date the first payment of interest shall be payable
on the second Interest Payment Date following the Issue Date to the Person in
whose name this Security (or any Predecessor Security) is registered at the
close of business on the Regular Record Date immediately preceding such Interest
Payment Date. Any such interest which is payable, but not so punctually paid or
duly provided for, on any Interest Payment Date will forthwith cease to be
payable to the Holder on such Regular Record Date and such defaulted interest
may either be paid to the Person in whose name this Security (or any Predecessor
Security) 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 referred to on
the reverse hereof, 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 this Security may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the corporate trust office of the Trustee in the
Borough of Manhattan, The City of New York, or such other office or agency of
the Company maintained by it for that purpose in the Borough of Manhattan, The
City 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, payment of interest
(other than interest payable at Maturity) may be made by check mailed to the
address of the Holder as such address shall appear in 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 by the manual signature of an authorized signatory, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-2-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by manual or facsimile signature under its corporate seal.
Dated:
ENSERCH CORPORATION
[CORPORATE SEAL]
By:________________________________
By:________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
FIRST NATIONAL BANK OF CHICAGO,
As Trustee
By:_______________________________
Authorized Officer
-3-
<PAGE>
This Security is one of a duly authorized issue of securities of the
Company (the "Securities") issued and to be issued in one or more series under
the Indenture, dated as of February 15, 1992 (the "Indenture"), between the
Company and The First National Bank of Chicago, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
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, initially limited to an aggregate principal amount not to
exceed $__________ (or if Securities of this series are to be Original Issue
Discount Securities, such principal amount as shall result in an aggregate
initial offering price of Securities equivalent to not more than $100,000) which
limit may be increased at the option of the Company in the future if it
determines that it may wish to sell additional Securities. Except as may be
otherwise stated on the face hereof, the Securities of this series are issuable
only as registered Securities, without coupons, in denominations of $1,000 and
integral multiples of $__________ in excess thereof. The Securities of this
series may be issued from time to time in various principal amounts, may mature
at different times, may bear interest at different rates, may be subject to
different redemption provisions, if any, and may otherwise vary. 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 of a different authorized
denomination, as requested by the Holder surrendering the same.
The Securities are general, direct, unconditional and unsecured
obligations of the Company.
If this Security is designated on the face hereof as an Original Issue
Discount Security, then, notwithstanding anything to the contrary contained in
this Security, upon the redemption or acceleration of Maturity of this Security
there shall be payable in lieu of the Principal Amount, an amount equal to the
Amortized Face Amount of this Security. The "Amortized Face Amount" shall be
the amount equal to (a) the Principal Amount multiplied by the Issue Price
specified on the face hereof (expressed as a percentage of the Principal
Amount), plus (b) that portion of the difference between the Issue Price and
the Principal Amount that has been amortized at the Stated Yield (as defined
below) of this Security (computed in accordance with generally accepted United
States bond yield computation principles) at the date as of which the Amortized
Face Amount is calculated, but in no event shall the Amortized Face Amount
exceed the Principal Amount hereof. As used in the previous sentence "Stated
Yield" means the Yield to Maturity specified on the face hereof (or if not so
specified, the yield to maturity compounded semi-annually and computed in
accordance with generally accepted United States bond yield computation
principles) for the period from the Issue Date to the Stated Maturity on the
basis of the Issue Price and the Principal Amount.
If one or more Redemption Dates (or ranges of Redemption Dates) is
specified on the face hereof, this Security is subject to redemption upon not
less than 30 nor more than 60 days' notice by mail, on any such date (or during
any such range), as a whole, or from time to time in part, at the election of
the Company, at a Redemption Price determined as provided in the next succeeding
sentence, together with accrued interest to the Redemption Date, but interest
installments whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holder hereof (or one or more Predecessor Securities) of record
at the close of business on the Regular Record Dates referred to on the face
hereof, all as provided in the Indenture. If applicable, the "Redemption Price"
for any such redemption shall be the amount determined by multiplying the
Redemption Percentage specified on the face hereof with respect to the relevant
Redemption Date (or range of such
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<PAGE>
dates), by the portion of the principal amount hereof (or, if this Security is
an Original Issue Discount Security, the portion of the Amortized Face Amount
hereof) to be redeemed; provided, however, that in no event shall the Redemption
Price be less than 100% of the portion of the principal amount hereof (or, if
this Security is an Original Issue Discount Security, the portion of the
Amortized Face Amount hereof) to be redeemed.
Notice of redemption having been given as aforesaid, this Security (or
the portion of the principal amount hereof so to be redeemed) shall, on the
Redemption Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) shall cease to bear
interest. In the case of any partial redemption of Securities of this series at
the option of the Company, the Securities of a particular tenor with like terms
to be redeemed shall be selected by the Trustee not more than 60 days prior to
the Redemption Date by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal amount of Securities. In the event of any redemption of this
Security in part only, a new Security or Securities of this series of like tenor
and terms for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the surrender and cancellation hereof.
If one or more Redemption Dates (Option of Holder) (or ranges of such
dates) is specified on the face hereof, this Security is subject to redemption
on any such date (or during any such range) or, if such date is not a Business
Day, on the first Business Day following such date, as a whole or from time to
time in part, at the election of the Holder hereof, at a Redemption Price
determined as provided in the last sentence of this paragraph together with
accrued interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holder
hereof of record at the close of business on the Regular Record Date referred to
on the face hereof, all as provided in the Indenture. Such election shall be
effected by the Holder hereof delivering to the Company at the principal
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York not less than 30 nor more than 60 days prior to the date on which this
Security is to be redeemed, or during such other Notice Period specified on the
face hereof, a notice requesting such redemption in the form described below and
specifying the date upon which this Security is to be redeemed. Any notice
given by a Holder pursuant to this paragraph shall consist of either (i) this
Security with the form entitled "Option to Elect Redemption" set forth at the
end of this Security duly completed or (ii) a telegram, facsimile transmission
or a letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the Holder hereof, the principal
amount of this Security, the principal amount of this Security to be redeemed,
the certificate number or a description of the terms of this Security, a
statement that the option to elect redemption is being exercised thereby and a
guarantee that this Security, together with the duly completed form entitled
"Option to Elect Redemption" below, will be received by the Trustee not later
than the fifth Business Day after the date of such telegram, facsimile
transmission or letter; provided, however, that such telegram, facsimile
transmission or letter shall only be effective if this Security and form duly
completed are received by the Trustee by such fifth Business Day. Exercise of
the redemption option by the Holder hereof will be irrevocable. If applicable,
the "Redemption Price" for any such redemption shall be determined by
multiplying the Redemption Percentage (Option of Holder) specified on the face
hereof with respect to the relevant Redemption Date (Option of Holder) (or range
of such dates) by the portion of the principal amount hereof (or, if this
Security is an Original Issue Discount Security, the portion of the Amortized
Face Amount hereof) to be redeemed; provided, however, that in no event shall
the Redemption Price be less than 100% of the portion of the
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<PAGE>
principal amount hereof (or, if this Security is an Original Issue Discount
Security, the portion of the Amortized Face Amount hereof) to be redeemed.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of this Security and (b) certain restrictive covenants,
in each case upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Security.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
(or, in the case of Original Issue Discount Securities the Amortized Face Amount
thereof) 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 each 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 set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the outstanding Securities of this series shall
have made written request, and offered reasonable indemnity to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the outstanding Securities
of this series a direction inconsistent with such request and the Trustee shall
have failed to institute such proceeding within 60 days; provided, however, that
such limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and premium (if any) or interest on
this Security 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 premium (if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and premium
(if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
-6-
<PAGE>
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, the Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same. In the event of any redemption at the option of the Company, the Trustee
shall not be required to (i) issue, register the transfer of or exchange
Securities of this series of like tenor during a period beginning at the open of
business 15 days before the day of the mailing of a notice of any redemption and
ending at the close of business on the day of such mailing, or (ii) register the
transfer of or exchange any Security so selected for redemption, of any
redemption in part, the portion of any Security not to be redeemed. Following
the exercise of a redemption option by the Holder hereof, the Trustee shall not
be required to issue, register the transfer of or exchange that portion of this
Security with respect to which such option has been exercised.
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 Securities of this series may be issued in the form of one or more
Book-Entry Debt Securities to The Depository Trust Company as Depository for the
Securities of this series or its nominee and registered in the name of the
Depository or such nominee. If the face of this Security contains a legend
indicating that this Security is a Book-Entry Debt Security so registered, the
transfer and exchange hereof is subject to the additional limitations set forth
in such legend and in the Indenture.
Prior to due presentment of this 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 this Security is registered as the absolute
owner hereof for all purposes, whether or not this Security is overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
___________________________________
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the within Security, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM-as tenants in common UNIF GIFT MIN ACT -.......Custodian.......
TEN ENT-as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right of under Uniform Gifts to
survivorship and not as tenants Minors Act.............
in common (State)
Additional abbreviations may also be used though not in the above list.
___________________________
-7-
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
______________________________________________________________________________
______________________________________________________________________________
the within Security of ENSERCH CORPORATION and hereby does irrevocably
- ----------------------------------------------------------------------
constitute and appoint
__________________________________________________________________ Attorney to
transfer the said Security on the books of the within-named Corporation, with
full power of substitution in the premises.
Dated: ______________________________
Signature Guaranteed by:
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<PAGE>
OPTION TO ELECT REDEMPTION
The undersigned hereby irrevocably requests and instructs ENSERCH
Corporation to redeem the within Security (or portion thereof specified below)
pursuant to its terms at the Redemption Price, to the undersigned at
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of the
undersigned)
______________________________________________________________________________
______________________________________________________________________________
If less than the entire principal amount of the within Security is to
be redeemed, specify the portion thereof which the Holder elects to have
redeemed:
_____________________________________________________________________________;
and specify the denomination or denominations (which shall not be less than the
minimum authorized denomination) of the Securities to be issued to the Holder
for the portion of the within Security not being redeemed (in the absence of any
such specification, one such Security will be issued for the portion not being
redeemed):
______________________________________________________________________________
Dated:__________________ X_________________________________________
NOTICE: The signature on this Option to Elect
Redemption must correspond with the name as
written upon the face of the within instrument in
every particular, without alteration or
enlargement or any change whatever.
-9-
<PAGE>
EXHIBIT 4.3
REGISTERED REGISTERED
ENSERCH CORPORATION
No. MEDIUM-TERM NOTE, SERIES A CUSIP No.
(Floating Rate)
[If the Security is to be a Book-Entry Debt Security, insert - This Security is
a Book-Entry Debt Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Security is exchangeable for Securities registered in the name
of a Person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Security
(other than a transfer of this Security as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in such limited
circumstances.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY Person IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
PRINCIPAL AMOUNT: ISSUE PRICE:
(U.S. Dollars) (If other than 100% of the
Principal Amount)
ISSUE DATE: STATED MATURITY:
INTEREST RATE BASIS: COMPUTATION PERIOD:
INTEREST PAYMENT DATE(S): REGULAR RECORD DATE(S):
INDEX MATURITY: SPREAD (PLUS OR MINUS):
INITIAL INTEREST RATE: SPREAD MULTIPLIER:
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE:
INTEREST PAYMENT PERIOD: INTEREST PAYMENT MONTH(S):
(monthly, quarterly,
semi-annually or annually)
INTEREST RESET PERIOD: INTEREST RESET MONTH(S):
(daily, weekly, monthly,
quarterly, semi-annually
or annually)
CALCULATION DATE(S): CALCULATION AGENT:
INTEREST RESET DATE(S):
<PAGE>
REDEMPTION DATE(S): REDEMPTION PERCENTAGE(S):
REDEMPTION DATE(S) REDEMPTION PERCENTAGE(S)
(OPTION OF HOLDER): (OPTION OF Holder):
NOTICE PERIOD: ORIGINAL ISSUE DISCOUNT SECURITY:
If applicable, the following will
be completed for the purpose of
applying the United States federal
income tax original issue discount
("OID") rules:
OTHER PROVISIONS: TOTAL AMOUNT OF OID:
YIELD TO MATURITY:
INITIAL ACCRUAL PERIOD OID:
<PAGE>
ENSERCH CORPORATION, a corporation duly organized and existing under the
laws of the State of Texas (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., as nominee for [If the Security
is to be a Book-Entry Debt Security, insert - The Depository Trust Company]
[_________________], or registered assigns, the Principal Amount specified above
on the Stated Maturity specified above and to pay interest thereon, from and
including the Issue Date specified above or from and including the most recent
Interest Payment Date (as hereinafter defined) to which interest on this
Security (or any Predecessor Security) has been paid or duly provided for to,
but excluding, the Interest Payment Date (or, if the Interest Reset Period
specified above is daily or weekly, from and including the Issue Date or from
and including the day following the most recent Regular Record Date with respect
to which interest has been paid or duly provided for, as the case may be, to but
excluding the day following the Regular Record Date immediately preceding such
Interest Payment Date), at a rate per annum equal to the Initial Interest Rate
specified above until the first Interest Reset Date (as defined on the reverse
hereof) following the Issue Date and thereafter at a rate determined in
accordance with the provisions on the reverse hereof under the heading
"Determination of Commercial Paper Rate", "Determination of CD Rate",
"Determination of Prime Rate", "Determination of Federal Funds Effective Rate",
"Determination of LIBOR" or "Determination of Treasury Rate", depending upon
whether the Interest Rate Basis specified above is Commercial Paper Rate, CD
Rate, Prime Rate, Federal Funds Effective Rate, LIBOR or Treasury Rate until the
principal hereof is paid or duly made available for payment. Such interest shall
be payable by the Company monthly, quarterly, semi-annually or annually as
specified above under "Interest Payment Period" and, unless otherwise specified
above under "Interest Payment Date(s)", such interest shall be payable by the
Company on the third Wednesday of the month or months specified above under
"Interest Payment Month(s)" in each year (or if any such day is not a Business
Day (as defined on the reverse hereof) with respect to this Security, on the
next succeeding Business Day with respect to this Security or, if the Interest
Rate Basis specified above is LIBOR and the next succeeding such Business Day
falls in the next calendar month, the next preceding such Business Day) (each
date so specified above or, if none is so specified, determined as herein
provided, an "Interest Payment Date") and at Maturity. The interest so payable,
and punctually paid or duly provided for, on any such Interest Payment Date will
be paid to the Person in whose name this Security (or any Predecessor Security)
is registered at the close of business on the fifteenth day (whether or not a
Business Day) next preceding such Interest Payment Date, unless a different
Regular Record Date is specified above (the "Regular Record Date"); provided,
however, that interest payable at Maturity will be payable to the Person to whom
principal shall be payable; and provided, further, that if the Issue Date is
after a Regular Record Date and before the next succeeding Interest Payment Date
the first payment of interest shall be payable on the second Interest Payment
Date following the Issue Date to the Person in whose name this Security (or any
Predecessor Security) is registered at the close of business on the Regular
Record Date immediately preceding such Interest Payment Date. Any such interest
which is payable, but not punctually paid or duly provided for, on any Interest
Payment Date will forthwith cease to be payable to the Holder on such Regular
Record Date and such defaulted interest may either be paid to the Person in
whose name this Security (or any Predecessor Security) 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 referred to on the reverse hereof, 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 this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture.
3
<PAGE>
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the corporate trust office of the Trustee in the
Borough of Manhattan, The City of New York, or such other office or agency of
the Company maintained by it for that purpose in the Borough of Manhattan, The
City 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, payment of interest
(other than interest payable at Maturity) may be made by check mailed to the
address of the Holder as such address shall appear in 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 by the manual signature of an authorized signatory, this Security shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by manual or facsimile signature under its corporate seal.
Dated:
ENSERCH CORPORATION
[CORPORATE SEAL]
By:________________________________
By:________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
FIRST NATIONAL BANK OF CHICAGO,
As Trustee
By:_________________________________
Authorized Officer
5
<PAGE>
This Security is one of a duly authorized issue of securities of the
Company (the "Securities") issued and to be issued in one or more series under
the Indenture, dated as of February 15, 1992 (the "Indenture"), between the
Company and The First National Bank of Chicago, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, 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,
initially limited to an aggregate principal amount not to exceed $___________
(or, if Securities of this series are to be Original Issue Discount Securities,
such principal amount as shall result in an aggregate initial offering price of
Securities equivalent to no more than $___________) which limit may be increased
at the option of the Company in the future if it determines that it may wish to
sell additional Securities. Except as otherwise may be stated on the face
hereof, the Securities of this series are issuable only as registered
Securities, without coupons, in denominations of $100,000 and integral multiples
of $1,000 in excess thereof. The Securities of this series may be issued from
time to time in various principal amounts, may mature at different times, may
bear interest at different rates, may be subject to different redemption
provisions, if any, and may otherwise vary. 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 of a different authorized denomination, as requested by the
Holder surrendering the same.
The Securities are general, direct, unconditional and unsecured obligations
of the Company.
Accrued interest hereon shall be calculated by multiplying the principal
amount specified on the face hereof by an accrued interest factor. Such accrued
interest factor shall be computed by adding the interest factor calculated for
each day in the period for which accrued interest is being calculated. The
interest factor (expressed as a decimal rounded upwards, if necessary, as
described below) for each such day shall be computed by dividing the interest
rate (expressed as a decimal rounded upwards, if necessary, as described below)
applicable to such day by 360, if the Interest Rate Basis specified on the face
hereof is the Commercial Paper Rate, CD Rate, Prime Rate, Federal Funds
Effective Rate or LIBOR, by the actual number of days in the year (365 or 366,
as the case may be) if the Interest Rate Basis specified on the face hereof is
the Treasury Rate, or by the number of days in the Computation Period specified
on the face hereof. Except as otherwise provided herein, all percentages
resulting from any calculation with respect to this Security will be rounded, if
necessary, to the nearest one-hundred thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544)
being rounded to 9.87654% (or .0987654)), and all dollar amounts used in or
resulting from such calculations will be rounded to the nearest cent (with one-
half cent being rounded upwards).
The rate of interest on this Security will be reset daily, weekly, monthly,
quarterly, semi-annually or annually, as specified on the face hereof under
Interest Reset Period (each date upon which interest is so reset as provided
below being hereinafter referred to as an "Interest Reset Date"), and the
interest rate in effect on any day shall be (a) if such day is an Interest Reset
Date, the interest rate for such Interest Reset Date or (b) if such day is not
an Interest Reset Date the interest rate for the immediately preceding Interest
Reset Date; provided, however, that (i) the interest rate in effect from the
Issue Date of this Security to but excluding the first Interest Reset Date will
be the Initial Interest Rate and (ii) the interest rate in effect
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for the ten calendar days immediately prior to Maturity of this Security will be
that in effect on the tenth calendar day preceding such Maturity.
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, specified on the face hereof and in no event shall be higher than the
maximum rate permitted by New York law, as the same may be modified by United
States law of general application. Unless otherwise specified on the face
hereof and except as provided in the next succeeding sentence, the Interest
Reset Date with respect to this Security will be, if the Interest Reset Period
specified on the face hereof is daily, each Business Day; if the Interest Reset
Period specified on the face hereof is weekly (unless the Interest Rate Basis
specified on the face hereof is the Treasury Rate), the Wednesday of each week;
if the Interest Reset Period specified on the face hereof is weekly and the
Interest Rate Basis specified on the face hereof is the Treasury Rate, except as
otherwise provided below, the Tuesday of each week; if the Interest Reset Period
specified on the face hereof is monthly, the third Wednesday of each month; if
the Interest Reset Period specified on the face hereof is quarterly, the third
Wednesday of each March, June, September and December; if the Interest Reset
Period specified on the face hereof is semi-annually, the third Wednesday of two
months in each year specified under "Interest Reset Month(s)" on the face
hereof; and if the Interest Reset Period specified on the face hereof is
annually, the third Wednesday of the month in each year specified under
"Interest Reset Month(s)" on the face hereof. If, pursuant to the preceding
sentence, any Interest Reset Date would otherwise be a day that is not a
Business Day (as defined below) with respect to this Security, the Interest
Reset Date shall be the next succeeding day that is a Business Day with respect
to this Security, except that if the Interest Rate Basis specified on the face
hereof is LIBOR and the next succeeding Business Day falls in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. Subject to applicable provisions of law and except as
specified herein, on each Interest Reset Date the rate of interest on this
Security shall be the rate determined in accordance with the provisions of the
applicable heading below.
"Business Day" means (i) with respect to any Security of this series the
rate of interest on which is determined other than in accordance with the
provisions of the heading "Determination of LIBOR" below, any day that is not a
Saturday or Sunday and that in New York, New York is not a day on which banking
institutions are generally authorized or obligated by law to close and (ii) with
respect to any Security of this series the rate of interest on which is
determined in accordance with the provisions of the heading "Determination of
LIBOR" below, any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market.
Determination of Commercial Paper Rate. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, the interest rate
with respect to this Security for any Interest Reset Date shall equal (a) the
Money Market Yield (calculated as described below) of the rate on the second
Business Day with respect to this Security immediately preceding such Interest
Reset Date (the "Commercial Paper Interest Determination Date") for commercial
paper having the Index Maturity specified on the face hereof, (i) as published
in "Statistical Release H.15(519), Selected Interest Rates", or any successor
publication published by the Board of Governors of the Federal Reserve System
("H.15(519)"), under the heading "Commercial Paper", or (ii) if such rate is not
so published prior to 9:00 A.M., New York City time, on the Calculation Date (as
defined below) pertaining to such Commercial Paper Interest Determination Date,
then as published in "Composite 3:30 P.M. Quotations for U.S. Government
Securities", or any successor publication published by the Federal Reserve Bank
of New York ("Composite Quotations"), under the heading "Commercial Paper", or
(b) if such rate is not published in either H.15(519) by 9:00 A.M., New York
City time, on such Calculation Date or Composite
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<PAGE>
Quotations by 3:00 P.M., New York City time, on such Calculation Date, the Money
Market Yield of the arithmetic mean, as calculated by the Calculation Agent on
such Calculation Date, of the offered rates, as of 11:00 A.M., New York City
time, on such Commercial Paper Interest Determination Date, of three leading
dealers of commercial paper in The City of New York selected by the Calculation
Agent for commercial paper having the Index Maturity specified on the face
hereof placed for an industrial issuer whose bond rating is "AA", or the
equivalent, from a nationally recognized rating agency, in each of the above
cases adjusted by the addition or subtraction of the Spread, if any, specified
on the face hereof, or by multiplication by the Spread Multiplier, if any,
specified on the face hereof; provided, however, that if such dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Commercial Paper Rate shall be the Commercial Paper Rate in effect
on such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a percentage
point), calculated in accordance with the following formula:
D x 360
_________ x 100
Money Market Yield = 360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest in being calculated.
Determination of CD Rate. If the Interest Rate Basis specified on the face
hereof is the CD Rate, the Interest Rate with respect to any Interest Reset Date
shall equal (a) the rate on the second Business Day with respect to this
Security immediately preceding such Interest Reset Date (the "CD Rate Interest
Determination Date") for negotiable certificates of deposit having the Index
Maturity specified on the face hereof, (i) as published in H.15(519) under the
heading "CDs (Secondary Market)", or (ii) if such rate is not published prior to
9:00 A.M., New York City time, on the Calculation Date pertaining to such CD
Rate Interest Determination Date, then as published in Composite Quotations
under the heading "Certificates of Deposit", or (b) if such rate is neither
published in H.15(519) by 9:00 A.M., New York City time, on such Calculation
Date nor in Composite Quotations by 3:00 P.M., New York City time, on such date,
the arithmetic mean, as calculated by the Calculation Agent, of the secondary
market offered rates, as of 10:00 A.M., New York City time, on such CD Rate
Interest Determination Date, of three leading nonbank dealers of negotiable U.S.
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks with a remaining maturity closest to the Index Maturity
specified on the face hereof in a denomination of $5,000,000 in each of the
above cases adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication of the Spread Multiplier, if
any, specified on the face hereof; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate will be the CD Rate in effect on such CD Rate
Interest Determination Date.
Determination of Prime Rate. If the Interest Rate Basis specified on the
face hereof is the Prime Rate, the Interest Rate with respect to this Security
for any Interest Reset Date shall equal (a) the rate on the second Business Day
with respect to this Security immediately preceding such Interest Reset Date
(the "Prime Rate Interest Determination Date") as published in H.15(519) under
the heading "Bank Prime Loan", (b) if such rate is not so published prior to
9:00 A.M., New York City time, on the Calculation Date pertaining to such Prime
Rate Interest Determination Date, the arithmetic
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mean, as calculated by the Calculation Agent on such Calculation Date, of the
rates of interest publicly announced by each bank that appears on the Reuters
Screen NYMF Page (as defined below) as such bank's prime rate or base lending
rate as in effect for that Prime Rate Interest Determination Date, (c) if fewer
than four such rates but more than one such rate appear on the Reuters Screen
NYMF Page for that Prime Rate Interest Determination Date, the Prime Rate will
be the arithmetic mean, as calculated by the Calculation Agent, of the prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent, and (d) if fewer than two quotations are
provided, the Prime Rate shall be determined on the basis of the rates furnished
in The City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, having total equity capital of at least $500 million and
being subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent to provide such rate or rates, in each of the
above cases adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication of the Spread Multiplier, if
any, specified on the face hereof; provided, however, that if the banks selected
as aforesaid are not quoting as mentioned in this sentence, the Prime Rate will
be the Prime Rate in effect on such Prime Rate Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
Determination of Federal Funds Effective Rate. If the Interest Rate Basis
specified on the face hereof is the Federal Funds Effective Rate, the interest
rate with respect to this Security for any Interest Reset Date shall equal (a)
the rate on the second Business Day with respect to this Security immediately
preceding such Interest Reset Date (the "Federal Funds Effective Interest
Determination Date") for Federal Funds having the Index Maturity specified on
the face hereof (i) as published in H.15(519) under the heading "Federal Funds
(Effective)" or (ii) if such rate is not so published prior to 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Federal Funds
Effective Interest Determination Date, then as published in Composite Quotations
under the heading "Federal Funds/Effective Rate" or (b) if such rate is neither
published in either H.15(519) by 9:00 A.M., New York City time, on such
Calculation Date nor in Composite Quotations by 3:00 P.M., New York City time,
on such date, the arithmetic mean, as calculated by the Calculation Agent on
such Calculation Date, of the rates, as of 11:00 A.M., New York City time, on
such Federal Funds Effective Interest Determination Date, for the last
transaction in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent, in each of the above cases adjusted by the addition or subtraction of the
Spread, if any, specified on the face hereof, or by multiplication by the Spread
Multiplier, if any, specified on the face hereof; provided, however, that if the
brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Effective Rate will be the Federal
Funds Effective Rate in effect on such Federal Funds Effective Interest
Determination Date.
Determination of LIBOR. If the Interest Rate Basis specified on the face
hereof is LIBOR, the interest rate with respect to this Security for any
Interest Reset Date shall be determined by the Calculation Agent in accordance
with the following provisions:
(i) On the second Business Day prior to such Interest Reset Date (a
"LIBOR Interest Determination Date"), the Calculation Agent will
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<PAGE>
determine LIBOR on the basis of the arithmetic mean of the offered rates
for deposits of not less than U.S. $1,000,000 having the Index Maturity
specified on the face hereof, commencing on the second Business Day
immediately following such LIBOR Interest Determination Date, which appears
on the display designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page on that service
for the purpose of displaying London interbank offered rates of major
banks) (the "Reuters Screen LIBO Page") as of 11:00 A.M., London time, on
that LIBOR Interest Determination Date, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that if fewer than two such offered rates so
appear, LIBOR for such LIBOR Interest Determination Date will be determined
as described in (ii) below.
(ii) If on any LIBOR Interest Determination Date fewer than two offered
rates appear on the Reuters Screen LIBO Page, LIBOR will be determined on
the basis of the rates at approximately 11:00 A.M., London time, on such
LIBOR Interest Determination Date at which deposits in U.S. dollars having
the Index Maturity specified on the face hereof are offered to prime banks
in the London interbank market by four major banks selected by the
Calculation Agent commencing on the second Business Day immediately
following such LIBOR Interest Determination Date, and in a principal amount
equal to an amount of not less than U.S. $1,000,000 that in the Calculation
Agent's judgment is representative for a single transaction in such market
at such time. The Calculation Agent will request the principal London
office of each such bank to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean, as calculated by the
Calculation Agent, of such quotations, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face
hereof. If fewer than two quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean, as calculated by
the Calculation Agent, of the rates quoted at approximately 11:00 A.M., New
York City time, on such LIBOR Interest Determination Date by three major
banks in The City of New York, selected by the Calculation Agent, for loans
in U.S. dollars to leading European banks, having the Index Maturity
specified on the face hereof, commencing on the second Business Day
immediately following such LIBOR Interest Determination Date, and in a
principal amount equal to an amount of not less than U.S. $1,000,000 that
in the Calculation Agent's judgment is representative for a single
transaction in such market at such time, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR will
be the LIBOR in effect on such LIBOR Interest Determination Date.
Determination of Treasury Rate. If the Interest Rate Basis specified on the
face hereof is the Treasury Rate, the interest rate with respect to this
Security for any Interest Reset Date shall equal (a) the rate for the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof as published in H.15(519)
under the heading "U.S. Government Securities - auction average (investment)" on
the Treasury Interest Determination Date (as defined below) or (b) if such rate
is not so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the auction average
rate (expressed as bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such
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<PAGE>
auction as otherwise announced by the United States Department of the Treasury
or (c) in the event that the results of the auction of Treasury bills having the
Index Maturity specified on the face hereof are not published or reported as
provided in (a) or (b) above by 3:00 P.M., New York City time, on such
Calculation Date or if no such auction is held in a particular week, the yield
to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean, as
calculated by the Calculation Agent on such Calculation Date, of the secondary
market bid rates as of approximately 3:30 P.M., New York City time, on such
Treasury Interest Determination Date, of three leading primary United States
government securities dealers selected by the Calculation Agent for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity specified
on the face hereof, in each of the above cases adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if such dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate shall be
the Treasury Rate on such Treasury Interest Determination Date.
The "Treasury Interest Determination Date" pertaining to an Interest Reset
Date will be the day of the week in which such Interest Reset Date falls on
which Treasury bills would normally be auctioned. Treasury bills are usually
sold at auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is usually held on the following Tuesday, except that
such auction may be held on the preceding Friday. If, as a result of a legal
holiday, an auction is held for such week on the preceding Friday, such
preceding Friday shall be the Treasury Interest Determination Date for such
week. If an auction falls on a day that is an Interest Reset Date, such Interest
Reset Date will be the next following Business Day.
Unless otherwise specified on the face hereof, the Calculation Date shall
be the tenth day after such interest determination date or, if any such day is
not a Business Day, the next succeeding Business Day. Unless otherwise specified
on the face hereof, the Calculation Agent shall be the Trustee.
If this Security is designated on the face hereof as an Original Issue
Discount Security, then, notwithstanding anything to the contrary contained in
this Security, upon the redemption or acceleration of Maturity of this Security
there shall be payable in lieu of the Principal Amount an amount equal to the
Amortized Face Amount of this Security. The "Amortized Face Amount" shall be the
amount equal to (a) the Principal Amount multiplied by the Issue Price specified
on the face hereof (expressed as a percentage of the Principal Amount), plus (b)
that portion of the difference between the Issue Price and the Principal Amount
that has been amortized at the Stated Yield (as defined below) of this Security
(computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount exceed the Principal
Amount hereof. As used in the previous sentence "Stated Yield" means the Yield
to Maturity specified on the face hereof (or if not so specified, the yield to
maturity compounded semi-annually and computed in accordance with generally
accepted United States bond yield computation principles) for the period from
the Issue Date to the Stated Maturity on the basis of the Issue Price and the
Principal Amount.
If one or more Redemption Dates (or ranges of Redemption Dates) is
specified on the face hereof, this Security is subject to redemption upon not
less than 30 nor more than 60 days' notice by mail, on any such date (or during
any such range) as a whole, or from time to time in part, at the option of the
Company, at a Redemption Price determined as provided in the next succeeding
sentence, together with accrued interest to the Redemption Date; but interest
installment whose Stated Maturity is on or prior to the
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<PAGE>
Redemption Date will be payable to the Holder hereof(or one or more Predecessor
Securities) of record at the close of business on the Regular Record Dates
referred to on the face hereof, all as provided in the Indenture. If
applicable, the "Redemption Price" for any such redemption shall be the amount
determined by multiplying the Redemption Percentage specified on the face hereof
with respect to the relevant Redemption Date (or range of such dates) by the
portion of the principal amount hereof (or, if this Security is an Original
Issue Discount Security, the portion of the Amortized Face Amount hereof) to be
redeemed; provided, however, that in no event shall the Redemption Price be less
than 100% of the portion of the principal amount hereof (or, if this Security is
an Original Issue Discount Security, the portion of the Amortized Face Amount
hereof) to be redeemed.
Notice of redemption having been given as aforesaid, this Security (or the
portion of the principal amount hereof so to be redeemed) shall, on the
Redemption Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) shall cease to bear
interest. In the case of any partial redemption of Securities of this series at
the option of the Company, the Securities of a particular tenor with like terms
to be redeemed shall be selected by the Trustee not more than 60 days prior to
the Redemption Date by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal amount of Securities. In the event of any redemption of this
Security in part only, a new Security or Securities of this series of like tenor
and terms for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the surrender and cancellation hereof.
If one or more Redemption Dates (Option of Holder) (or ranges of such
dates) is specified on the face hereof, this Security is subject to redemption
on any such date (or during any such range) or, if such date is not a Business
Day, on the first Business Day following such date, as a whole or from time to
time in part, at the election of the Holder hereof, at a Redemption Price
determined as provided in the last sentence of this paragraph together with
accrued interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holder
hereof of record at the close of business on the Regular Record Date referred to
on the face hereof, all as provided in the Indenture. Such election shall be
effected by the Holder hereof delivering to the Company at the principal
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York not less than 30 nor more than 60 days prior to the date on which this
Security is to be redeemed, or during such other Notice Period specified on the
face hereof, a notice requesting such redemption in the form described below and
specifying the date upon which this Security is to be redeemed. Any notice given
by a Holder pursuant to this paragraph shall consist of either (i) this Security
with the form entitled "Option to Elect Redemption" set forth at the end of this
Security duly completed or (ii) a telegram, facsimile transmission or a letter
from a member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder hereof, the principal amount of this
Security, the principal amount of this Security to be redeemed, the certificate
number or a description of the terms of this Security, a statement that the
option to elect redemption is being exercised thereby and a guarantee that this
Security, together with the duly completed form entitled "Option to Elect
Redemption" below, will be received by the Trustee not later than the fifth
Business Day after the date of such telegram, facsimile transmission or letter;
provided, however, that such telegram, facsimile transmission or letter shall
only be effective if this Security and form duly completed are received by the
Trustee by such fifth Business Day. Exercise of the redemption option by the
Holder hereof will be irrevocable. If applicable, the "Redemption Price" for any
such redemption shall be determined by
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<PAGE>
multiplying the Redemption Percentage (Option of Holder) specified on the face
hereof with respect to the relevant Redemption Date (Option of Holder) (or range
of such dates) by the portion of the principal amount hereof (or, if this
Security is an Original Issue Discount Security, the portion of the Amortized
Face Amount hereof) to be redeemed; provided, however, that in no event shall
the Redemption Price be less than 100% of the portion of the principal amount
hereof (or, if this Security is an Original Issue Discount Security, the portion
of the Amortized Face Amount hereof) to be redeemed.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants, in
each case upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Security.
If an Event of Default with respect to the Securities of this series shall
occur and be continuing, the principal of the Securities of this series (or, in
the case of Original Issue Discount Securities, the Amortized Face Amount
thereof) 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 each series to be affected. The Indenture also contains
provisions permitting the Holders of a specified percentage 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 set forth in, and subject to, the provisions of the Indenture, no Holder
of any Security of this series will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to this series, the Holders of not less than 25% in
principal amount of the outstanding Securities of this series shall have made
written request, and offered reasonable indemnity to the Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in principal amount of the outstanding Securities of this
series a direction inconsistent with such request and the Trustee shall have
failed to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and premium (if any) or interest on
this Security 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 premium (if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and
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<PAGE>
premium (if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein set
forth, the Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same. In
the event of any redemption at the option of the Company, the Trustee shall not
be required to (i) issue, register the transfer of or exchange Securities of
this series during a period beginning at the open of business 15 days before the
day of the mailing of a notice of any redemption and ending at the close of
business on the day of such mailing, or (ii) register the transfer of or
exchange any Security so selected for redemption, except, in the case of any
redemption in part, the portion of any Security not to be redeemed. Following
the exercise of a redemption option by the Holder hereof, the Trustee shall not
be required to issue, register the transfer of or exchange that portion of this
Security with respect to which such option has been exercised.
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 Securities of this series may be issued in the form of one or more
Book-Entry Debt Securities to The Depository Trust Company as Depository for the
Securities of this series or its nominee and registered in the name of the
Depository or such nominee. If the face of this Security contains a legend
indicating that this Security is a Book-Entry Debt Security so registered, the
transfer and exchange hereof is subject to the additional limitations set forth
in such legend and in the Indenture.
Prior to due presentment of this 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 this Security is registered as the absolute owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
___________________________________
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
the within Security, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT.....Custodian.....
TEN ENT - as tenants by the entiretie (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors Act
of survivorship and not as ....................................
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
___________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
______________________________________________________________________________
______________________________________________________________________________
the within Security of ENSERCH CORPORATION and hereby does irrevocably
constitute and appoint
__________________________________________________________________Attorney to
transfer the said Security on the books of the within-named Corporation, with
full power of substitution in the premises.
Dated: ______________________________
Signature Guaranteed by:
15
<PAGE>
OPTION TO ELECT REDEMPTION
The undersigned hereby irrevocably requests and instructs ENSERCH Corporation to
redeem the within Security (or portion thereof specified below) pursuant to its
terms at the Redemption Price, to the undersigned at
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of the
undersigned)
______________________________________________________________________________
______________________________________________________________________________
If less than the entire principal amount of the within Security is to be
redeemed, specify the portion thereof which the Holder elects to have redeemed:
_____________________________________________________________________________;
and specify the denomination or denominations (which shall not be less than the
minimum authorized denomination) of the Securities to be issued to the Holder
for the portion of the within Security not being redeemed (in the absence of any
such specification, one such Security will be issued for the portion not being
redeemed):
______________________________________________________________________________
Dated:__________________ X_______________________________________________
NOTICE: The signature on this Option to Elect
Redemption must correspond with the name as
written upon the face of the within instrument in
every particular, without alteration or
enlargement or any change whatever.
16
<PAGE>
EXHIBIT 4.4
================================================================================
ENSERCH CORPORATION
TO
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
__________
INDENTURE
DATED AS OF FEBRUARY 15, 1992
SENIOR DEBT SECURITIES
================================================================================
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of February 15, 1992
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
(S) 310 (a)(1)............................................... 609
(a)(2)............................................... 609
(a)(3)............................................... Not Applicable
(a)(4)............................................... Not Applicable
(b).................................................. 608, 610
(S) 311 (a).................................................. 613
(b).................................................. 613
(S) 312 (a).................................................. 701, 702(a)
(b).................................................. 702(b)
(c).................................................. 702(c)
(S) 313 (a).................................................. 703(a)
(b).................................................. 703(a)
(c).................................................. 703(a)
(d).................................................. 703(b)
(S) 314 (a).................................................. 704
(a)(4)............................................... 101, 1004
(b).................................................. Not Applicable
(c)(1)............................................... 102
(c)(2)............................................... 102
(c)(3)............................................... Not Applicable
(d).................................................. Not Applicable
(e).................................................. 102
(S) 315 (a).................................................. 601
(b).................................................. 602
(c).................................................. 601
(d).................................................. 601
(e).................................................. 514
(S) 316 (a).................................................. 101
(a)(1)(A)............................................ 502, 512
(a)(1)(B)............................................ 513
(a)(2)............................................... Not Applicable
(b).................................................. 508
(c).................................................. 104(c)
(S) 317 (a)(1)............................................... 503
(a)(2)............................................... 504
(b).................................................. 1003
(S) 318 (a).................................................. 107
</TABLE>
- ------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
__________
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES................................................................... 1
RECITALS OF THE COMPANY................................................... 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions............................................. 1
Act.................................................................. 2
Affiliate; control................................................... 2
Authenticating Agent................................................. 2
Board of Directors................................................... 2
Board Resolution..................................................... 2
Book-Entry Security.................................................. 2
Business Day......................................................... 2
Commission........................................................... 2
Company.............................................................. 2
Company Request; Company Order....................................... 2
Corporate Trust Office............................................... 2
corporation.......................................................... 2
Defaulted Interest................................................... 3
Depository........................................................... 3
Discharged........................................................... 3
Event of Default..................................................... 3
Foreign Government Securities........................................ 3
Holder............................................................... 3
Indenture............................................................ 3
interest............................................................. 3
Interest Payment Date................................................ 3
Judgment Currency.................................................... 3
Maturity............................................................. 4
Officers' Certificate................................................ 4
Opinion of Counsel................................................... 4
Original Issue Discount Security..................................... 4
Outstanding.......................................................... 4
Paying Agent......................................................... 5
Person............................................................... 5
Place of Payment..................................................... 5
- ------------
NOTE: This table of contents shall not, for any purpose, be deemed to be
part of the Indenture.
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Predecessor Security................................................. 5
Redemption Date...................................................... 5
Redemption Price..................................................... 5
Regular Record Date.................................................. 5
Required Currency.................................................... 5
Securities........................................................... 5
Security Register.................................................... 5
Special Record Date.................................................. 5
Stated Maturity...................................................... 6
Subsidiary........................................................... 6
Trustee.............................................................. 6
Trust Indenture Act.................................................. 6
U.S. Government Securities........................................... 6
Vice President....................................................... 6
Voting Stock......................................................... 6
Section 102. Compliance Certificates and Opinions.................... 6
Section 103. Form of Documents Delivered to Trustee.................. 7
Section 104. Acts of Holders; Record Dates........................... 7
Section 105. Notices, Etc., to Trustee and Company................... 9
Section 106. Notice to Holders; Waiver............................... 10
Section 107. Conflict with Trust Indenture Act....................... 10
Section 108. Effect of Headings and Table of Contents................ 10
Section 109. Successors and Assigns.................................. 10
Section 110. Separability Clause..................................... 10
Section 111. Benefits of Indenture................................... 11
Section 112. Governing Law........................................... 11
Section 113. Legal Holidays.......................................... 11
Section 114. Currency Conversion..................................... 11
ARTICLE II
SECURITY FORMS
Section 201. Forms Generally......................................... 12
Section 202. Form of Trustee's Certificate of Authentication......... 12
Section 203. Form of Legend for Book-Entry Securities................ 13
ARTICLE III
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.................... 13
Section 302. Denominations........................................... 15
Section 303. Execution, Authentication, Delivery and Dating.......... 15
Section 304. Temporary Securities.................................... 17
</TABLE>
- ------------
NOTE: This table of contents shall not, for any purpose, be deemed to be
part of the Indenture.
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 305. Registration, Registration of Transfer and Exchange..... 17
Section 306. Mutilated, Destroyed, Lost and Stolen Securities........ 18
Section 307. Payment of Interest; Interest Rights Preserved.......... 19
Section 308. Persons Deemed Owners................................... 20
Section 309. Cancellation............................................ 20
Section 310. Computation of Interest................................. 21
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture................. 21
Section 402. Application of Trust Money.............................. 22
Section 403. Satisfaction, Discharge and Defeasance of Securities
of any Series........................................... 22
Section 404. Covenant Defeasance of Securities of any Series......... 23
Section 405. Reinstatement........................................... 24
ARTICLE V
REMEDIES
Section 501. Events of Default....................................... 25
Section 502. Acceleration of Maturity; Rescission and Annulment...... 26
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.............................................. 27
Section 504. Trustee May File Proofs of Claim........................ 28
Section 505. Trustee May Enforce Claims Without Possession of
Securities.............................................. 28
Section 506. Application of Money Collected.......................... 28
Section 507. Limitation on Suits..................................... 29
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.................................... 29
Section 509. Restoration of Rights and Remedies...................... 29
Section 510. Rights and Remedies Cumulative.......................... 30
Section 511. Delay or Omission Not Waiver............................ 30
Section 512. Control by Holders...................................... 30
Section 513. Waiver of Past Defaults................................. 30
Section 514. Undertaking for Costs................................... 31
Section 515. Waiver of Stay or Extension Laws........................ 31
ARTICLE VI
THE TRUSTEE
Section 601. Certain Duties and Responsibilities..................... 31
Section 602. Notice of Defaults...................................... 31
Section 603. Certain Rights of Trustee............................... 32
Section 604. Not Responsible for Recitals or Issuance of Securities.. 33
</TABLE>
- ------------
NOTE: This table of contents shall not, for any purpose, be deemed to be
part of the Indenture.
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 605. May Hold Securities..................................... 33
Section 606. Money Held in Trust..................................... 33
Section 607. Compensation and Reimbursement.......................... 33
Section 608. Disqualification; Conflicting Interests................. 34
Section 609. Corporate Trustee Required; Eligibility................. 34
Section 610. Resignation and Removal; Appointment of Successor....... 34
Section 611. Acceptance of Appointment by Successor.................. 36
Section 612. Merger, Conversion, Consolidation or Succession to
Business................................................ 37
Section 613. Preferential Collection of Claims Against Company....... 37
Section 614. Appointment of Authenticating Agent..................... 37
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders................................................. 39
Section 702. Preservation of Information; Communications to Holders.. 39
Section 703. Reports by Trustee...................................... 39
Section 704. Reports by Company...................................... 40
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms.... 40
Section 802. Successor Substituted................................... 40
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders...... 41
Section 902. Supplemental Indentures with Consent of Holders......... 42
Section 903. Execution of Supplemental Indentures.................... 43
Section 904. Effect of Supplemental Indentures....................... 43
Section 905. Conformity with Trust Indenture Act..................... 43
Section 906. Reference in Securities to Supplemental Indentures...... 43
ARTICLE X
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.............. 43
Section 1002. Maintenance of Office or Agency......................... 44
Section 1003. Money for Securities Payments to Be Held in Trust....... 44
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1004. Statement by Officers as to Default..................... 45
Section 1005. Existence............................................... 45
Section 1006. Limitation on Liens..................................... 45
Section 1007. Waiver of Certain Covenants............................. 47
ARTICLE XI
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article................................ 47
Section 1102. Election to Redeem; Notice to Trustee................... 48
Section 1103. Selection by Trustee of Securities to Be Redeemed....... 48
Section 1104. Notice of Redemption.................................... 48
Section 1105. Deposit of Redemption Price............................. 49
Section 1106. Securities Payable on Redemption Date................... 49
Section 1107. Securities Redeemed in Part............................. 50
ARTICLE XII
SINKING FUNDS
Section 1201. Applicability of Article................................ 50
Section 1202. Satisfaction of Sinking Fund Payments with Securities... 50
Section 1203. Redemption of Securities for Sinking Fund............... 51
TESTIMONIUM...............................................................
SIGNATURES AND SEALS......................................................
ACKNOWLEDGMENTS...........................................................
</TABLE>
- ------------
NOTE: This table of contents shall not, for any purpose, be deemed to be
part of the Indenture.
v
<PAGE>
INDENTURE, dated as of February 15, 1992, between ENSERCH Corporation,
a corporation duly organized and existing under the laws of the State of Texas
(herein called the "Company"), having its principal office at 300 South St.
Paul, Dallas, Texas 75201, and The First National Bank of Chicago, a national
banking association duly organized and existing under the laws of the United
States, as Trustee (herein called the "Trustee").
RECITALS 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"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
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 agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE I
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:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) 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.
<PAGE>
"Act", when used with respect to any Holder, 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 indirectly,
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 authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"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.
"Book-Entry Security" means a Security bearing the legend specified in
Section 203, evidencing all or part of the Securities of a series and registered
in the name of the Depository or its nominee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
to close.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument 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 its Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
The City of Chicago (or any other city designated by the Trustee) at which at
any particular time its corporate trust business shall be principally
administered.
"corporation" means corporations, associations, joint stock companies
and business trusts.
2
<PAGE>
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the clearing agency registered under the Securities Exchange Act of
1934, as amended, specified for that purpose as contemplated by Section 301.
"Discharged" has the meaning specified in Section 403.
"Event of Default" has the meaning specified in Section 501.
"Foreign Government Securities" as used in Section 403 means, with
respect to Securities of any series that are denominated in a currency other
than United States dollars, securities that are (i) direct obligations of the
government that issued such currency for the payment of which obligations its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of such government, the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by such government, which, in either case under clauses (i) or (ii),
are not callable or redeemable at the option of the issuer thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or 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.
The term "Indenture" shall also include the terms of particular series of
Securities established as contemplated by Section 301 provided, however, that,
if at any time more than one Person is acting as Trustee under this instrument
due to the appointment of one or more separate Trustees for any one or more
separate series of Securities pursuant to Section 610(e), "Indenture" shall
mean, with respect to such series of Securities for which any such Person is
Trustee, this instrument as originally executed or 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
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 114.
3
<PAGE>
"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 therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to or an employee of the Company.
"Original Issue 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 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) 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 that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as contemplated by
Section 114 and Section 301 on the date of original issuance of such Security,
of the principal amount (or, in the case of an Original Issue Discount Security,
the U.S. dollar equivalent on the date of original issuance of such Security of
the amount determined as provided in (i) above) of such Security, and (iii)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor 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,
4
<PAGE>
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. 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.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"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 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 114.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture provided, however, that if at any time there is more than
one Person acting as Trustee under this Indenture, "Securities" with respect to
the Indenture as to which such Person is Trustee shall have the meaning stated
in the first recital of this Indenture and shall more particularly mean
Securities authenticated and delivered under this Indenture, exclusive, however,
of Securities of any series as to which such Person is not Trustee .
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
5
<PAGE>
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
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.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed except as provided in
Section 905; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"U.S. Government Securities" as used in Section 403 means securities
that are (i) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case under clauses (i) or (ii) are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Security or a specific payment of interest on or
principal of any such U.S. Government Security held by such custodian for the
amount of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Security evidenced by such
depository receipt.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" means stock which 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.
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
6
<PAGE>
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 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 his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein
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and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
Without limiting the generality of the foregoing, a Holder, including a
Depository that is a Holder of a Book-Entry Security, may make, give or take, by
a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a Depository that is a
Holder of a Book-Entry Security may provide its proxy or proxies to the
beneficial owners of interest in any such Book-Entry Security.
(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. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as the record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, provided or permitted by this Indenture to be given or taken by Holders
of Securities of such series.
With regard to any record date set pursuant to this paragraph, the
Holders of Outstanding Securities of the relevant series on such record date (or
their duly appointed agents), and only such Persons, shall be entitled to give
or take relevant action, whether or not such Holders remain Holders after such
record date. With regard to any action that may be given or taken hereunder
only by Holders of a requisite principal amount of Outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set
pursuant to this paragraph, the Company may, at its option, set an expiration
date after which no such action purported to be given or taken by any Holder
shall be effective hereunder unless given or taken on or prior to such
expiration date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this paragraph, the Company
may, on one or more occasions at its option, extend such date to any later date.
Nothing in this paragraph shall prevent any Holder (or any duly appointed agent
thereof) from giving or taking, at any time, contrary to or different from, any
action given or taken, or purported to have been given or taken, hereunder by a
Holder on or prior to such date, in which event the Company may set a record
date in respect thereof pursuant to this paragraph. Notwithstanding the
foregoing or the Trust Indenture Act, the Company shall not set a record date
for, and the provisions of this paragraph shall not apply with respect to, any
action to be given or taken by Holders pursuant to Section 501, 502 or 512.
Upon receipt by the Trustee of any notice of default pursuant to
Section 501, any declaration of acceleration, or any rescission and annulment of
any such declaration, pursuant to Section 502 or of any direction with respect
in accordance with Section 512, any notice of default pursuant to
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Section 501, with respect to Securities of any series, a record date shall
automatically and without any other action by any Person be set for the purpose
of determining the Holders of Outstanding Securities of such series entitled to
join in such notice of default, declaration, or rescission and annulment or
direction of default, as the case may be, which record date shall be the close
of business on the day the Trustee receives such notice of default, declaration
or rescission and annulment or direction as the case may be. The Holders of
Outstanding Securities of such series on such record date (or their duly
appointed agent), and only such Persons, shall be entitled to join in such
notice of default, declaration, or rescission and annulment or direction as the
case may be, whether or not such Holders remain Holders after such record date;
provided that, unless such notice of default, declaration, or rescission and
annulment, as the case may be, shall have become effective by virtue of Holders
of the requisite principal amount of Outstanding Securities of such series on
such record date (or their duly appointed agents) having joined therein on or
prior to the 90th day after such record date, such notice of default,
declaration, or rescission and annulment or direction, as the case may be, shall
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall prevent a Holder (or a duly appointed
agent thereof) from giving, before or after the expiration of such 90-day
period, notice of default, a declaration of acceleration, or a rescission and
annulment or direction of any such notice of default, declaration, contrary to
or different from, or, after the expiration of such period, identical to, a
notice of default, declaration or rescission and annulment or direction, as the
case may be, that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date in respect thereof shall be set
pursuant to this paragraph.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security 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.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, 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,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office: One First National
Plaza, Suite 0126, Chicago, Illinois 60670 for U.S. mail, or One North
State Street, Ninth Floor, Chicago, Illinois 60602 for deliveries,
Attention: Corporate Trust Administration, or
(2) 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 mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument to the attention of the Treasurer or at
any other address previously furnished in writing to the Trustee by the
Company.
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Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address 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 any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in 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.
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Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and 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 TEXAS.
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 of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
Section 114. Currency Conversion.
Except as contemplated by Section 301 or as specifically provided in
Securities of a series, the Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of obtaining
judgment in any court, it is necessary to convert the sum due in respect of the
principal of, or premium or interest, if any, on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in the
City of New York the Required Currency with the Judgment Currency on the New
York Banking Day preceding that on which final unappealable judgment is given
and (b) its obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the actual receipt, by the payee,
of the full amount of the Required Currency expressed to be payable in respect
of such payments (ii) shall be enforceable as an alternative or additional cause
of action for the purpose of recovering in the Required Currency the amount, if
any, by which such actual receipt shall fall short of the full amount of the
Required Currency so expressed to be payable and (iii) shall not be affected by
judgment being obtained for any other sum due under this Indenture. For
purposes of the foregoing, "New York Banking Day" means any day except a
Saturday, Sunday or a legal holiday in the City of New York or a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to close.
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ARTICLE II
SECURITY FORMS
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form as
shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, 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 of Securities of
any series is established by action taken pursuant to a Board Resolution, a copy
of an appropriate record of such action shall be certified by the Secretary or
an Assistant Secretary of the Company and 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.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO,
as Trustee
By
____________________________
Authorized Officer
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Section 203. Form of Legend for Book-Entry Securities.
Any Book-Entry Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Security is
exchangeable for Securities registered in the name of a Person other
than the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Security (other
than a transfer of this Security as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository) may be registered
except in such limited circumstances."
ARTICLE III
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. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities and from
Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities
of the 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 the
series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than 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;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates
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on which any such interest shall be payable and the Regular Record Date for
any interest payable on any Interest Payment Date;
(6) the place or places where the principal of (and premium, if any)
and interest on Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of
America and, if other than as set forth in Section 114, the manner of
determining the equivalent thereof in the currency of the United States of
America for purposes of the definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to an index, the manner in which such amounts shall be determined;
(12) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(13) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Book-Entry Securities and, in such case,
the Depository or Depositories with respect to such Book-Entry Security or
Securities and the circumstances under which any such Book-Entry Security
may be registered for transfer or exchange, or authenticated and delivered,
in the name of a Person other than such Depository or its nominee, if other
than as set forth in Section 305;
(14) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
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(15) the exchange of Securities of the series, at the option of the
Holders thereof, for other Securities of the same series of the same
aggregate principal amount or of a different authorized kind or different
authorized denomination or denominations;
(16) any modification, amendment or addition to the covenants of the
Company set forth in Article VII or Article X of this Indenture with
respect to the Securities of the series;
(17) any Events of Default with respect to Securities of the series,
if not otherwise set forth herein; and
(18) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman, its President or one of its Vice Presidents and the Treasurer or an
Assistant Treasurer, under its corporate seal reproduced thereon. The signature
of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board
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Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
of general applicabili-ty relating to or affecting creditors' rights
and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will 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.
Notwithstanding the provisions of Section 301 or this Section 303, if
all Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
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 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. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, 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 of this Indenture.
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Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and 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.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee an office or agency to be maintained by the Company in accordance
with Section 1002 a register (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes 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 and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at 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 issued upon any registration of transfer or exchange of
Securities shall be the 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 or the Trustee) be duly
endorsed, or be accompanied by a written
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<PAGE>
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing.
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, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 301, any Book-Entry Security shall be exchangeable
pursuant to this Section 305 or Sections 304, 906 and 1107 for Securities
registered in the name of, and a transfer of a Book-Entry Security of any series
may be registered to, any Person other than the Depository for such Security or
its nominee only if (i) such Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Book-Entry Security or if
at any time such Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (ii) the Company executes and
delivers to the Trustee a Company Order that such Book-Entry Security shall be
so exchangeable and the transfer thereof so registerable or (iii) there shall
have occurred and be continuing an Event of Default with respect to the
Securities of such series. Upon the occurrence in respect of any Book-Entry
Security of any series of any one or more of the conditions specified in clauses
(i), (ii) or (iii) of the preceding sentence or such other conditions as may be
specified as contemplated by Section 301 for such series, such Book-Entry
Security may be exchanged for Securities registered in the names of, and the
transfer of such Book-Entry Security may be registered to, such Persons
(including Persons other than the Depository with respect to such series and its
nominees) as such Depository shall direct. Notwithstanding any other provision
of this Indenture, any Security authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Book-Entry Security shall
also be a Book-Entry Security and shall bear the legend specified in Section 203
except for any Security which is not a Book-Entry Security authenticated and
delivered in exchange for, or upon registration of transfer of, a Book-Entry
Security pursuant to the preceding sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be 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 has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such
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destroyed, lost or stolen Security, a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
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
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, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that 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.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, 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 relevant 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 (1) or (2) below:
(1) 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 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 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
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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 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 its address
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 and shall
no longer be payable pursuant to the following Clause (2).
(2) 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, 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 owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 307) any interest 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.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and, if not already canceled, shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. 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 Trustee shall be destroyed
unless otherwise directed by a Company Order.
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If the Company shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the
Trustee canceled or for cancellation.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities and substitution of mutilated, defaced, destroyed, lost
or stolen Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee canceled or for
cancellation; or
(B) the Company has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount of money in
the currency in which such Securities are payable sufficient to pay
and discharge the entire indebtedness on such Securities not therefore
delivered to the Trustee canceled or for cancellation, for principal
(and premium, if any) and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent
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under Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
Section 403. Satisfaction, Discharge and Defeasance of Securities of
any Series.
The Company shall be deemed to have been Discharged from its
obligations with respect to Securities of any series on the ninety-first day
after the applicable conditions set forth below have been satisfied:
(1)(A) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series (i) money in the currency in which such
Securities are payable in an amount, or (ii) U.S. Government Securities,
or, in the case of Securities denominated in a foreign currency, Foreign
Government Securities, which through the payment of interest and principal
in respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in the currency in
which such Securities are payable in an amount, or (iii) a combination of
(i) and (ii), sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of
principal (including mandatory sinking fund payments) of, and premium (not
relating to optional redemption), if any, and interest on, the Outstanding
Securities of such series on the dates such installments of principal of,
and premium (not relating to optional redemption), if any, or interest are
due; or
(B) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified to be applicable to the
Securities of such series;
(2) the Company shall have delivered to the Trustee an Opinion of
Counsel of a nationally recognized firm to the effect that holders of the
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of the Company's exercise of its
option under this Section 403 and will be subject to Federal income tax on
the same amount and in the same manner and at the same times as would have
been the case if such option had not been exercised, or a copy of a ruling
or other formal statement or action to that effect received from or
published by the Internal Revenue Service;
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(3) the Company has paid or caused to be paid all other sums payable
with respect to the Securities of such series at the time outstanding;
(4) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit, defeasance and
discharge under this Section 403 will not constitute, or is qualified as a
regulated investment company under the Investment Company Act of 1940;
(5) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(6) no Event of Default or event which, after notice or lapse of time
or both, would become an Event of Default shall have occurred and be
continuing on the date of such deposit; and
(7) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction, discharge and defeasance of the
entire indebtedness on all Securities of any such series at the time
outstanding have been complied with.
"Discharged" means, for purposes of this Section 403, that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by, and obligations under, the Securities of such series and to have satisfied
all the obligations under this Indenture relating to the Securities, of such
series (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except (i) rights of registration of
transfer and exchange, and the Company's right of optional redemption, if any,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities,
(iii) rights of holders of Securities to receive from the trust fund described
in Clause (1) above, payments of principal of, and premium (not relating to
optional redemption), if any, and interest on the Securities, and remaining
rights of the holders of Securities to receive mandatory sinking fund payments,
if any, (iv) the rights, obligations and immunities of the Trustee hereunder and
(v) the rights of the Holders of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them.
Section 404. Covenant Defeasance of Securities of any Series.
The Company shall cease to be under any obligation to comply with any
term, provision or condition set forth in Section 1006 with respect to
Securities of any series or any other term, provision or condition of any
covenant specified as contemplated by Section 301 with respect to Securities of
any series at any time after the applicable conditions set forth below have been
satisfied:
(1)(A) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, an dedicated solely to, the benefit of the Holders of the
Securities of such series (i) money in the currency in which such
Securities are payable in an amount, or (ii) U.S. Government Securities or,
in the case of Securities denominated in a foreign currency, Foreign
Government Securities, which through the payment of interest and principal
in respect thereof in accordance with their terms will provide, not later
than one day before the due
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date of any payment, money in the currency in which such Securities are
payable in an amount, or (iii) a combination of (i) and (ii), sufficient,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge each installment of principal (including
mandatory sinking fund payments) of, and premium (not relating to optional
redemption), if any, and interest on, the Outstanding Securities of such
series on the dates such installments of principal of, and premium (not
relating to optional redemption), if any, or interest are due; or
(B) the Company has properly fulfilled such other means of
defeasance as is specified to be applicable to the Securities of such
series;
(2) the Company has paid or caused to be paid all other sums payable
with respect to the Securities of such series at the time outstanding;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) no Event of Default or event which, after notice or lapse of time
or both, would become an Event of Default shall have occurred and be
continuing on the date of such deposit;
(5) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit, defeasance and
discharge under this Section 404 will not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940; and
(6) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the defeasance of the covenants referred to in
this Section 404 with respect to Securities of any such series at the time
outstanding have been complied with.
Notwithstanding the discharge and defeasance of any term, provision or condition
of the covenant set forth in Section 1006 of this Indenture with respect to a
series of Securities or any other term, provision or condition of any covenant
specified as contemplated by Section 301 with respect to Securities of any
series at the time outstanding all other obligations of the Company in this
Indenture including, without limitation, the Company's primary liability for the
payment of the principal (including mandatory sinking fund payments) of, and
premium, if any, and interest on all Securities of such series shall survive
until the payment of all such principal has been made.
Section 405. Reinstatement.
If the Trustee is unable to apply any money, U.S. Government
Securities or Foreign Government Securities in accordance with Section 403 or
404 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 403 or 404, as the
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case may be, until such time as the Trustee is permitted to apply all such
money, U.S. Government Securities or Foreign Government Securities in accordance
with Section 403 or 404, as the case may be.
ARTICLE V
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein, means with respect to any
particular series of Securities any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule regulation of any administrative
or governmental body), unless such event is either inapplicable to a particular
series or it is specifically deleted or modified in or pursuant to the Board
Resolution or supplemental indenture authorizing that series:
(a) default in the payment of any installment of interest upon any of
the Securities of that series when the same becomes due and payable, and
continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of (or premium, if any,
on) any of the Securities of that series at its Maturity by declaration or
otherwise; or
(c) default in the payment of any sinking or purchase fund payment or
analogous obligation when the same becomes due and payable by the terms of the
Securities of such series; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Securities of that series or in this Indenture for a period of 60 days after the
date on which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee by registered or
certified mail or to the Company and the Trustee by the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of such series.
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with respect
to Securities of any series other than that series) or under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company
(including this Indenture) whether such indebtedness now exists or shall
hereafter be created, which default shall constitute a failure to pay in excess
of $25 million principal amount of such indebtedness when due and payable after
the expiration of any applicable grace period with respect thereto or shall have
resulted in an excess of $25 million of principal amount of such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having been
discharged, or such acceleration having been rescinded or annulled, within a
period of 10 days after there shall have 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 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default and requiring the Company
to cause such indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder; or
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(f) the entry of an order for relief against the Company under the
Federal Bankruptcy Act by a court having jurisdiction in the premises or a
decree or order by a court having jurisdiction in the premises adjudging the
Company a bankrupt or insolvent under any other applicable Federal or State law,
or the entry of a decree or order approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company under the Federal Bankruptcy Code or any other applicable Federal or
State law, or appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(g) the consent by the Company to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
of consent seeking reorganization or relief under the Federal Bankruptcy Code or
any other applicable Federal or State law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other 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 taking of corporate action by the
Company in furtherance of any such action; or
(h) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security for
such series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms of
that series) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
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(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel related thereto;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest or mandatory
sinking fund payment on any Security when such interest or mandatory
sinking fund payment becomes due and payable and such default continues for
a period of 30 days, or
(2) default is made in the payment (other than any sinking fund
payment) of the principal of (or premium, if any, on) any Security at the
Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is 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.
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Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture 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 505. 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 of the Securities in respect of which such
judgment has been recovered.
Section 506. 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, upon presentation of the Securities 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
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities 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 (and premium, if
any) and interest, respectively.
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Section 507. Limitation on Suits.
No Holder of any Security of any series 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series 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;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
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 508. 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) any interest 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 509. 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 has been
discontinued or abandoned for any reason, or has 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, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
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Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
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 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any 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 that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. 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
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
IX 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 Event
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.
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Section 514. Undertaking for Costs.
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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
Section 515. 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 VI
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, 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. 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 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(d) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 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 with
respect to Securities of such series.
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Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
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 Officers' 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 of the Holders pursuant to this Indenture, unless
such Holders 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 be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(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
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any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Section 604. 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 the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
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
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. 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
otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to 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);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances 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 any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
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Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided, by and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being the successor trustee under the following
Indentures: the Indenture between the Company and Mellon National Bank and
Trust Company dated as of June 15, 1967, the Indenture between the Company and
Mellon National Bank and Trust Company dated as of December 15, 1968, the
Indenture between the Company and Mellon National Bank and Trust Company dated
as of December 1, 1971, the Indenture between the Company and Mellon Bank, N.A.
dated as of March 15, 1973, the Indenture between the Company and Mellon Bank,
N.A. dated as of March 15, 1974, the Indenture between the Company and Mellon
Bank, N.A. dated as of October 1, 1976, the Indenture between the Company and
Mellon Bank, N.A. dated as of November 15, 1977, the Indenture between the
Company and Mellon Bank, N.A. dated as of June 15, 1980, and the Indenture
between the Company and Mellon Bank, N.A. dated as of September 15, 1985,
respectively.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
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 Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the 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 610. 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 611.
(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 611 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:
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(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 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, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the 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, 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 611. 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 which has been 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 611, 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 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) 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
to all Holders of Securities of such series in the manner provided in Section
106. 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.
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Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, 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 its charges, 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 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 and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (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.
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Section 612. 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 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor) to the extent applicable.
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue 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 of America, any State 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.
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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 and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. 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, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is 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 in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By
_________________________________
As Authenticating Agent
By
__________________________________
Authorized Officer
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ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after January 1 and
July 1 in each year in such form as the Trustee may reasonably
require, a list for each series of Securities of the names and
addresses of the Holders of Securities of such series as of such date;
and
at such other times as the Trustee may request in writing, within 30 days after
the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) Within 60 days after the 15th day of February of each year
commencing with the later of February 15, 1993, or the first February 15th after
the first issuance of Securities, the Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
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Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person unless:
(1) 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 corporation organized and existing under the laws of
the United States of America, 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
on all the Securities and the performance of any covenant of the Indenture
on the part of the Company to be performed or observed;
(2) 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 happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture complys with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
Section 802. Successor Substituted.
Upon any consolidation by the Company with or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or 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.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, 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:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default in respect of the
Securities of any specific series or all series; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or if permitted by law, to provide
for the exchangeability of such Securities of the same series in fully
registered form, or to permit or facilitate the issuance of Securities in
uncertificated form; or
(5) to change or eliminate any of the provisions of this Indenture in
respect of one or more series of Securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any Security
of any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision nor (B) modify the rights of
the Holder of any such Security with respect to such provision or (ii)
shall become effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor 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 611(b); or
41
<PAGE>
(9) 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 provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, 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 of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) 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 any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment where, or the coin or currency 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 thereof (or, in the case of redemption, on
or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513,
Section 1006 or Section 1007 except to increase any such percentage or to
provide that certain 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 and
Section 1007, or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
42
<PAGE>
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.
Section 903. 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 601) 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 or immunities under this Indenture or otherwise.
Section 904. 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 to the extent provided therein.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal (and premium, if
any) and interest on the Securities of that series in accordance with the terms
of the Securities and this Indenture.
43
<PAGE>
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 1003. 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 any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) and interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, not later than the opening of business at each
Place of Payment for such series of Securities on each due date of the principal
of or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of Securities
other than 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 will (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay,
44
<PAGE>
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, 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 on any Security of any series 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 the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, 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.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Limitation on Liens.
Except as in this Section expressly permitted, so long as any of the
Securities of any series shall be outstanding, the Company will not at any time
directly or indirectly create, assume or suffer to exist, and will not cause,
suffer or permit any Subsidiary, as long as it remains a Subsidiary, directly or
indirectly to create, assume or suffer to exist, except in favor of the Company,
any mortgage, pledge or other lien or encumbrance of or upon any of its
properties or assets, real, personal or mixed (including stock and other
securities of Subsidiaries), whether owned at the date of this Indenture or
thereafter acquired, or of or upon any income or profits therefrom, without
making effective provision (and the Company covenants that in such case it will
make or cause to be made effective provision) whereby the Securities then
outstanding and any other indebtedness of the Company then entitled thereto
shall be secured by such mortgage, pledge, lien or encumbrance equally and
ratably with any and all other obligations and indebtedness thereby secured, so
long as any such other obligations or indebtedness shall be so secured.
<PAGE>
Nothing in this Indenture shall be construed to prevent the Company or
any Subsidiary, without so securing the Securities, from creating, assuming or
suffering to exist the following mortgages, pledges, liens or encumbrances, to
which the provisions of the preceding paragraph shall not be applicable:
(a) mortgages, pledges, liens or encumbrances upon any property
presently owned or hereafter acquired, created at the time of acquisition
to secure a portion of the purchase price thereof, or existing thereon at
the date of acquisition, whether or not assumed by the Company or a
Subsidiary, provided that every such mortgage, pledge, lien or encumbrance
shall apply only to the property so acquired and fixed improvements
thereon;
(b) any extension, renewal, or refunding of any mortgage, pledge,
lien or encumbrance permitted by subsection (a) above, if limited to the
same property subject to, and securing not more than the amount secured by,
the mortgage, pledge, lien or encumbrance extended, renewed or refunded;
(c) the pledge of current assets, in the ordinary course of business,
to secure current liabilities;
(d) mortgages or other liens upon (i) property, to secure obligations
to pay all or a part of the purchase price of such property only out of or
measured by the production, or the proceeds of such production, from such
property of oil or gas or products or by-products thereof, or (ii) the
production from property of oil or gas or products or by-products thereof,
or the proceeds of such production, to secure obligations to pay all or a
part of the expenses of exploration, drilling or development of such
property only out of such production or the proceeds of such production;
(e) mechanics' or materialmen's liens, good faith deposits in
connection with tenders, leases of real estate, bids or contracts (other
than contracts for the payment of money), deposits to secure public or
statutory obligations, deposits to secure, or in lieu of, surety, stay or
appeal bonds, and deposits as security for the payment of taxes or
assessments or similar charges, liens or security interests given in
connection with bid or completion bonds;
(f) any lien arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or any body created or
approved by law or governmental regulation for any purposes at any time as
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or license, or
to enable the Company or a Subsidiary to maintain self-insurance or to
participate in any funds established to cover any insurance risks in
connection with workmen's compensation, unemployment insurance, old age
pensions or other social security, or to share in the privileges or
benefits required for companies participating in such arrangements;
(g) the pledge or assignment of accounts receivable, including
customers' installment paper, to banks or others made in the ordinary
course of business (including to or by any Subsidiary which is principally
engaged in the business of financing the business of the Company and its
Subsidiaries);
46
<PAGE>
(h) the liens of taxes or assessments for the then current year or not
at the time due, or the liens of taxes or assessments already due but the
validity of which is being contested in good faith and against which an
adequate reserve has been established;
(i) any judgment or lien against the Company or a Subsidiary, so long
as the finality of such judgment is being contested and the execution
thereon is stayed;
(j) assessments or similar encumbrances, the existence of which does
not impair the use of the property subject thereto for the purposes for
which it was acquired;
(k) landlords' liens on fixtures and movable property located on
premises leased by the Company or a Subsidiary in the ordinary course of
business so long as the rent secured thereby is not in default; and
(l) liens on the assets of any limited liability company organized
under a limited liability company act of any state in which a limited
liability company is treated as a partnership for federal income tax
purposes.
Section 1007. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1006 with respect to the
Securities of any series or any other covenant provided with respect to
Securities of any series as specified as contemplated by Section 301 (unless
otherwise provided by the terms of such series), if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but 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.
ARTICLE XI
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
47
<PAGE>
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, 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 that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, 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 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
48
<PAGE>
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price 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,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Not later than the opening of business at each Place of Payment on any
Redemption Date for such series of Securities, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities 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 the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
49
<PAGE>
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
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), and 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 of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE XII
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited.
Such Securities 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 sinking fund payment shall
be reduced accordingly.
50
<PAGE>
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 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 1103 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 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
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.
51
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
ENSERCH CORPORATION
By__________________________________________
Name: W. C. McCord
Title: Chairman
Attest:
- -------------------------------------------
Name: M. G. Fortado
Title: Corporate Secretary
THE FIRST NATIONAL BANK OF
CHICAGO
By__________________________________________
Name:
Title:
Attest:
- -------------------------------------------
Name:
Title:
<PAGE>
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
Before me, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared W. C. McCord, Chairman of
ENSERCH Corporation, a corporation, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he executed
the same for the purposes and consideration therein expressed, in the capacity
therein stated, and as the act and deed of said corporation.
Given under my hand and seal of office, this 10th day of March, 1992.
[SEAL]
---------------------------------------
Notary Public in and for
Dallas County, Texas
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the ____ day of __________________, 199 , before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he is _______________________ of The First National Bank of Chicago,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
[SEAL]
-------------------------------------
Notary Public
<PAGE>
EXHIBIT 4.5
==============================================================================
ENSERCH CORPORATION
TO
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
__________
INDENTURE
DATED AS OF FEBRUARY ____, 1994
SUBORDINATED DEBT SECURITIES
==============================================================================
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of February _____, 1994
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
(S) 310(a)(1).............................. 609
(a)(2).............................. 609
(a)(3).............................. Not Applicable
(a)(4).............................. Not Applicable
(b)................................. 608, 610
(S) 311(a)................................. 613
(b)................................. 613
(S) 312(a)................................. 701, 702(a)
(b)................................. 702(b)
(c)................................. 702(c)
(S) 313(a)................................. 703(a)
(b)................................. 703(a)
(c)................................. 703(a)
(d)................................. 703(b)
(S) 314(a)................................. 704
(a)(4).............................. 101, 1004
(b)................................. Not Applicable
(c)(1).............................. 102
(c)(2).............................. 102
(c)(3).............................. Not Applicable
(d)................................. Not Applicable
(e)................................. 102
(S) 315(a)................................. 601
(b)................................. 602
(c)................................. 601
(d)................................. 601
(e)................................. 514
(S) 316(a)................................. 101
(a)(1)(A)........................... 502, 512
(a)(1)(B)........................... 513
(a)(2).............................. Not Applicable
(b)................................. 508
(c)................................. 104(c)
(S) 317(a)(1).............................. 503
(a)(2).............................. 504
(b)................................. 1003
(S) 318(a)................................. 107
</TABLE>
<PAGE>
TABLE OF CONTENTS
__________
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PARTIES............................................................ 1
RECITALS OF THE COMPANY............................................ 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions....................................... 1
Act........................................................... 2
Affiliate; control............................................ 2
Authenticating Agent.......................................... 2
Board of Directors............................................ 2
Board Resolution.............................................. 2
Book-Entry Security........................................... 2
Business Day.................................................. 2
Commission.................................................... 2
Company....................................................... 2
Common Stock.................................................. 2
Company Request; Company Order................................ 3
Conversion Price.............................................. 3
Corporate Trust Office........................................ 3
corporation................................................... 3
Defaulted Interest............................................ 3
Depository.................................................... 3
Discharged.................................................... 3
Event of Default.............................................. 3
Foreign Government Securities................................. 3
Holder........................................................ 3
Indenture..................................................... 3
interest...................................................... 4
Interest Payment Date......................................... 4
Judgment Currency............................................. 4
Maturity...................................................... 4
Officers' Certificate......................................... 4
Opinion of Counsel............................................ 4
Original Issue Discount Security.............................. 4
Outstanding................................................... 4
Paying Agent.................................................. 5
Person........................................................ 5
Place of Payment.............................................. 5
Predecessor Security.......................................... 5
Redemption Date............................................... 5
Redemption Price.............................................. 5
Regular Record Date........................................... 5
Required Currency............................................. 6
Securities.................................................... 6
Security Register............................................. 6
Senior Indebtedness........................................... 6
Special Record Date........................................... 6
Stated Maturity............................................... 6
Subsidiary.................................................... 6
Trustee....................................................... 6
Trust Indenture Act........................................... 6
U.S. Government Securities.................................... 7
Vice President................................................ 7
Voting Stock.................................................. 7
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Section 102. Compliance Certificates and Opinions............. 7
Section 103. Form of Documents Delivered to Trustee........... 8
Section 104. Acts of Holders; Record Dates.................... 8
Section 105. Notices, Etc., to Trustee and Company............ 10
Section 106. Notice to Holders; Waiver........................ 10
Section 107. Conflict with Trust Indenture Act................ 11
Section 108. Effect of Headings and Table of Contents......... 11
Section 109. Successors and Assigns........................... 11
Section 110. Separability Clause.............................. 11
Section 111. Benefits of Indenture............................ 11
Section 112. Governing Law.................................... 11
Section 113. Legal Holidays................................... 11
Section 114. Currency Conversion.............................. 12
ARTICLE II
SECURITY FORMS
Section 201. Forms Generally.................................. 12
Section 202. Form of Trustee's Certificate of Authentication.. 13
Section 203. Form of Legend for Book-Entry Securities......... 13
ARTICLE III
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.............. 13
Section 302. Denominations..................................... 16
Section 303. Execution, Authentication, Delivery and Dating.... 16
Section 304. Temporary Securities.............................. 17
Section 305. Registration, Registration of Transfer and
Exchange.......................................... 18
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.. 19
Section 307. Payment of Interest; Interest Rights Preserved.... 20
Section 308. Persons Deemed Owners............................. 21
Section 309. Cancellation...................................... 21
Section 310. Computation of Interest........................... 21
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture........... 22
Section 402. Application of Trust Money........................ 23
Section 403. Satisfaction, Discharge and Defeasance of
Securities of any Series.......................... 23
Section 404. Covenant Defeasance of Securities of any Series... 24
Section 405. Reinstatement..................................... 25
ARTICLE V
REMEDIES
Section 501. Events of Default................................. 26
Section 502. Acceleration of Maturity; Rescission and
Annulment......................................... 27
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................ 28
Section 504. Trustee May File Proofs of Claim.................. 28
Section 505. Trustee May Enforce Claims Without Possession of
Securities........................................ 29
Section 506. Application of Money Collected.................... 29
Section 507. Limitation on Suits............................... 29
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest................... 30
</TABLE>
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<TABLE>
<S> <C> <C>
Section 509. Restoration of Rights and Remedies................ 30
Section 510. Rights and Remedies Cumulative.................... 30
Section 511. Delay or Omission Not Waiver...................... 30
Section 512. Control by Holders................................ 31
Section 513. Waiver of Past Defaults........................... 31
Section 514. Undertaking for Costs............................. 31
Section 515. Waiver of Stay or Extension Laws.................. 31
ARTICLE VI
THE TRUSTEE
Section 601. Certain Duties and Responsibilities............... 32
Section 602. Notice of Defaults................................ 32
Section 603. Certain Rights of Trustee......................... 32
Section 604. Not Responsible for Recitals or Issuance of
Securities........................................ 33
Section 605. May Hold Securities............................... 34
Section 606. Money Held in Trust............................... 34
Section 607. Compensation and Reimbursement.................... 34
Section 608. Disqualification; Conflicting Interests........... 35
Section 609. Corporate Trustee Required; Eligibility........... 35
Section 610. Resignation and Removal; Appointment of Successor. 35
Section 611. Acceptance of Appointment by Successor............ 36
Section 612. Merger, Conversion, Consolidation or Succession
to Business....................................... 37
Section 613. Preferential Collection of Claims Against Company. 37
Section 614. Appointment of Authenticating Agent............... 38
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses
of Holders........................................ 39
Section 702. Preservation of Information; Communications to
Holders........................................... 39
Section 703. Reports by Trustee................................ 40
Section 704. Reports by Company................................ 40
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain
Terms............................................. 40
Section 802. Successor Substituted............................. 41
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders 41
Section 902. Supplemental Indentures with Consent of Holders... 42
Section 903. Execution of Supplemental Indentures.............. 43
Section 904. Effect of Supplemental Indentures................. 44
Section 905. Conformity with Trust Indenture Act............... 44
Section 906. Reference in Securities to Supplemental Indentures 44
ARTICLE X
COVENANTS
Section 1001. Payment of Principal, Premium and Interest........ 44
Section 1002. Maintenance of Office or Agency................... 44
Section 1003. Money for Securities Payments to Be Held in Trust. 45
Section 1004. Statement by Officers as to Default............... 46
</TABLE>
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<TABLE>
<S> <C> <C>
Section 1005. Existence......................................... 46
Section 1006. Waiver of Certain Covenants....................... 46
ARTICLE XI
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.......................... 46
Section 1102. Election to Redeem; Notice to Trustee............. 47
Section 1103. Selection by Trustee of Securities to Be Redeemed 47
Section 1104. Notice of Redemption.............................. 48
Section 1105. Deposit of Redemption Price....................... 48
Section 1106. Securities Payable on Redemption Date............. 49
Section 1107. Securities Redeemed in Part....................... 49
ARTICLE XII
SINKING FUNDS
Section 1201. Applicability of Article.......................... 49
Section 1202. Satisfaction of Sinking Fund Payments with
Securities........................................ 50
Section 1203. Redemption of Securities for Sinking Fund......... 50
ARTICLE XIII
CONVERSION OF SECURITIES
Section 1301. Applicability; Conversion Privilege and Conversion
Price............................................. 50
Section 1302. Exercise of Conversion Privilege.................. 51
Section 1303. Fractions of Shares............................... 51
Section 1304. Adjustment of Conversion Price.................... 52
Section 1305. Notice of Adjustments of Conversion Price......... 54
Section 1306. Notice of Certain Corporate Action................ 54
Section 1307. Company to Reserve Common Stock................... 55
Section 1308. Taxes on Conversion............................... 55
Section 1309. Covenant as to Common Stock....................... 56
Section 1310. Cancellation of Converted Securities.............. 56
Section 1311. Provisions in Case of Consolidation, Merger or
Sale of Assets.................................... 56
ARTICLE XIV
SUBORDINATION OF SECURITIES
Section 1401. Securities Subordinate to Senior Indebtedness..... 57
Section 1402. Payment over of Proceeds of Securities on
Dissolution, etc.................................. 57
Section 1403. Priority of Senior Indebtedness upon Maturity..... 59
Section 1404. Obligation of Company to pay Holders of
Securities not Affected........................... 59
Section 1405. Trustee as Holder of Senior Indebtedness.......... 60
Section 1406. Notice to Trustee to Effectuate Subordination..... 60
Section 1407. Modification, Extension, etc. of Senior
Indebtedness...................................... 60
Section 1408. Trustee has no Fiduciary Duty to Holders of Senior
Indebtedness...................................... 60
Section 1409. Paying Agents other than the Trustee.............. 61
Section 1410. Rights of Holders of Senior Indebtedness Not
Impaired.......................................... 61
Section 1411. All Indenture Provisions Subject to Subordination
Provisions........................................ 61
TESTIMONIUM.......................................................
SIGNATURES AND SEALS..............................................
ACKNOWLEDGMENTS...................................................
</TABLE>
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<PAGE>
INDENTURE, dated as of February _____, 1994, between ENSERCH
Corporation, a corporation duly organized and existing under the laws of the
State of Texas (herein called the "Company"), having its principal office at 300
South St. Paul, Dallas, Texas 75201, and The First National Bank of Chicago, a
national banking association duly organized and existing under the laws of the
United States, as Trustee (herein called the "Trustee").
RECITALS 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"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
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 agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE I
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:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) 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.
"Act", when used with respect to any Holder, 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 indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
<PAGE>
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"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.
"Book-Entry Security" means a Security bearing the legend specified in
Section 203, evidencing all or part of the Securities of a series and registered
in the name of the Depository or its nominee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
to close.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Common Stock" includes any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Section 1311, shares issuable on conversion of Securities of a
series shall include only shares of the class designated as Common Stock of the
Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Conversion Price" has the meaning specified in Section 1301.
"Corporate Trust Office" means the principal office of the Trustee in
The City of Chicago at which at any particular time its corporate trust business
shall be principally administered.
2
<PAGE>
"corporation" means corporations, associations, joint stock companies
and business trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the clearing agency registered under the Securities Exchange Act of
1934, as amended, specified for that purpose as contemplated by Section 301.
"Discharged" has the meaning specified in Section 403.
"Event of Default" has the meaning specified in Section 501.
"Foreign Government Securities" as used in Section 403 means, with
respect to Securities of any series that are denominated in a currency other
than United States dollars, securities that are (i) direct obligations of the
government that issued such currency for the payment of which obligations its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of such government, the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by such government, which, in either case under clauses (i) or (ii),
are not callable or redeemable at the option of the issuer thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or 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.
The term "Indenture" shall also include the terms of particular series of
Securities established as contemplated by Section 301, provided, however, that,
-------- -------
if at any time more than one Person is acting as Trustee under this instrument
due to the appointment of one or more separate Trustees for any one or more
separate series of Securities pursuant to Section 610(e), "Indenture" shall
mean, with respect to such series of Securities for which any such Person is
Trustee, this instrument as originally executed or 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
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 114.
"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 therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
3
<PAGE>
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to or an employee of the Company and who shall be acceptable to the
Trustee.
"Original Issue 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 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) 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 that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as contemplated by
Section 114 and Section 301 on the date of original issuance of such Security,
of the principal amount (or, in the case of an Original Issue Discount Security,
the U.S. dollar equivalent on the date of original issuance of such Security of
the amount determined as provided in (i) above) of such Security, and (iii)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor 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, only Securities which the Trustee knows to
be so owned shall be so disregarded. 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
4
<PAGE>
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"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 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 114.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture, provided, however, that if at any time there is more than
one Person acting as Trustee under this Indenture, "Securities" with respect to
the Indenture as to which such Person is Trustee shall have the meaning stated
in the first recital of this Indenture and shall more particularly mean
Securities authenticated and delivered under this Indenture, exclusive, however,
of Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" of the Company means the principal of and
premium, if any, and interest on the indebtedness (other than the Securities) of
the Company, whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed or guaranteed, (a) for money borrowed from or
guaranteed to others, (b) under promissory notes or debentures, bonds or other
instruments of indebtedness issued under the provisions of or pursuant to an
indenture, agreement, or similar instrument, or (c) for the payment of money
relating to the lease of any property which lease may be capitalized on the
consolidated balance sheet of the Company and its Subsidiaries in accordance
with generally accepted accounting principles as in effect from time to time
and, in each such case, all renewals, extensions,
5
<PAGE>
refundings, amendments or modifications thereof, except for the Corporation's
6-3/8% Convertible Subordinated Debentures due 2002; unless, by the terms of the
instrument creating or evidencing the indebtedness it is provided that such
indebtedness is not superior in right of payment to the Securities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
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.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed except as provided in
Section 905; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"U.S. Government Securities" as used in Section 403 means securities
that are (i) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case under clauses (i) or (ii) are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Security or a specific payment of interest on or
principal of any such U.S. Government Security held by such custodian for the
amount of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Security evidenced by such
depository receipt.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" means stock which 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.
6
<PAGE>
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 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 his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
7
<PAGE>
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
Without limiting the generality of the foregoing, a Holder, including a
Depository that is a Holder of a Book-Entry Security, may make, give or take, by
a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a Depository that is a
Holder of a Book-Entry Security may provide its proxy or proxies to the
beneficial owners of interest in any such Book-Entry Security.
(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. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as the record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, provided or permitted by this Indenture to be given or taken by Holders
of Securities of such series.
With regard to any record date set pursuant to this paragraph, the
Holders of Outstanding Securities of the relevant series on such record date (or
their duly appointed agents), and only such Persons, shall be entitled to give
or take relevant action, whether or not such Holders remain Holders after such
record date. With regard to any action that may be given or taken hereunder
only by Holders of a requisite principal amount of Outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set
pursuant to this paragraph, the Company may, at its option, set an expiration
date after which no such action purported to be given or taken by any Holder
shall be effective hereunder unless given or taken on or prior to such
expiration date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this paragraph, the Company
may, on one or more occasions at its option, extend such date to any later date.
Nothing in this paragraph shall prevent any Holder (or any duly appointed agent
thereof) from giving or taking, at any time, contrary to or different from, any
action given or taken, or purported to have been given or taken, hereunder by a
Holder on or prior to such date, in which event the Company may set a record
date in respect thereof pursuant
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to this paragraph. Notwithstanding the foregoing or the Trust Indenture Act,
the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any action to be given or taken by
Holders pursuant to Section 501, 502 or 512.
Upon receipt by the Trustee of any notice of default pursuant to
Section 501, any declaration of acceleration, or any rescission and annulment of
any such declaration, pursuant to Section 502 or of any direction with respect
in accordance with Section 512, any notice of default pursuant to Section 501,
with respect to Securities of any series, a record date shall automatically and
without any other action by any Person be set for the purpose of determining the
Holders of Outstanding Securities of such series entitled to join in such notice
of default, declaration, or rescission and annulment or direction of default, as
the case may be, which record date shall be the close of business on the day the
Trustee receives such notice of default, declaration or rescission and annulment
or direction as the case may be. The Holders of Outstanding Securities of such
series on such record date (or their duly appointed agent), and only such
Persons, shall be entitled to join in such notice of default, declaration, or
rescission and annulment or direction as the case may be, whether or not such
Holders remain Holders after such record date; provided that, unless such notice
of default, declaration, or rescission and annulment, as the case may be, shall
have become effective by virtue of Holders of the requisite principal amount of
Outstanding Securities of such series on such record date (or their duly
appointed agents) having joined therein on or prior to the 90th day after such
record date, such notice of default, declaration, or rescission and annulment or
direction, as the case may be, shall automatically and without any action by any
Person be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder (or a duly appointed agent thereof) from giving, before or
after the expiration of such 90-day period, notice of default, a declaration of
acceleration, or a rescission and annulment or direction of any such notice of
default, declaration, contrary to or different from, or, after the expiration of
such period, identical to, a notice of default, declaration or rescission and
annulment or direction, as the case may be, that has been canceled pursuant to
the proviso to the preceding sentence, in which event a new record date in
respect thereof shall be set pursuant to this paragraph.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security 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.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, 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,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office: One First National
Plaza, Suite 0126, Chicago, Illinois 60670 for U.S. mail, or One North
State Street, Ninth Floor, Chicago, Illinois 60602 for deliveries,
Attention: Corporate Trust Administration, or
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(2) 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 mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument to the attention of the Treasurer or at
any other address previously furnished in writing to the Trustee by the
Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address 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 any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in 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.
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Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness 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 TEXAS.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or, if applicable, the last date on which a Holder has
the right to convert its Securities 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 of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) or conversion of such
Securities 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 as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, or on the last day for such conversion, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
Section 114. Currency Conversion.
Except as contemplated by Section 301 or as specifically provided in
Securities of a series, the Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of obtaining
judgment in any court, it is necessary to convert the sum due in respect of the
principal of, or premium or interest, if any, on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in the
City of New York the Required Currency with the Judgment Currency on the New
York Banking Day preceding that on which final unappealable judgment is given
and (b) its obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the actual receipt, by the payee,
of the full amount of the Required Currency expressed to be payable in respect
of such payments (ii) shall be enforceable as an alternative or additional cause
of action for the purpose of recovering in the Required Currency the amount, if
any, by which such actual receipt shall fall short of the full amount of the
Required Currency so expressed to be payable and (iii) shall not be affected by
judgment being obtained for any other sum due under this Indenture. For
purposes of the foregoing, "New York Banking Day" means any day except a
Saturday, Sunday or a legal holiday in the City of New York or a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to close.
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ARTICLE II
SECURITY FORMS
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form as
shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, 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 of Securities of
any series is established by action taken pursuant to a Board Resolution, a copy
of an appropriate record of such action shall be certified by the Secretary or
an Assistant Secretary of the Company and 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.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By _____________________________
Authorized Officer
Section 203. Form of Legend for Book-Entry Securities.
Any Book-Entry Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Security is
exchangeable for Securities registered in the name of a Person other
than the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Security (other
than a transfer of this Security as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository) may be registered
except in such limited circumstances."
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ARTICLE III
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. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities and from
Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities
of the 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 the
series pursuant to Section 304, 305, 306, 906, 1107 or 1302 and except for
any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than 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;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any interest payable on any
Interest Payment Date;
(6) the place or places where the principal of (and premium, if any)
and interest on Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
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(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of
America and, if other than as set forth in Section 114, the manner of
determining the equivalent thereof in the currency of the United States of
America for purposes of the definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to an index, the manner in which such amounts shall be determined;
(12) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(13) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Book-Entry Securities and, in such case,
the Depository or Depositories with respect to such Book-Entry Security or
Securities and the circumstances under which any such Book-Entry Security
may be registered for transfer or exchange, or authenticated and delivered,
in the name of a Person other than such Depository or its nominee, if other
than as set forth in Section 305;
(14) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(15) the exchange of Securities of the series, at the option of the
Holders thereof, for other Securities of the same series of the same
aggregate principal amount or of a different authorized kind or different
authorized denomination or denominations;
(16) whether the Securities will be convertible into or exchangeable
for Common Stock or any other shares of the capital stock or securities of
the Company or any other Person and, if so, the terms and conditions upon
which such conversion will be effected including the initial conversion
price or rate, the conversion period and other provisions in addition to or
in lieu of those described herein;
(17) any modification, amendment or addition to the covenants of the
Company set forth in Article VII or Article X of this Indenture with
respect to the Securities of the series;
(18) any Events of Default with respect to Securities of the series,
if not otherwise set forth herein; and
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(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities of each series shall be subordinated in right of
payment to Senior Indebtedness as provided in Article XIV.
Section 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman, its President or one of its Vice Presidents, and the Treasurer or an
Assistant Treasurer, under its corporate seal reproduced thereon. The signature
of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
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(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
of general applica-bility relating to or affecting creditors' rights
and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will 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.
Notwithstanding the provisions of Section 301 or this Section 303, if
all Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
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 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. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never 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 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 of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and 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.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
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delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee an office or agency to be maintained by the Company in accordance
with Section 1002 a register (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes 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 and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at 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 issued upon any registration of transfer or exchange of
Securities shall be the 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 or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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, 906, 1107 or 1302 not involving any transfer.
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The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 301, any Book-Entry Security shall be exchangeable
pursuant to this Section 305 or Sections 304, 906 and 1107 for Securities
registered in the name of, and a transfer of a Book-Entry Security of any series
may be registered to, any Person other than the Depository for such Security or
its nominee only if (i) such Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Book-Entry Security or if
at any time such Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (ii) the Company executes and
delivers to the Trustee a Company Order that such Book-Entry Security shall be
so exchangeable and the transfer thereof so registerable or (iii) there shall
have occurred and be continuing an Event of Default with respect to the
Securities of such series. Upon the occurrence in respect of any Book-Entry
Security of any series of any one or more of the conditions specified in clauses
(i), (ii) or (iii) of the preceding sentence or such other conditions as may be
specified as contemplated by Section 301 for such series, such Book-Entry
Security may be exchanged for Securities registered in the names of, and the
transfer of such Book-Entry Security may be registered to, such Persons
(including Persons other than the Depository with respect to such series and its
nominees) as such Depository shall direct. Notwithstanding any other provision
of this Indenture, any Security authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Book-Entry Security shall
also be a Book-Entry Security and shall bear the legend specified in Section 203
except for any Security which is not a Book-Entry Security authenticated and
delivered in exchange for, or upon registration of transfer of, a Book-Entry
Security pursuant to the preceding sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be 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 has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
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
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governmental charge that may be imposed in relation thereto and any other
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, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that 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.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, 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 relevant 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 (1) or (2) below:
(1) 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 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 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 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 its address 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
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close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) 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, 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.
In the case of any Security of any series which is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment Date
(other than any Security of a series whose Maturity is prior to such Interest
Payment Date), interest whose Stated Maturity is on such Interest Payment Date
shall be payable on such Interest Payment Date notwithstanding such conversion,
and such interest (whether or not punctually paid or duly provided for) 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 such Regular Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Security of any series which is converted, interest whose Stated
Maturity is after the date of conversion of such Security shall not be payable.
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 owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 307) any interest 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.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and, if not already canceled, shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. 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 Trustee shall be destroyed
unless otherwise directed by a Company Order.
If the Company shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the
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indebtedness represented by such Securities unless and until the same are
delivered to the Trustee canceled or for cancellation.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, if any, registration of
transfer or exchange of Securities and substitution of mutilated, defaced,
destroyed, lost or stolen Securities herein expressly provided for), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee canceled or for
cancellation; or
(B) the Company has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount of money in
the currency in which such Securities are payable sufficient to pay
and discharge the entire indebtedness on such Securities not therefore
delivered to the Trustee canceled or for cancellation, for principal
(and premium, if any) and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
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Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
Section 403. Satisfaction, Discharge and Defeasance of Securities of
any Series.
The Company shall be deemed to have been Discharged from its
obligations with respect to Securities of any series on the ninety-first day
after the applicable conditions set forth below have been satisfied:
(1)(A) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series (i) money in the currency in which such
Securities are payable in an amount, or (ii) U.S. Government Securities,
or, in the case of Securities denominated in a foreign currency, Foreign
Government Securities, which through the payment of interest and principal
in respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in the currency in
which such Securities are payable in an amount, or (iii) a combination of
(i) and (ii), sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of
principal (including mandatory sinking fund payments) of, and premium (not
relating to optional redemption), if any, and interest on, the Outstanding
Securities of such series on the dates such installments of principal of,
and premium (not relating to optional redemption), if any, or interest are
due; or
(B) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified to be applicable to the
Securities of such series;
(2) the Company shall have delivered to the Trustee an Opinion of
Counsel of a nationally recognized firm to the effect that holders of the
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of the Company's exercise of its
option under this Section 403 and will be subject to Federal income tax on
the same amount and in the same manner and at the same times as would have
been the case if such option had not been exercised, or a copy of a ruling
or other formal statement or action to that effect received from or
published by the Internal Revenue Service;
(3) the Company has paid or caused to be paid all other sums payable
with respect to the Securities of such series at the time outstanding;
(4) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit, defeasance and
discharge under this Section 403 will not constitute, or is qualified as a
regulated investment company under the Investment Company Act of 1940;
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(5) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(6) no Event of Default or event which, after notice or lapse of time
or both, would become an Event of Default shall have occurred and be
continuing on the date of such deposit; and
(7) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction, discharge and defeasance of the
entire indebtedness on all Securities of any such series at the time
outstanding have been complied with.
"Discharged" means, for purposes of this Section 403, that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by, and obligations under, the Securities of such series and to have satisfied
all the obligations under this Indenture relating to the Securities, of such
series (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except (i) rights of registration of
transfer and exchange, and the Company's right of optional redemption, if any,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities,
(iii) rights of holders of Securities to receive from the trust fund described
in Clause (1) above, payments of principal of, and premium (not relating to
optional redemption), if any, and interest on the Securities, and remaining
rights of the holders of Securities to receive mandatory sinking fund payments,
if any, (iv) the rights, obligations and immunities of the Trustee hereunder and
(v) the rights of the Holders of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them.
Section 404. Covenant Defeasance of Securities of any Series.
The Company shall cease to be under any obligation to comply with any
term, provision or condition of any covenant specified as contemplated by
Section 301 with respect to Securities of any series at any time after the
applicable conditions set forth below have been satisfied:
(1)(A) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, an dedicated solely to, the benefit of the Holders of the
Securities of such series (i) money in the currency in which such
Securities are payable in an amount, or (ii) U.S. Government Securities or,
in the case of Securities denominated in a foreign currency, Foreign
Government Securities, which through the payment of interest and principal
in respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in the currency in
which such Securities are payable in an amount, or (iii) a combination of
(i) and (ii), sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of
principal (including mandatory sinking fund payments) of, and premium (not
relating to optional redemption), if any, and interest on, the Outstanding
Securities of such series on the dates such installments of principal of,
and premium (not relating to optional redemption), if any, or interest are
due; or
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(B) the Company has properly fulfilled such other means of
defeasance as is specified to be applicable to the Securities of such
series;
(2) the Company has paid or caused to be paid all other sums payable
with respect to the Securities of such series at the time outstanding;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) no Event of Default or event which, after notice or lapse of time
or both, would become an Event of Default shall have occurred and be
continuing on the date of such deposit;
(5) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit, defeasance and
discharge under this Section 404 will not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940; and
(6) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the defeasance of the covenants referred to in
this Section 404 with respect to Securities of any such series at the time
outstanding have been complied with.
Notwithstanding the discharge and defeasance of any term, provision or condition
of any term, provision or condition of any covenant specified as contemplated by
Section 301 with respect to Securities of any series at the time outstanding all
other obligations of the Company in this Indenture including, without
limitation, the Company's primary liability for the payment of the principal
(including mandatory sinking fund payments) of, and premium, if any, and
interest on all Securities of such series shall survive until the payment of all
such principal has been made.
Section 405. Reinstatement.
If the Trustee is unable to apply any money, U.S. Government
Securities or Foreign Government Securities in accordance with Section 403 or
404 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 403 or 404, as the case may be, until such time as the
Trustee is permitted to apply all such money, U.S. Government Securities or
Foreign Government Securities in accordance with Section 403 or 404, as the case
may be.
ARTICLE V
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein, means with respect to any
particular series of Securities any one of the following events (whatever the
reason for such Event of Default and whether it shall be occasioned by the
provisions of Article XIV or otherwise and whether it be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule regulation of any
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administrative or governmental body), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in or pursuant
to the Board Resolution or supplemental indenture authorizing that series:
(a) default in the payment of any installment of interest upon any of
the Securities of that series when the same becomes due and payable, and
continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of (or premium, if any,
on) any of the Securities of that series at its Maturity by declaration or
otherwise; or
(c) default in the payment of any sinking or purchase fund payment or
analogous obligation when the same becomes due and payable by the terms of the
Securities of such series; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Securities of that series or in this Indenture for a period of 60 days after the
date on which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee by registered or
certified mail or to the Company and the Trustee by the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of such series.
(e) the entry of an order for relief against the Company under the
Federal Bankruptcy Act by a court having jurisdiction in the premises or a
decree or order by a court having jurisdiction in the premises adjudging the
Company a bankrupt or insolvent under any other applicable Federal or State law,
or the entry of a decree or order approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company under the Federal Bankruptcy Code or any other applicable Federal or
State law, or appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(f) the consent by the Company to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
of consent seeking reorganization or relief under the Federal Bankruptcy Code or
any other applicable Federal or State law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other 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 taking of corporate action by the
Company in furtherance of any such action; or
(g) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security for
such series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities,
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such portion of the principal amount of such Securities as may be specified in
the terms of that series) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel related thereto;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest or mandatory
sinking fund payment on any Security when such interest or mandatory
sinking fund payment becomes due and payable and such default continues for
a period of 30 days, or
(2) default is made in the payment (other than any sinking fund
payment) of the principal of (or premium, if any, on) any Security at the
Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition
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thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is 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 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture 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 505. 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 of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected.
Subject to Article XIV, 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, upon presentation of the Securities
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
607; and
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SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities 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 (and premium, if
any) and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series 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;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
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 508. 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) any interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and, if such Security is convertible pursuant to Article XIII hereof, to
convert such Security in accordance therewith and to institute suit for the
enforcement of any such payment and such right to convert, and such rights shall
not be impaired without the consent of such Holder.
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Section 509. 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 has been
discontinued or abandoned for any reason, or has 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, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
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 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any 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 that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. 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
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
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Upon any such waiver, such default shall cease to exist, and any Event
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 514. Undertaking for Costs.
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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
Section 515. 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 VI
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, 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. 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 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(d) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 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 with
respect to Securities of such series.
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Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
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 Officers' 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 of the Holders pursuant to this Indenture, unless
such Holders 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 be entitled to examine 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
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(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon
it by this Indenture.
Section 604. 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 the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
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
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. 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
otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to 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);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances 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 any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section 607 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness
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hereunder and shall survive the satisfaction and discharge of this Indenture.
Such additional indebtedness shall be a senior claim on that of the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities, and the Securities are hereby subordinated to
each senior claim.
Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
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 Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the 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 610. 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 611.
(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 611 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 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 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
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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, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the 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, 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 611. 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 which has been 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 611, 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 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) 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
to all Holders of Securities of such series in the manner provided in Section
106. 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 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, 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 its charges, 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.
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(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 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 and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (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 612. 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.
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Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor) to the extent applicable.
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer, partial conversion 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 of America, any State 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 and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. 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.
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No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is 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 in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By _______________________________
As Authenticating Agent
By _______________________________
Authorized Officer
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after January 1 and
July 1 in each year in such form as the Trustee may reasonably
require, a list for each series of Securities of the names and
addresses of the Holders of Securities of such series as of such date;
and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
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(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under the Trust
Indenture Act.
Section 703. Reports by Trustee.
(a) Within 60 days after the 15th day of February of each year
commencing with the later of February 15, 1995, or the first February 15th after
the first issuance of Securities, the Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person unless:
(1) 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 corporation organized and existing under the laws of
the United States of America, 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
on all the Securities and the performance of any covenant of the Indenture
on the part of the Company to be
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performed or observed and shall have provided for conversion rights, if
any, in accordance with Section 1311;
(2) 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 happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture complys with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
Section 802. Successor Substituted.
Upon any consolidation by the Company with or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or 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.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, 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:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default in respect of the
Securities of any specific series or all series; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or if permitted by law, to provide
for the exchangeability of such Securities of the same series in fully
registered form, or to permit or facilitate the issuance of Securities in
uncertificated form; or
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(5) to change or eliminate any of the provisions of this Indenture in
respect of one or more series of Securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any Security
of any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision nor (B) modify the rights of
the Holder of any such Security with respect to such provision or (ii)
shall become effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to make provision with respect to the conversion rights, if any,
of Holders of Securities of any series which are convertible in accordance
with Article XIII pursuant to the requirements of Section 1311; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor 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 611(b); or
(10) 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 provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
--------
to this clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, 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 of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
-------- -------
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) 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 any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment where, or the coin or currency 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 thereof (or, in the case of redemption, on
or after the Redemption Date), or,
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if the Securities of any series are convertible in accordance with Article
XIII, adversely affect the right to convert such Securities as provided
therein (except as permitted by Section 901(8)), or
(2) modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders, or
(3) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(4) modify any of the provisions of this Section, Section 513 or
Section 1006 except to increase any such percentage or to provide that
certain 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 and Section 1006, or the
deletion of this proviso, in accordance with the requirements of Sections
611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. 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 601) 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 or immunities under this Indenture or otherwise.
Section 904. 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 to the extent provided therein.
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Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal (and premium, if
any) and interest on the Securities of that series in accordance with the terms
of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange, and, if applicable, where Securities
of each series that is convertible pursuant to Article XIII may be surrendered
for conversion and where notices and demands to or upon the Company in respect
of the Securities of that series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
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Section 1003. 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 any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) and interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, not later than the opening of business at each
Place of Payment for such series of Securities on each due date of the principal
of or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of Securities
other than 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 will (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, 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, 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 on any Security of any series 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 the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, 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.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided
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hereunder) and, if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition of any covenant provided with respect to Securities
of any series as specified as contemplated by Section 301 (unless otherwise
provided by the terms of such series), if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but 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.
ARTICLE XI
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may
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provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series.
If less than all of the Securities of such series and of a specified tenor are
to be redeemed, the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
If any Security of any series selected for partial redemption which is
convertible in accordance with Article XIII is converted in part before
termination of the conversion right with respect to the portion of the Security
of that series so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
of any series which is convertible in accordance with Article XIII which have
been converted during a selection of Securities of a series to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, 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 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price 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,
(5) if applicable, the conversion price, the date on which the right
to convert the principal of the Securities to be redeemed will terminate
and the place or places where such Securities may be surrendered for
conversion,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
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(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Not later than the opening of business at each Place of Payment on any
Redemption Date for such series of Securities, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities 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 the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
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), and 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 of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
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ARTICLE XII
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been converted pursuant to Article XIII or
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 any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities 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 sinking fund payment shall be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 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 1103 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 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
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ARTICLE XIII
CONVERSION OF SECURITIES
Section 1301. Applicability; Conversion Privilege and Conversion
Price.
Securities of any series which are convertible into Common Stock of
the Company shall be convertible in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security of any series or any portion of
the principal amount thereof which is $1,000 or an integral multiple of $1,000
may be converted at the principal amount thereof, or of such portion thereof,
into fully paid and nonassessable shares (calculated as to each conversion to
the nearest one-hundredth of a share) of Common Stock of the Company, at the
Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on the
date specified for Securities of such series. In case a Security or portion
thereof is called for redemption, such conversion right in respect of the
Security or portions so called shall expire at the close of business on the
Redemption Date, unless the Company defaults in making the payment due upon
redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") shall be the price specified
in relation to Securities of such series pursuant to Section 301. The
Conversion Price shall be adjusted in certain instances as provided in
paragraphs (1), (2), (3), (4) and (7) of Section 1304.
Section 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, together with the
conversion notice duly executed, at any office or agency of the Company
maintained for that purpose pursuant to Section 1002, accompanied by written
notice to the Company at such office or agency that the Holder elects to convert
such Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities or portions thereof
surrendered for conversion during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (unless such Securities or portions
thereof have been called for redemption on a Redemption Date within such period)
be accompanied by payment to the Company or its order, in New York Clearing
House funds or other funds acceptable to the Company, of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of
Securities or portions thereof being surrendered for conversion. No payment or
adjustment shall be made upon any conversion on account of any interest accrued
on the Securities surrendered for conversion or, except as provided in Section
1304, on account of any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and shall deliver at such office or
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agency a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion, together with payment in lieu of any fraction of
a share, as provided in Section 1303.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
Section 1303. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion
of Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fractions in an amount equal to the same fraction of the market price
(determined as provided in the last sentence of paragraph (6) of Section 1304)
at the close of business on the day of conversion.
Section 1304. Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock,
the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price per
share(determined as provided in paragraph (6) of this Section) of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price in effect
at the opening of business on the day following the date fixed for such
determination shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of
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Common Stock which the aggregate of the offering price of the total number
of shares of Common Stock so offered for subscription or purchase would
purchase at such market price and the denominator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares
issuable in respect of such certificates issued in lieu of fractions of
shares of Common Stock. The Company will not issue any rights or warrants
in respect of shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination become effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid in cash
out of the retained earnings of the Company and any dividend or
distribution referred to in paragraph (1) of this Section), the Conversion
Price shall be adjusted so that the same shall equal the price determined
by multiplying the Conversion Price in effect immediately prior to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the numerator
shall be the current market price per share (determined as provided in
paragraph (6) of this Section) of the Common Stock on the date fixed for
such determination, reduced by the then fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution filed with the Trustee) of the portion of
the assets or evidences of indebtedness so distributed applicable to one
share of Common Stock and the denominator shall be such market price per
share of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for
the determination of stockholders entitled to receive such distribution.
(5) The reclassification of Common Stock into securities including
other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 1311 applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to
all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to
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receive such distribution" and "the date fixed for such determination")
within the meaning of paragraph (4) of this Section, and (b) a subdivision
or combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which
such subdivision or combination becomes effective" within the meaning of
paragraph (3) of this Section).
(6) For the purpose of any computation under paragraph (2) and (4) of
this Section, the current market price per share on any date shall be
deemed to be the average of the daily closing prices for the ten
consecutive Business Days selected by the Company commencing not less than
30 nor more than 45 Business Days before the day in question. The closing
price for each day shall be the last reported sales price regular way on
the composite tape or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way,
in either case on the New York Stock Exchange or, if the Common Stock is
not listed or admitted to trading on such Exchange, on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked
prices as furnished by any New York Exchange member firm selected from time
to time by the Company for that purpose.
(7) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1%;
provided, however, that any adjustments which by reason of this clause (7)
are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Article XIII
shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. The Company may make such reductions in the
Conversion Price, in addition to those required by paragraphs (1), (2), (3)
and (4) of this Section, as it considers to be advisable in order that any
event treated for Federal income tax purposes as a dividend of stock or
stock rights shall not be taxable to the recipients.
(8) The Trustee has no duty to determine when or how an adjustment
under this Article should be made or the amount of any such adjustment.
The Trustee has no duty to determine whether a supplemental indenture under
Section 1311 need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable
for and makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee
shall not be responsible for the Company's failure to comply with this
Article.
Section 1305. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 1304 and shall prepare a certificate signed by the
Treasurer or an Assistant Treasurer of the Company setting forth the
adjusted Conversion Price and showing in reasonable detail the facts
51
<PAGE>
upon which such adjustment is based, such certificate shall forthwith be
filed with the Trustee and at each office or agency maintained for the
purpose of conversion of Securities pursuant to Section 1002, and such
certificate shall be conclusive evidence of the correctness of such
adjustment; and
(b) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be required,
and as soon as practicable after it is required, such notice shall be
prepared by the Company, filed with the Trustee and mailed by the Company
to all Holders at their last addresses as they shall appear in the Security
Register.
Section 1306. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on Common Stock payable otherwise than in cash out of its retained
earnings; or
(b) the Company shall authorize the granting to the holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee and at each office or
agency maintained for the purpose of conversion of Securities pursuant to
Section 1002, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the Security Register, at least 15 days (or
ten days in any case specified in clause (a) or (b) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. The failure to give notice
required by this Section or any defect therein shall not affect the legality or
validity of any dividend, distribution, rights, warrants, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up,
or the vote on any such action.
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<PAGE>
Section 1307. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all outstanding Securities.
Section 1308. Taxes on Conversion.
The Company will pay any and all transfer taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant thereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
Section 1309. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1308, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
Section 1310. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee for cancellation and the Trustee shall dispose of the same as provided
in Section 309.
Section 1311. Provisions in Case of Consolidation, Merger or Sale of
Assets.
In case of any consolidation of the Company with, or merger of the
Company into, any other corporation or corporations, any merger of another
corporation into the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company) or any sale or transfer of all or substantially all
of the assets of the Company, the corporation or corporations formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right thereafter, during the period such Security shall be convertible as
specified in Section 1301, to convert such Security only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock of the Company into which such Security might have been converted
immediately prior to such consolidation, merger, sale or transfer, assuming such
holder of Common Stock of the Company (i) is not a corporation with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be
("constituent corporation"), or an Affiliate of a constituent corporation and
(ii) failed to exercise its rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer (provided that if the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer is not the same for each share of Common Stock of the Company held
immediately prior to such consolidation, merger, sale or transfer by others than
a constituent corporation or an Affiliate thereof and in respect of which such
rights of
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<PAGE>
election shall not have been exercised ("non-electing share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
ARTICLE XIV
SUBORDINATION OF SECURITIES
Section 1401. Securities Subordinate to Senior Indebtedness.
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of the Securities of each series, by their acceptance
thereof, likewise covenants and agrees, that the payment of the principal of and
premium and interest, if any, on each and all of the Securities is hereby
expressly subordinated, to the extent and in the manner set forth in this
Article, in right of payment to the prior payment in full of all Senior
Indebtedness.
Each Holder of the Securities of each series by his acceptance thereof
authorizes and directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article, and appoints the Trustee its attorney-in-fact for any and all such
purposes.
Section 1402. Payment over of Proceeds of Securities on Dissolution,
etc.
Upon any distribution of assets or securities of the Company in
connection with any dissolution, winding up, liquidation or reorganization of
the Company (whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Company or otherwise), the holders of all Senior
Indebtedness shall first be entitled to receive payment in full in accordance
with the terms of such Senior Indebtedness of the principal therefor and
premium, if any, and the interest due thereon before the Holders of the
Securities of any series are entitled to receive any payment or distribution
upon the principal, premium and interest, if any, on the Securities or sinking
fund payment; and, upon any such dissolution, winding up, liquidation or
reorganization, any payment or distribution of any kind or character, whether in
cash, property or securities of the Company (other than shares of stock of the
Company as reorganized or readjusted or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated to the payment of all Senior Indebtedness, at
least to the extent provided in this Article, which may at the time be
outstanding and which are provided for by a plan of reorganization or
readjustment which does not alter the rights of the holders of Senior
Indebtedness at the time outstanding and under which such other corporation, if
any, assumes all Senior Indebtedness at the time outstanding), to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article, including any such payment or distribution which may
be payable or deliverable by reason of the payment of any other indebtedness of
the Company being subordinated to the payment of the Securities, shall be made
by the liquidating trustee or agent or other person
54
<PAGE>
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Senior
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of (and premium, if any)
and interest on the Senior Indebtedness held or represented by each, to the
extent necessary to pay in full all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution or provision therefor to
the holders of Senior Indebtedness.
In the event that, notwithstanding the foregoing, upon any such
dissolution, winding up, liquidation or reorganization, any payment or
distribution of any kind or character, whether in cash, property or securities
of the Company (other than shares of stock of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment, the payment of which is subordinated
to the payment of all Senior Indebtedness, at least to the extent provided by
this Article, which may at the time be outstanding and which are provided for by
a plan of reorganization or readjustment which does not alter the rights of the
holders of Senior Indebtedness at the time outstanding and under which such
other corporation, if any, assumes all Senior Indebtedness at the time
outstanding), including any such payment or distribution which may be payable or
deliverable by reason of the payment of any indebtedness of the Company, if any,
subordinated to the payment of the Securities, shall be received by the Trustee
or the Holders of the Securities before all Senior Indebtedness is paid in full,
such payment or distribution shall be paid over to the holders of such Senior
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably as aforesaid, for application
to the payment of all Senior Indebtedness remaining unpaid until all such Senior
Indebtedness shall have been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to the holders of Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the holders of the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full, and none of the
payments or distributions to the holders of the Senior Indebtedness to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article or of payments over, pursuant to the provisions of
this Article, to the holders of the Senior Indebtedness by the Holders of the
Securities or the Trustee shall, as between the Company, its creditors other
than the holders of Senior Indebtedness, and the Holders of the Securities, be
deemed to be a payment by the Company to or on account of Senior Indebtedness,
it being understood that the provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand, and nothing contained in this Article or elsewhere in this Indenture
or in the Securities of any series is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the Holders of the Securities, the obligation of the Company, which is
unconditional and absolute, to pay to the Holders of the Securities the
principal of and premium and interest, if any (including interest accruing
subsequent to the commencement of any proceeding for the bankruptcy or
reorganization of the Company under any applicable bankruptcy, insolvency or
similar law now or hereafter in effect), on the Securities as and when the same
shall become due and payable in accordance with their terms, or to affect the
relative rights of the Holders of the Securities and creditors of the Company
other than the holders of the Senior Indebtedness,
55
<PAGE>
nor shall anything herein or therein prevent the Trustee or the Holder of any
Security of any series from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article, of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company within the
meaning of this Article. The Trustee, subject to the provisions of Section 601,
shall be entitled to assume that no such event has occurred and shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of moneys to or by the Trustee or the taking of any other
action by the Trustee, unless the Company or any one or more holders of Senior
Indebtedness of the Company or any trustee therefor (who shall have been
certified or otherwise established to the satisfaction of the Trustee to be such
a holder or trustee) has given written notice thereof to an officer in the
Corporate Trust Department of the Trustee at its Corporate Trust Office.
Upon any distribution of assets or securities of the Company referred
to in this Article, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree of a court of competent jurisdiction
in which such dissolution, winding up, liquidation or reorganization proceedings
are pending for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon, and all other facts pertinent thereto or
to this Article, and the Trustee, subject to the provisions of Article V hereof,
and the Holders of the Securities shall be entitled to rely upon a certificate
of the liquidating trustee or agent or other person making any distribution to
the Trustee or to the Holders of the Securities for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article. In the event that the Trustee
determines, in good faith, that further evidence is required, with respect to
the right of any person as a holder of Senior Indebtedness, to participate in
any payment or distribution pursuant to this Section 1402, the Trustee may
request such person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such person, as to the
extent to which such person is entitled to participation in such payment or
distribution, and as to other facts pertinent to the rights of such person under
this Section 1402, and if such evidence is not furnished, the Trustee may defer
any payment to such person pending judicial determination as to the right of
such person to receive such payment.
Section 1403. Priority of Senior Indebtedness upon Maturity.
Upon the maturity of the principal of any Senior Indebtedness by lapse
of time, acceleration or otherwise, all matured principal of Senior Indebtedness
and interest and premium thereon shall first be paid in full before any payment
of principal or premium or interest, if any, is made upon the Securities or
before any Securities can be acquired by the Company or any sinking fund payment
is made with respect to the Securities (except required sinking fund payments
may be reduced by Securities acquired before such maturity of such Senior
Indebtedness).
56
<PAGE>
Section 1404. Obligation of Company to pay Holders of Securities not
Affected.
Nothing contained in this Article or elsewhere in this Indenture, or
in any of the Securities of any series, shall affect the obligation of the
Company to make, or prevent the Company from making, payment of principal of
(including any sinking fund payment) or premium or interest, if any, on the
Securities, except under the conditions described in Section 1402 hereof or
during the pendency of any dissolution, winding up, liquidation or
reorganization proceedings referred to in Section 1402 or as provided in Section
1403 hereof.
Section 1405. Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all rights set forth in this Article
with respect to any Senior Indebtedness at any time held by it, to the same
extent as any holder of Senior Indebtedness. Nothing in this Article shall apply
to claims of, or payments to, the Trustee under or pursuant to Article VI
hereof.
Section 1406. Notice to Trustee to Effectuate Subordination.
Notwithstanding the provisions of this Article or any other provision
of the Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of moneys
to or by the Trustee unless and until an officer of the Trustee in its Corporate
Trust Department shall have received written notice thereof at its Corporate
Trust Office from the Company or from a holder of any Senior Indebtedness or
from any representative or representatives of such holder and, prior to the
receipt of any such written notice, the Trustee shall be entitled, subject to
Section 601, in all respects to assume that no such facts exist; provided, that,
if prior to the fifth Business Day preceding the date upon which by the terms
hereof any such moneys may become payable for any purpose, or in the event of
the execution of an instrument pursuant to Section 401 acknowledging
satisfaction and discharge of this Indenture, then if prior to the second
Business Day preceding the date of such execution, the Trustee shall not have
received with respect to such moneys the notice provided for in this Section,
then, anything herein contained to the contrary notwithstanding, the Trustee
may, in its discretion, receive such moneys and/or apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary, which may be received by it on or after such date; provided, however,
no such application shall affect the obligations under this Article of the
persons receiving such moneys from the Trustee.
Section 1407. Modification, Extension, etc. of Senior Indebtedness.
The holders of Senior Indebtedness may, without affecting in any
manner the subordination of the payment of the principal of and premium and
interest, if any, on the Securities, at any time or from time to time and in
their absolute discretion, change the manner, place or terms of payment, change
or extend the time of payment of, or renew or alter, any Senior Indebtedness, or
amend or supplement any instrument pursuant to which any Senior Indebtedness is
issued, or exercise or refrain from exercising any other of their rights under
the Senior Indebtedness including, without limitation, the waiver of default
thereunder, all without notice to or assent from the Holders of the Securities
or the Trustee.
57
<PAGE>
Section 1408. Trustee has no Fiduciary Duty to Holders of Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and objectives as
are specifically set forth in this Indenture, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if it shall mistakenly pay over or deliver to the
Holders of Securities or the Company or any other person, money or assets to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
Section 1409. Paying Agents other than the Trustee.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee, provided, however,
that Sections 1405, 1406 and 1408 shall not apply to the Company if it acts as
Paying Agent.
Section 1410. Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Section 1411. All Indenture Provisions Subject to Subordination
Provisions.
Notwithstanding anything contained herein to the contrary, all the
provisions of this Indenture shall be subject to the provisions of this Article,
so far as the same may be applicable thereto.
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.
58
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
ENSERCH CORPORATION
By_________________________________
Name:
Title:
Attest:
____________________________________
Name:
Title:
THE FIRST NATIONAL BANK
OF CHICAGO
By________________________________
Name:
Title:
Attest:
____________________________________
Name:
Title:
<PAGE>
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
Before me, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared _____________________,
____________________ of ENSERCH Corporation, a corporation, known to me to be
the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act and deed of
said corporation.
Given under my hand and seal of office, this
_____ day of _______________, 199_____.
[SEAL]
____________________________
Notary Public in and for
Dallas County, Texas
<PAGE>
EXHIBIT 4.6
FORM OF RESOLUTION
DESIGNATING SERIES OF PREFERRED STOCK
"RESOLVED, That pursuant to the authority conferred upon the Corporate
Securities Committee of the Board of Directors of this Company by the Board of
Directors, the Bylaws and Article Six of the Restated Articles of Incorporation
of this Company, the Corporate Securities Committee hereby creates a new series
of Preferred Stock of the Company which shall consist of ______________
(__________) shares of no par value (stated value of $______ per share), which
shall be designated and known as "____________________ (herein called
"____________________"), and that in addition to the preferences, rights, voting
powers and the restrictions or qualifications of all shares of Preferred Stock,
regardless of series, described and expressed in the Restated Articles of
Incorporation of the Company, the Board of Directors hereby declares that the
shares of the ____________________ shall have the terms, conditions, rights and
preferences, as follows:
1. Dividend Rate. [The dividend rate on the shares of
_____________________ shall be _______________.] [Insert description of any
adjustable or floating dividend rate.] [The amount of dividends payable for the
initial dividend period or any period shorter than a full quarterly dividend
period shall be computed on the basis of 30-day months and a 360-day year.]
2. Involuntary Liquidation. In the event of any involuntary liquidation,
dissolution or winding up of the Company, the holders of the
_____________________ shall be entitled to receive [$_____ per share] (which
amount shall be deemed to be its stated value on involuntary liquidation) plus
accrued dividends to the date of distribution, whether or not earned or
declared.
3. Voluntary Liquidation. In the event of any voluntary liquidation,
dissolution or winding up of the Company, the holders of the
____________________ shall be entitled to receive [$_______ per share] plus an
amount equal to the accrued dividends thereon to the date of distribution,
whether or not earned or declared.
4. [Optional] [Mandatory] Redemption [Non-Redeemable]. [The
___________________ will not be redeemable prior to __________. Thereafter,]
the Company shall have the option to redeem the whole or any part of the
___________________ at any time on at least thirty day's notice in accordance
with the provisions of Paragraph 3, c, (i) of Division A of Article Six of the
Restated Articles of Incorporation at [$_______ per share] [the following
redemption prices, together with any accrued dividends to the date of such
redemption:
<PAGE>
<TABLE>
<CAPTION>
If Redeemed During If Redeemed During
the 12-month Per Share the 12-month Per Share
Period Ending on Redemption Period Ending on Redemption
___________, Price ___________, Price
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
$ $
____ ____
____ ____
____ ____
____ and thereafter.]
</TABLE>
[The ____________________ shall not be redeemed by the Corporation at any time],
together with any accrued dividends to the date of such redemption. [Insert any
mandatory redemption provision.]
[5. So long as any shares of the ____________________ are outstanding,
shares of the _____________________ which are purchased, redeemed or otherwise
acquired by the Company shall not be reissued, or otherwise disposed of, as
shares of ____________________ Stock.]
6. [Conversion or Exchange.] [The ____________________ shall not have any
conversion or exchange rights.] [Insert description of any conversion or
exchange rights.]
7. [Voting Rights.] [The ____________________ shall have no voting rights
other than the voting rights set forth in the Restated Articles of Incorporation
of the Company or as otherwise provided by Texas law.] [Insert description of
any additional voting rights.]
"RESOLVED, That the President or any Vice President together with the
Secretary or any Assistant Secretary, be and hereby they are authorized and
directed to prepare, execute and deliver to the Secretary of State of Texas for
filing all certificates or other documents as may be required under the laws of
the State of Texas in order to give effect to the foregoing resolutions."
2
<PAGE>
EXHIBIT 4.7
[Form of Specimen Certificate
Representing Shares of Preferred Stock]
Number Shares
Preferred Preferred
Stock Stock
Incorporated Under the This Certificate is
Laws of the Transferrable in the
State of Texas City of New York, N.Y.
CUSIP __________
[ENSERCH CORPORATION LOGO]
See Reverse for
Certain Definitions
This is to certify that ____________________ is the owner of
___________________ fully paid and non-assessable shares of the
_____________________ Preferred Stock, no par value stock of ENSERCH Corporation
transferable on the books of the Corporation by the holder hereof, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed.
This Certificate is not value until countersigned by the Transfer Agent and
registered by the Registrar.
Witness, the seal of the Corporation and the signatures of its duly
authorized officers.
Dated _______________
_______________ _____________
Treasurer Chairman
<PAGE>
[Form of Reverse of Specimen Certificate
Representing Shares of Preferred Stock]
ENSERCH CORPORATION
Reference is made to the Restated Articles of Incorporation of the
Corporation and all amendments thereto, now of hereafter on file with the
Secretary of State of Texas, for a statement of the designations, preferences,
limitations and relative rights of the shares of each class of stock authorized
to be issued by the Corporation, the authority of the Board of Directors to fix
and determine the relative rights and preferences of series of stock, and the
denial of pre-emptive rights of all shareholders to acquire unissued or treasury
shares of any class of the Corporation; and reference is also made to the
resolution or resolutions of the Board of Directors of the Corporation, now or
hereafter on file with such Secretary of State, for a statement of the
variations in the relative rights and preferences of the shares of each series
of each preferred, voting preference or special class of stock which the
Corporation is authorized to issue so far as the same has or shall have been
fixed and determined.
Copies of the applicable provisions of the Restated Articles of
Incorporation may be obtained by any shareholder, without charge, upon written
request to the Corporate Secretary of the Corporation, Dallas, Texas.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as through they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - __________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors Act __________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, __________ hereby sell, assign and transfer unto
<PAGE>
Please Insert Social Security or Other
Identifying Number of Assignee
______________________________
______________________________________________________________________________
(Please print or typewrite name and address,
including zip code, or Assignee)
______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________________ shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _______________________ Attorney to transfer
the said stock on the books of the within named Corporation with full power of
substitution in the premises.
Dated_____________________
_______________________________________________________
NOTICE: The signature to this Assignment must correspond with the name as
written upon the face of the certificate in every particular,
without alteration or enlargement or any change whatever.
<PAGE>
EXHIBIT 4.8
[Form of Specimen Certificate
Representing Shares of Common Stock]
Number Shares
Common Common
Incorporated Under the This Certificate is
Laws of the Transferrable in the
State of Texas City of New York, N.Y.
CUSIP 293567 10 3
[ENSERCH CORPORATION LOGO]
See Reverse for
Certain Definitions
This is to certify that ____________________ is the owner of
___________________ of fully paid and non-assessable shares of the par value of
$4.45 per share of the Common Stock of ENSERCH Corporation transferable on the
books of the Corporation by the holder hereof, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed.
This Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
Witness, the seal of the Corporation and the signatures of its duly
authorized officers.
Dated _______________
_______________ _______________
Treasurer Chairman
<PAGE>
[Form of Reverse of Specimen Certificate
Representing Shares of Common Stock]
ENSERCH CORPORATION
Reference is made to the Restated Articles of Incorporation of the
Corporation and all amendments thereto, now of hereafter on file with the
Secretary of State of Texas, for a statement of the designations, preferences,
limitations and relative rights of the shares of each class of stock authorized
to be issued by the Corporation, the authority of the Board of Directors to fix
and determine the relative rights and preferences of series of stock, and the
denial of pre-emptive rights of all shareholders to acquire unissued or treasury
shares of any class of the Corporation; and reference is also made to the
resolution or resolutions of the Board of Directors of the Corporation, now or
hereafter on file with such Secretary of State, for a statement of the
variations in the relative rights and preferences of the shares of each series
of each preferred, voting preference or special class of stock which the
Corporation is authorized to issue so far as the same has or shall have been
fixed and determined.
Copies of the applicable provisions of the Restated Articles of
Incorporation may be obtained by any shareholder, without charge, upon written
request to the Corporate Secretary of the Corporation, Dallas, Texas.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as through they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - __________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors Act __________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, __________ hereby sell, assign and transfer unto
<PAGE>
Please Insert Social Security or Other
Identifying Number of Assignee
______________________________
_______________________________________________________________________________
(Please print or typewrite name and address,
including zip code, of Assignee)
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________ shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _______________________ Attorney to transfer
the said stock on the books of the within named Corporation with full power of
substitution in the premises.
Dated_____________________
_______________________________________________________
NOTICE: The signature to this Assignment must correspond with the name as
written upon the face of the certificate in every particular,
without alteration or enlargement or any change whatever.
________________________________________________________
Street or P.O. Box
________________________________________________________
City State Zip Code
This certificate also evidences and entitles the holder hereof to certain Rights
as set forth in the Rights Agreement between ENSERCH Corporation and Harris
Trust Company of New York (the "Rights Agent") dated as of April 15, 1986 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of the Rights
Agent. Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Rights Agent will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any Affiliate
or Associates thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
<PAGE>
EXHIBIT 4.9
================================================================================
ENSERCH CORPORATION
AND
____________________________, as Depositary
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
____________________
DEPOSIT AGREEMENT
_____________________
Dated as of _____________________, 199____
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I.
Definitions.
ARTICLE II.
Form of Receipts, Deposit of Stock, Execution and Delivery,
Transfer, Surrender and Redemption of Receipts.
SECTION 2.01. Form and Transfer of Receipts......................... 2
SECTION 2.02. Deposit of Stock; Execution and Delivery
of Receipts in Respect Thereof........................ 3
SECTION 2.03. Redemption of Stock................................... 4
SECTION 2.04. Registration of Transfer of Receipts.................. 5
SECTION 2.05. Split-ups and Combinations of Receipts;
Surrender of Receipts and Withdrawal of Stock......... 5
SECTION 2.06. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts.................... 6
SECTION 2.07. Lost Receipts, etc.................................... 6
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts.. 6
ARTICLE III.
Certain Obligations of
Holders of Receipts and the Corporation.
SECTION 3.01. Filing of Proofs, Certificates and Other Information.. 6
SECTION 3.02. Payment of Taxes or Other Governmental Charges........ 7
SECTION 3.03. Warranty as to Stock.................................. 7
ARTICLE IV.
The Deposited Securities; Notices.
SECTION 4.01. Cash Distributions.................................... 7
SECTION 4.02. Distributions Other than Cash, Rights, Preferences
or Privileges......................................... 7
SECTION 4.03. Subscription Rights, Preferences or Privileges........ 8
SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date
for Holders of Receipts............................... 9
SECTION 4.05. Voting Rights......................................... 9
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassification, Recapitalizations, etc. ............ 9
SECTION 4.07. Inspection of Reports................................. 10
SECTION 4.08. List of Receipt Holders............................... 10
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ARTICLE V.
The Depositary, the Depositary's
Agents, the Registrar and the Corporation.
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books
by the Depositary; Registrar.......................... 10
SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, the Registrar or
the Corporation....................................... 11
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Corporation............. 11
SECTION 5.04. Resignation and Removal of the Depositary;
Appointment of Successor Depositary................... 12
SECTION 5.05. Corporate Notices and Reports........................ 12
SECTION 5.06. Indemnification by the Corporation................... 12
SECTION 5.07. Charges and Expenses................................. 13
ARTICLE VI.
Amendment and Termination.
SECTION 6.01. Amendment............................................. 13
SECTION 6.02. Termination........................................... 13
ARTICLE VII.
Miscellaneous.
SECTION 7.01. Counterparts.......................................... 14
SECTION 7.02. Exclusive Benefit of Parties.......................... 14
SECTION 7.03. Invalidity of Provisions.............................. 14
SECTION 7.04. Notices............................................... 14
SECTION 7.05. Appointment of Registrar.............................. 15
SECTION 7.06. Holders of Receipts Are Parties....................... 15
SECTION 7.07. GOVERNING LAW......................................... 15
SECTION 7.08. Inspection of Deposit Agreement....................... 15
SECTION 7.09. Headings.............................................. 15
EXHIBITS.
Form of Depositary Receipt............................................... A-1
ii
<PAGE>
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of ___________________, 199_____, among
ENSERCH Corporation, a corporation duly organized and existing under the laws of
the State of Texas, ____________________________________, a
________________________________ (the "Depositary"), and the holders from time
to time of the Receipts described herein.
WITNESSETH:
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of [insert designation of preferred
stock] (without par value) of ENSERCH Corporation with the Depositary (as
hereinafter defined) for the purposes set forth in this Deposit Agreement and
for the issuance hereunder of Receipts (as hereinafter defined) evidencing
Depositary Shares, [insert designation] in respect of the Stock (as hereinafter
defined) so deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A
annexed hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:
ARTICLE I.
DEFINITIONS.
The following definitions shall, for all purposes, unless otherwise
clearly indicated, apply to the respective terms used in this Deposit Agreement
and the Receipts:
"Articles of Incorporation" shall mean the Restated Articles of
Incorporation, as amended from time to time, of the Corporation.
"Authorizing Resolution" shall mean the Statement of Resolution
establishing [insert designation of preferred stock] (without par value) of
ENSERCH Corporation adopted by the Corporation's Board of Directors and filed
with the Secretary of State of the State of Texas establishing and setting forth
the rights, preferences and privileges of the Stock.
"Corporation" shall mean ENSERCH Corporation, incorporated under the
laws of the State of Texas and having its principal office at ENSERCH Center,
300 South St. Paul Street, Dallas, Texas 75201, and its successors.
"Deposit Agreement" shall mean this Deposit Agreement, as the same may
be amended or supplemented from time to time.
"Depositary" shall mean _______________________________, a
____________________, and any successor as depositary hereunder.
"Depositary Shares" shall mean Depositary Shares [insert designation],
each representing a [insert fraction] interest in a share of Stock and evidenced
by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 7.05.
"Depositary's Office" shall mean the office of the Depositary in
[insert city/state], at which at any particular timed its depositary receipt
business shall be administered.
<PAGE>
"Receipt" shall mean one of the depositary receipts issued hereunder,
whether in definitive or temporary form.
"record holder" as applied to a Receipt shall mean the person in whose
name a Receipt is registered on the books of the Depositary maintained for such
purpose.
"Registrar" shall mean the Depositary or such other bank or trust
company which shall be appointed to register ownership and transfers of Receipts
as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of the Corporation's [insert designation of
preferred stock] (without par value).
ARTICLE II.
FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY,
TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS.
SECTION 2.01. FORM AND TRANSFER OF RECEIPTS. Definitive Receipts
shall be engraved or printed or lithographed and substantially in the form set
forth as Exhibit A hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided. Pending the preparation of definitive
Receipts, the Depositary, upon the written order of the Corporation or any
holder of Stock, as the case may be, delivered in compliance with Section 2.02,
shall execute and deliver temporary Receipts which are printed, lithographed,
typewritten, mimeographed or otherwise substantially of the tenor of the
definitive Receipts in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the persons
executing such Receipts may determine, as evidenced by their execution of such
Receipts. If temporary Receipts are issued, the Corporation and the Depositary
will cause definitive Receipts to be prepared without unreasonable delay. After
the preparation of definitive Receipts, the temporary Receipts shall be
exchangeable for definitive Receipts upon surrender of the temporary Receipts at
the Depositary's Office or at such other place or places as the Depositary shall
determine, without charge to the holder. Upon surrender for cancellation of any
one or more temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of Depositary
Shares as represented by the surrendered temporary Receipt or Receipts. Such
exchange shall be made at the Corporation's expense and without any charge to
the holder therefor. Until so exchanged, the temporary Receipts shall in all
respects be entitled to the same benefits under this Deposit Agreement, and with
respect to the Stock, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature
of a duly authorized officer of the Depositary, provided, that such signature
may be a facsimile if a Registrar for the Receipts (other than the Depositary)
shall have been appointed and such Receipts are countersigned by a manual
signature of a duly authorized officer of the Registrar. No Receipt shall be
entitled to any benefits under this Deposit Agreement or be valid or obligatory
for any purpose unless it shall have been executed manually by a duly authorized
officer of the Depositary or, if a Registrar for the Receipts (other than the
Depositary) shall have been appointed, by manual or facsimile signature of a
duly authorized officer of the Depositary and countersigned, manually, by a duly
authorized officer of such Registrar. The Depositary shall record on its books
each Receipt so signed and delivered as hereinafter provided.
2
<PAGE>
Receipts shall be in denominations of any number of whole Depositary
Shares. The Corporation shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed, or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt which is properly
endorsed or accompanied by a properly executed instrument of transfer, shall be
transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Receipt shall be
registered on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.02. DEPOSIT OF STOCK; EXECUTION AND DELIVERY OF RECEIPTS IN
RESPECT THEREOF. Subject to the terms and conditions of this Deposit Agreement,
the Company or any holder of Stock may from time to time deposit shares of the
Stock under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Stock to be deposited, properly endorsed or
accompanied, if required by the Depositary, by a duly executed instrument of
transfer or endorsement, in form satisfactory to the Depositary, together with
all such certifications as may be required by the Depositary in accordance with
the provisions of this Deposit Agreement, and together with a written order of
the Company or such holder, as the case may be, directing the Depositary to
execute and deliver to, or upon the written order of, the person or persons
stated in such order a Receipt or Receipts for the number of Depositary Shares
representing such deposited Stock.
Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places in the State of __________ as the
Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together with
the other documents required as above specified, and upon recordation of the
Stock on the books of the Corporation in the name of the Depositary or its
nominee, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver to or upon the order of the person or
persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section, a Receipt or Receipts for the whole number
of Depositary Shares representing the Stock so deposited and registered in such
name or names as may be requested by such person or persons. The Depositary
shall execute and deliver such Receipt or Receipts at the Depositary's Office or
such other offices, if any, as the Depositary may designate. Delivery at other
offices shall be at the risk and expense of the person requesting such delivery.
Other than in the case of splits, combinations or other
reclassifications affecting the Stock, or in the case of dividends or other
distributions of Stock, if any, there shall be deposited hereunder not more than
____________ shares of Stock.
3
<PAGE>
SECTION 2.03. REDEMPTION OF STOCK. Whenever the Corporation shall
elect to redeem shares of Stock in accordance with the provisions of the
Authorizing Resolution, it shall (unless otherwise agreed in writing with the
Depositary) give or cause to be given to the Depositary not less than __________
days' and not more than __________ days' notice of the date of such proposed
redemption and of the number of such shares held by the Depositary to be so
redeemed, which notice shall be accompanied by a certificate from the
Corporation stating that such redemption of Stock is in accordance with the
provisions of the Authorizing Resolution. On the date of such redemption,
provided that the Corporation shall then have paid in full to the Depositary the
redemption price of the Stock to be redeemed, plus any accrued and unpaid
dividends thereon, the Depositary shall redeem the number of Depositary Shares
representing such Stock. The Depositary shall mail notice of such redemption
and the proposed simultaneous redemption of the number of Depositary Shares
representing the Stock to be redeemed, first-class mail, postage prepaid, not
less than 30 and not more than 60 days prior to the date fixed for redemption of
such Stock and Depositary Shares (the "Redemption Date") to the record holders
of the Receipts evidencing the Depositary Shares to be so redeemed, at the
address of such holders as they appear on the records of the Depositary; but
neither failure to mail any such notice to one or more such holders nor any
defect in any notice to one or more such holders shall affect the sufficiency of
the proceedings for redemption as to other holders. Each such notice shall
state: (i) the Redemption Date; (ii) the number of Depositary Shares to be
redeemed and, if less than all the Depositary Shares held by any such holder are
to be redeemed, the number of such Depositary Shares held by such holder to be
so redeemed; (iii) the redemption price; (iv) the place or places where Receipts
evidencing Depositary Shares are to be surrendered for payment of the redemption
price; and (v) that dividends in respect of the Stock represented by the
Depositary Shares to be redeemed will cease to accrue on such Redemption Date.
In case less than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be so redeemed shall be selected by the Depositary by lot
or pro rata (as nearly as may be) or in any other manner, as determined by the
Depositary to be equitable.
Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Corporation shall have failed to redeem
the Stock to be redeemed by it as set forth in the Corporation's notice provided
for in the preceding paragraph) all dividends on the shares of Stock so called
for redemption shall cease to accrue and accumulate, the Depositary Shares being
redeemed from such proceeds shall be deemed no longer to be outstanding, all
rights of the holders of Receipts evidencing such Depositary Shares (except the
right to receive the redemption price) shall, to the extent of such Depositary
Shares, cease and terminate and, upon surrender in accordance with such notice
of the Receipts evidencing any such Depositary Shares (properly endorsed or
assigned for transfer, if the Depositary shall so require), such Depositary
Shares shall be redeemed by the Depositary at a redemption price per Depositary
Share equal to [insert fraction] of the redemption price per share paid with
respect to the shares of Stock plus all money and other property, if any,
represented by such Depositary Shares, including all amounts paid by the
Corporation in respect of dividends which on the Redemption Date have
accumulated on the shares of Stock to be so redeemed and have not theretofore
been paid.
If less than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the redemption payment, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.
SECTION 2.04. REGISTRATION OF TRANSFER OF RECEIPTS. Subject to the
terms and conditions of this Deposit Agreement, the Depositary shall register on
its books from time to time transfers of Receipts upon any
4
<PAGE>
surrender thereof by the holder in person or by duly authorized attorney,
properly endorsed or accompanied by a properly executed instrument of transfer.
Thereupon the Depositary shall execute a new Receipt or Receipts evidencing the
same aggregate number of Depositary Shares as those evidenced by the Receipt or
Receipts surrendered and deliver such new Receipt or Receipts to or upon the
order of the person entitled thereto.
SECTION 2.05. SPLIT-UPS AND COMBINATIONS OF RECEIPTS; SURRENDER OF
RECEIPTS AND WITHDRAWAL OF STOCK. Upon surrender of a Receipt or Receipts at
the Depositary's Office or at such other offices as it may designate for the
purpose of effecting a split-up or combination of such Receipt or Receipts, and
subject to the terms and conditions of this Deposit Agreement, the Depositary
shall execute and deliver a new Receipt or Receipts in the authorized
denominations requested, evidencing the aggregate number of Depositary Shares
evidenced by the Receipt or Receipts surrendered.
Any holder of a Receipt or Receipts representing any number of whole
shares of Stock may withdraw the Stock and all money and other property, if any,
represented thereby by surrendering such Receipt or Receipts, at the
Depositary's Office or at such other offices as the Depositary may designate for
such withdrawals. Thereafter, without unreasonable delay, the Depositary shall
deliver to such holder, or to the person or persons designated by such holder as
hereinafter provided, the number of whole shares of Stock and all money and
other property, if any, represented by the Receipt or Receipts so surrendered
for withdrawal, but holders of such whole shares of Stock will not thereafter be
entitled to deposit such Stock hereunder or to receive Depositary Shares
therefor. If a Receipt delivered by the holder to the Depositary in connection
with such withdrawal shall evidence a number of Depositary Shares in excess of
the number of Depositary Shares representing the number of whole shares of Stock
to be so withdrawn, the Depositary shall at the same time, in addition to such
number of whole shares of Stock and such money and other property, if any, to be
so withdrawn, deliver to such holder, or upon his order, a new Receipt
evidencing such excess number of Depositary Shares. Delivery of the Stock and
money and other property being withdrawn may be made by the delivery of such
certificates, documents of title and other instruments as the Depositary may
deem appropriate.
If the Stock and the money and other property being withdrawn are to
be delivered to a person or persons other than the record holder of the Receipt
or Receipts being surrendered for withdrawal of Stock, such holder shall execute
and deliver to the Depositary a written order so directing the Depositary and
the Depositary may require that the Receipt or Receipts surrendered by such
holder for withdrawal of such shares of Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank.
Delivery of the Stock and the money and other property, if any,
represented by Receipts surrendered for withdrawal shall be made by the
Depositary at the Depositary's Office, except that, at the request, risk and
expense of the holder surrendering such Receipt or Receipts and for the account
of the holder thereof, such delivery may be made at such other place as may be
designated by such holder.
SECTION 2.06. LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND EXCHANGE OF RECEIPTS. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, any of the Depositary's Agents or the
Corporation may require payment to it of a sum sufficient for the payment (or,
in the event that the Depositary or the Corporation shall have made such
payment, the reimbursement to it) of any charges or expenses payable by the
holder of a Receipt pursuant to Section 5.07, may require the production of
evidence satisfactory to it as to the identity and genuineness of any
5
<PAGE>
signature and may also require compliance with such regulations, if any, as the
Depositary or the Corporation may establish consistent with the provisions of
this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against
Stock may be suspended, the registration of transfer of Receipts may be refused
and the registration of transfer, surrender or exchange of outstanding Receipts
may be suspended (i) during any period when the register of stockholders of the
Corporation is closed, (ii) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Corporation at any time
or from time to time because of any requirement of law or of any government or
governmental body or commission or under any provision of this Deposit Agreement
or (iii) with the approval of the Corporation, for any other reason. Without
limitation of the foregoing, the Depositary shall not knowingly accept for
deposit under this Deposit Agreement any shares of Stock which are required to
be registered under the Securities Act, unless a registration statement under
such Act is in effect as to such shares of Stock.
SECTION 2.07. LOST RECEIPTS, ETC. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence satisfactory to the Depositary of such
destruction or loss or theft of such Receipt, of the authenticity thereof and of
his or her ownership thereof and (ii) the furnishing of the Depositary with
reasonable indemnification satisfactory to it.
SECTION 2.08. CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so cancelled.
ARTICLE III.
CERTAIN OBLIGATIONS OF
HOLDERS OF RECEIPTS AND THE CORPORATION.
SECTION 3.01. FILING OF PROOFS, CERTIFICATES AND OTHER INFORMATION.
Any holder of a Receipt may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the
Corporation may reasonably deem necessary or proper. The Depositary or the
Corporation may withhold the delivery, or delay the registration of transfer,
redemption or exchange, of any Receipt or the withdrawal of the Stock
represented by the Depositary Shares evidenced by any Receipt or the
distribution of any dividend or other distribution or the sale of any rights or
of the proceeds thereof until such proof or other information is filed or such
certificates are executed or such representations and warranties are made.
SECTION 3.02. PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. Holders
of Receipts shall be obligated to make payments to the Depositary of certain
charges and expenses, as provided in Section 5.07. Registration of transfer of
any Receipt or any withdrawal of Stock and all money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused
until any such payment due is made, and any dividends, interest payments or
other distributions may be withheld or any part or all of the Stock or other
property represented by the Depositary Shares evidenced by such Receipt and not
theretofore sold may be sold for the account of the
6
<PAGE>
holder thereof (after attempting by reasonable means to notify such holder prior
to such sale), and such dividends, interest payments and other distributions or
the proceeds of any such sale may be applied to any payment of such charges or
expenses, the holder of such Receipt remaining liable for any deficiency.
SECTION 3.03. WARRANTY AS TO STOCK. The Corporation hereby represents
and warrants that the Stock, when issued, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights. Such representation and
warranty shall survive the deposit of the Stock and the issuance of Receipts.
ARTICLE IV.
THE DEPOSITED SECURITIES; NOTICES.
SECTION 4.01. CASH DISTRIBUTIONS. Whenever the Depositary shall
receive any cash dividend or other cash distribution on Stock, the Depositary
shall, subject to Sections 3.01 and 3.02, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.04 such amounts of such
dividend or distribution as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the Receipts held by such
holders; provided, however, that in case the Corporation or the Depositary shall
be required to withhold and shall withhold from any cash dividend or other cash
distribution in respect of the Stock an amount on account of taxes, the amount
made available for distribution or distributed in respect of Depositary Shares
shall be reduced accordingly. The Depositary shall distribute or make available
for distribution, as the case may be, only such amount, however, as can be
distributed without attributing to any owner of Depositary Shares a fraction of
one cent and any balance not so distributable shall be held by the Depositary
(without liability for interest thereon) and shall be added to and be treated as
part of the next sum received by the Depositary for distribution to record
holders of Receipts then outstanding.
SECTION 4.02. DISTRIBUTIONS OTHER THAN CASH, RIGHTS, PREFERENCES OR
PRIVILEGES. Whenever the Depositary shall receive any distribution other than
cash, rights, preferences or privileges upon Stock, the Depositary shall,
subject to Sections 3.01 and 3.02, distribute to record holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of the securities or
property received by it as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the Receipts held by such
holders, in any manner that the Depositary may deem equitable and practicable
for accomplishing such distribution. If in the opinion of the Depositary such
distribution cannot be made proportionately among such record holders, or if for
any other reason (including any requirement that the Corporation or the
Depositary withhold an amount on account of taxes) the Depositary deems, after
consultation with the Corporation, such distribution not to be feasible, the
Depositary may, with the approval of the Corporation, adopt such method as it
deems equitable and practicable for the purpose of effecting such distribution,
including the sale (at public or private sale) of the securities or property
thus received, or any part thereof, at such place or places and upon such terms
as it may deem proper. The net proceeds of any such sale shall, subject to
Sections 3.01 and 3.02, be distributed or made available for distribution, as
the case may be, by the Depositary to record holders of Receipts as provided by
Section 4.01 in the case of a distribution received in cash.
SECTION 4.03. SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the
Corporation shall at any time offer or cause to be offered to the persons in
whose names Stock is recorded on the books of the Corporation any rights,
preferences or privileges to subscribe for or to purchase any securities or
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<PAGE>
any rights, preferences or privileges of any other nature, such rights,
preferences or privileges shall in each such instance be made available by the
Depositary to the record holders of Receipts in such manner as the Depositary
may determine, either by the issue to such record holders of warrants
representing such rights, preferences or privileges or by such other method as
may be approved by the Depositary in its discretion with the approval of the
Corporation; provided, however, that (i) if at the time of issue or offer of any
such rights, preferences or privileges the Depositary determines that it is not
lawful or (after consultation with the Corporation) not feasible to make such
rights, preferences or privileges available to holders of Receipts by the issue
of warrants or otherwise, or (ii) if and to the extent so instructed by holders
of Receipts who do not desire to exercise such rights, preferences or
privileges, then the Depositary, in its discretion (with approval of the
Corporation, in any case where the Depositary has determined that it is not
feasible to make such rights, preferences or privileges available), may, if
applicable laws or the terms of such rights, preferences or privileges permit
such transfer, sell such rights, preferences or privileges at public or private
sale, at such place or places and upon such terms as it may deem proper. The
net proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed by the Depositary to the record holders of Receipts entitled thereto
as provided by Section 4.01 in the case of a distribution received in cash.
If registration under the Securities Act of the securities to which
any rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold the securities to which such rights, preferences
or privileges relate, the Corporation agrees with the Depositary that it will
file promptly a registration statement pursuant to such Act with respect to such
rights, preferences or privileges and securities and use its best efforts and
take all steps available to it to cause such registration statement to become
effective sufficiently in advance of the expiration of such rights, preferences
or privileges to enable such holders to exercise such rights, preferences or
privileges. In no event shall the Depositary make available to the holders of
Receipts any right, preference or privilege to subscribe for or to purchase any
securities unless and until such a registration statement shall have become
effective, or unless the offering and sale of such securities to such holders
are exempt from registration under the provisions of the Securities Act.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Corporation agrees with the Depositary that the Corporation
will use its best efforts to take such action or obtain such authorization,
consent or permit sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges.
SECTION 4.04. NOTICE OF DIVIDENDS, ETC.; FIXING OF RECORD DATE FOR
HOLDERS OF RECEIPTS. Whenever any cash dividend or other cash distribution
shall become payable or any distribution other than cash shall be made, or if
rights, preferences or privileges shall at any time be offered, with respect to
Stock, or whenever the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice, or whenever the Depositary and the Corporation shall decide it is
appropriate, the Depositary shall in each such instance fix a record date (which
shall be the same as the record date fixed by the Corporation with respect to
the Stock) for the determination of the holders of Receipts who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or to give instructions for
the exercise of voting rights at any such meeting, or who
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<PAGE>
shall be entitled to notice of such meeting or for any other appropriate
reasons.
SECTION 4.05. VOTING RIGHTS. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of meeting and
(ii) a statement that the holders may, subject to any applicable restrictions,
instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of Stock represented by their respective Depositary Shares (including
an express indication that instructions may be given to the Depositary to give a
discretionary proxy to a person designated by the Corporation) and a brief
statement as to the manner in which such instructions may be given. Upon the
written request of the holders of Receipts on the relevant record date, the
Depositary shall endeavor insofar as practicable to vote or cause to be voted,
in accordance with the instructions set forth in such requests, the maximum
number of whole shares of Stock represented by the Depositary Shares evidenced
by all Receipts as to which any particular voting instructions are received.
The Corporation hereby agrees to take all action which may be deemed necessary
by the Depositary in order to enable the Depositary to vote such Stock or cause
such Stock to be voted. In the absence of specific instructions from the holder
of a Receipt, the Depositary will abstain from voting (but, at its discretion,
not from appearing at any meeting with respect to such Stock unless directed to
the contrary by the holders of all the Receipts) to the extent of the Stock
represented by the Depositary Shares evidenced by such Receipt.
SECTION 4.06. CHANGES AFFECTING DEPOSITED SECURITIES AND
RECLASSIFICATION, RECAPITALIZATIONS, ETC. Upon any change in par or stated
value or liquidation preference, split-up, combination or any other
reclassification of the Stock, or upon any recapitalization, reorganization,
merger or consolidation affecting the Corporation or to which it is a party, the
Depositary may in its discretion, with the approval of, and shall upon the
instructions of, the Corporation, and (in either case) in such manner as the
Depositary may deem equitable, (i) make such adjustments in (a) the fraction of
an interest represented by one Depositary Share in one share of Stock and (b)
the ratio of the redemption price per Depositary Share to the redemption price
of a share of Stock, in each case as may be necessary fully to reflect the
effects of such change in par or stated value or liquidation preference, split-
up, combination or other reclassification of Stock, or of such recapitalization,
reorganization, merger or consolidation and (ii) treat any securities which
shall be received by the Depositary in exchange for or upon conversion of or in
respect of the Stock as new deposited securities so received in exchange for or
upon conversion or in respect of such Stock. In any such case the Depositary
may in its discretion, with the approval of the Corporation, execute and deliver
additional Receipts or may call for the surrender of all outstanding Receipts to
be exchanged for new Receipts specifically describing such new deposited
securities. Anything to the contrary herein notwithstanding, holders of
Receipts shall have the right from and after the effective date of any such
change in par or stated value or liquidation preference, split-up, combination
or other reclassification of the Stock or any such recapitalization,
reorganization, merger or consolidation to surrender such Receipts to the
Depositary with instructions to convert, exchange or surrender the Stock
represented thereby only into or for, as the case may be, the kind and amount of
shares of stock and other securities and property and cash into which the Stock
represented by such Receipts might have been converted or for which such Stock
might have been exchanged or surrendered immediately prior to the effective date
of such transaction.
SECTION 4.07. INSPECTION OF REPORTS. The Depositary shall make
available for inspection by holders of Receipts any reports and communications
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<PAGE>
received from the Corporation which are received by the Depositary as the holder
of Stock.
SECTION 4.08. LIST OF RECEIPT HOLDERS. Promptly upon request from
time to time by the Corporation, the Depositary shall furnish to it a list, as
of a recent date, of the names, addresses and holdings of Depositary Shares of
all record holders of Receipts.
ARTICLE V.
THE DEPOSITARY, THE DEPOSITARY'S
AGENTS, THE REGISTRAR AND THE CORPORATION.
SECTION 5.01. MAINTENANCE OF OFFICES, AGENCIES AND TRANSFER BOOKS BY
THE DEPOSITARY; REGISTRAR. Upon execution of this Deposit Agreement, the
Depositary shall maintain at the Depositary's Office, facilities for the
execution and delivery, registration and registration of transfer, surrender and
exchange of Receipts, and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration of transfer, surrender and exchange of
Receipts, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Receipts, which books at all
reasonable times shall be open for inspection by the record holders of Receipts;
provided that any such holder requesting to exercise such right shall certify to
the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.
The Depositary may close such books, at any time or from time to time,
when deemed expedient by it in connection with the performance of its duties
hereunder.
The Depositary may, with the approval of the Corporation, appoint a
Registrar for registration of the Receipts or the Depositary Shares evidenced
thereby. If the Receipts or the Depositary Shares evidenced thereby or the
Stock represented by such Depositary Shares shall be listed on the New York
Stock Exchange, the Depositary will appoint a Registrar (acceptable to the
Corporation) for registration of such Receipts or Depositary Shares in
accordance with any requirements of such Exchange. Such Registrar (which may be
the Depositary if so permitted by the requirements of such Exchange) may be
removed and a substitute registrar appointed by the Depositary upon the request
or with the approval of the Corporation. If the Receipts, such Depositary
Shares or such Stock are listed on one or more other stock exchanges, the
Depositary will, at the request of the Corporation, arrange such facilities for
the delivery, registration, registration of transfer, surrender and exchange of
such Receipts, such Depositary Shares or such Stock as may be required by law or
applicable stock exchange regulation.
SECTION 5.02. PREVENTION OF OR DELAY IN PERFORMANCE BY THE DEPOSITARY,
THE DEPOSITARY'S AGENTS, THE REGISTRAR OR THE CORPORATION. Neither the
Depositary nor any Depositary's Agent nor any Registrar nor the Corporation
shall incur any liability to any holder of any Receipt, if by reason of any
provision of any present or future law, or regulation thereunder, of the United
States of America, or of any other governmental authority or, in the case of the
Depositary, the Depositary's Agent or the Registrar, by reason of any provision,
present or future, of the Corporation's Articles of Incorporation or the
Authorizing Resolution or by reason of any act of God or war or other
circumstance beyond the reasonable control of the relevant party, the
Depositary, any Depositary's Agent, any Registrar or the Corporation shall be
prevented or forbidden from, or subjected to any penalty
10
<PAGE>
on account of, doing or performing any act or thing which the terms of this
Deposit Agreement provide shall be done or performed, nor shall the Depositary,
any Depositary's Agent, any Registrar or the Corporation incur liability to any
holder of a Receipt (i) by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing which the terms of this
Deposit Agreement shall provide shall or may be done or performed, or (ii) by
reason of any exercise of, or failure to exercise, any discretion provided for
in this Deposit Agreement except, in the case of any such exercise or failure to
exercise discretion not caused as aforesaid, if caused by the gross negligence
or willful misconduct of the party charged with such exercise or failure to
exercise.
SECTION 5.03. OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE CORPORATION. Neither the Depositary nor any Depositary's
Agent nor any Registrar nor the Corporation assumes any obligation or shall be
subject to any liability under this Deposit Agreement to holders of Receipts
other than for its gross negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor any Registrar
nor the Corporation shall be under any obligation to appear in, prosecute or
defend any action, suit or other proceeding in respect of the Stock, the
Depositary Shares or the Receipts which in its opinion may involve it in expense
or liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Corporation shall be liable for any action or any failure to act by it
in reliance upon the written advice of legal counsel or accountants, or
information from any person presenting Stock for deposit, any holder of a
Receipt or any other person believed by it in good faith to be competent to give
such information. The Depositary, any Depositary's Agent, any Registrar and the
Corporation may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the shares of Stock or for the manner or effect
of any such vote made, as long as any such action or non-action is in good
faith. The Depositary undertakes, and any Registrar shall be required to
undertake, to perform such duties and only such duties as are specifically set
forth in this Deposit Agreement, and no implied covenants or obligations shall
be read into this Agreement against the Depositary or any Registrar. The
Depositary will indemnify the Corporation against any liability which may arise
out of acts performed or omitted by the Depositary or its agents due to its or
their negligence, willful misconduct or bad faith. The Depositary, the
Depositary's Agents, and any Registrar may own and deal in any class of
securities of the Corporation and its affiliates and in Receipts. The
Depositary may also act as transfer agent or registrar of any of the securities
of the Corporation and its affiliates.
SECTION 5.04. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT
OF SUCCESSOR DEPOSITARY. The Depositary may at any time resign as Depositary
hereunder by having written notice of its election to do so delivered to the
Corporation, such resignation to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Corporation by notice
of such removal delivered to the Depositary, such removal to take effect upon
the appointment of a successor Depositary and its acceptance of such appointment
as hereinafter provided.
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In case at any time the Depositary acting hereunder shall resign or be
removed, the Corporation shall, within 60 days after the delivery of the notice
of resignation or removal, as the case may be, appoint a successor Depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$50,000,000. If no successor Depositary shall have been so appointed and have
accepted appointment within 60 days after delivery of such notice, the resigning
or removed Depositary may petition any court of competent jurisdiction for the
appointment of a successor Depositary. Every successor Depositary shall execute
and deliver to its predecessor and to the Corporation an instrument in writing
accepting its appointment hereunder, and thereupon such successor Depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor and for all purposes shall be
the Depositary under this Deposit Agreement, and such predecessor, upon payment
of all sums due it and on the written request of the Corporation, shall execute
and deliver an instrument transferring to such successor all rights and powers
of such predecessor hereunder, shall duly assign, transfer and deliver all
right, title and interest in the Stock and any moneys or property held hereunder
to such successor, and shall deliver to such successor a list of the record
holders of all outstanding Receipts. Any successor Depositary shall promptly
mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act, and notice thereof shall
not be required hereunder. Such successor Depositary may authenticate the
Receipts in the name of the predecessor Depositary or in the name of the
successor Depositary.
SECTION 5.05. CORPORATE NOTICES AND REPORTS. The Corporation agrees
that it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at the
addresses recorded in the Depositary's books, copies of all notices and reports
(including, without limitation, financial statements) required by law, the rules
of any national securities exchange upon which the Stock, the Depositary Shares
or the Receipts are listed or by the Corporation's Articles of Incorporation and
the Authorizing Resolution, to be furnished by the Corporation to the holders of
Stock. Such transmission will be at the Corporation's expense and the
Corporation will provide the Depositary with such number of copies of such
documents as the Depositary may reasonably request. In addition, the Depositary
will transmit to the holders of Receipts (at the Corporation's expense) such
other documents as may be requested by the Corporation.
SECTION 5.06. INDEMNIFICATION BY THE CORPORATION. The Corporation
shall indemnify the Depositary, any Depositary's Agent and any Registrar
against, and hold each of them harmless from, any loss, liability or expense
(including the reasonable costs and expenses of defending itself) which may
arise out of (i) acts performed or omitted in connection with this Deposit
Agreement and the Receipts (a) by the Depositary, any Registrar or any of their
respective agents (including any Depositary's Agent), except for any liability
arising out of negligence, willful misconduct or bad faith on the respective
parts of any such person or persons or (b) by the Corporation or any of its
agents, or (ii) the offer, sale or registration of the Receipts or the Stock
pursuant to the provisions hereof. The obligations of the Corporation set forth
in this Section 5.06 shall survive any succession of any Depositary, Registrar
or Depositary's Agent.
SECTION 5.07. CHARGES AND EXPENSES. The Corporation shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements. The Corporation shall pay all
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<PAGE>
charges of the Depositary in connection with the initial deposit of the Stock
and the initial issuance of the Depositary Shares, all withdrawals of shares of
the Stock by owners of Depositary Shares, and any redemption of the Stock at the
option of the Corporation. All other transfer and other taxes and governmental
charges shall be at the expense of holders of Depositary Shares. If, at the
request of a holder of Receipts, the Depositary incurs charges or expenses for
which it is not otherwise liable hereunder, such holder will be liable for such
charges and expenses. All other charges and expenses of the Depositary and any
Depositary's Agent hereunder and any Registrar (including, in each case,
reasonable fees and expenses of counsel) incident to the performance of their
respective obligations hereunder will be paid upon consultation and agreement
between the Depositary and the Corporation as to the amount and nature of such
charges and expenses. The Depositary shall present its statement for charges
and expenses to the Corporation once every three months or at such other
intervals as the Corporation and the Depositary may agree.
ARTICLE VI.
AMENDMENT AND TERMINATION.
SECTION 6.01. AMENDMENT. The form of the Receipts and any provisions
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Corporation and the Depositary in any respect which they
may deem necessary or desirable; provided, however, that no such amendment
(other than any change in the fees of any Depositary or Registrar, which shall
go into effect not sooner than three months after notice thereof to the holders
of the Receipts) which shall materially and adversely alter the rights of the
holders of Receipts shall be effective unless such amendment shall have been
approved by the holders of at least a majority of the Depositary Shares then
outstanding. Every holder of an outstanding Receipt at the time any such
amendment becomes effective shall be deemed, by continuing to hold such Receipt,
to consent and agree to such amendment and to be bound by the Deposit Agreement
as amended thereby.
SECTION 6.02. TERMINATION. This Deposit Agreement may be terminated
by the Corporation or the Depositary only after (i) all outstanding Depositary
Shares have been redeemed pursuant to Section 2.03 or (ii) there shall have been
made a final distribution in respect of the Stock in connection with any
liquidation, dissolution or winding up of the Corporation and such distribution
shall have been distributed to the holders of the Receipts pursuant to Sections
4.01 or 4.02, as applicable.
If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the holders
thereof and shall not give any further notices (other than notice of such
termination) or perform any further acts under this Deposit Agreement, except
that the Depositary shall continue to collect dividends and other distributions
pertaining to Stock, shall sell rights, preferences or privileges as provided in
this Deposit Agreement and shall continue to deliver the Stock and any money and
other property represented by Receipts upon surrender thereof by the holders
thereof. At any time after the expiration of two years from the date of
termination, the Depositary may sell Stock then held hereunder at public or
private sale, at such places and upon such terms as it deems proper and may
thereafter hold the net proceeds of any such sale, together with any money and
other property held by it hereunder, without liability for interest, for the
benefit, pro rata in accordance with their holdings, of the holders of Receipts
that have not theretofore been surrendered. After making such sale, the
Depositary shall be discharged from all obligations under this Deposit Agreement
except to account for such net proceeds and money and other property.
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Upon the termination of this Deposit Agreement, the Corporation shall
be discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Registrar and any Depositary's Agent under
Sections 5.06 and 5.07.
ARTICLE VII.
MISCELLANEOUS.
SECTION 7.01. COUNTERPARTS. This Deposit Agreement may be executed in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.
SECTION 7.02. EXCLUSIVE BENEFIT OF PARTIES. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.03. INVALIDITY OF PROVISIONS. In case any one or more of
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. NOTICES. Any and all notices to be given to the
Corporation hereunder or under the Receipts shall be in writing and shall be
deemed to have been duly given if personally delivered or sent by mail, or by
telegram or facsimile transmission confirmed by letter, addressed to the
Corporation at:
ENSERCH Corporation
300 South St. Paul Street
Dallas, Texas 75201-5598
Attention: Treasurer
Facsimile No.: (214) 573-3351
or at any other address of which the Corporation shall have notified the
Depositary in writing.
Any and all notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or facsimile transmission
confirmed by letter, addressed to the Depositary at the Depositary's Office, at:
____________________________________
____________________________________
____________________________________
Attention: ________________________
Facsimile No.: ____________________
or at any other address of which the Depositary shall have notified the
Corporation in writing.
Any and all notices to be given to any record holder of a Receipt
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or
facsimile transmission confirmed by letter, addressed to such record holder at
the address of such record holder as it appears on the books of the
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Depositary, or if such holder shall have filed with the Depositary a written
request that notices intended for such holder be mailed to some other address,
at the address designated in such request.
Delivery of a notice sent by mail or by telegram or facsimile
transmission shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a telegram
or facsimile transmission) is deposited, postage prepaid, in a post office
letter box. The Depositary or the Corporation may, however, act upon any
telegram or facsimile transmission received by it from the other or from any
holder of a Receipt, notwithstanding that such telegram or facsimile
transmission shall not subsequently be confirmed by letter or as aforesaid.
SECTION 7.05. APPOINTMENT OF REGISTRAR. The Depositary may from time
to time appoint Depositary's Agents to act in any respect for the Depositary for
the purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will notify the Corporation of any such action.
SECTION 7.06. HOLDERS OF RECEIPTS ARE PARTIES. The holders of
Receipts from time to time shall be parties to this Deposit Agreement and shall
be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery thereof.
SECTION 7.07. GOVERNING LAW. THIS DEPOSIT AGREEMENT AND THE RECEIPTS
AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 7.08. INSPECTION OF DEPOSIT AGREEMENT. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agent and
shall be open to inspection during business hours at the Depositary's Office or
respective offices of the Depositary's Agent, if any, by any holder of a
Receipt.
SECTION 7.09. HEADINGS. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or the Receipts or to have any bearing upon the meaning
or interpretation of any provision contained herein or in the Receipts.
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IN WITNESS WHEREOF, the Corporation and the Depositary have duly
executed this Deposit Agreement and affixed their respective seals hereto as of
the day and year first above set forth, and all holders of Receipts shall become
parties hereto by and upon acceptance by them of delivery of Receipts issued in
accordance with the terms hereof.
ENSERCH CORPORATION
Attested by:
___________________________ By:____________________________
Name:
Title:
[SEAL]
Attested by: [______________________________]
___________________________ By:____________________________
Name:
Title:
[SEAL]
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Exhibit A
---------
[Form of Face of Depositary Receipt]
NUMBER DEPOSITARY SHARES
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES, EACH DEPOSITARY SHARE REPRESENTING A
[insert fraction] INTEREST IN ONE SHARE OF [insert designation of PREFERRED
STOCK], WITHOUT PAR VALUE
ENSERCH CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS
This Depositary Receipt is transferable in the City of __________
____________________, as Depositary (the "Depositary"), hereby certifies that
____________________ is the registered owner of _____________________ Depositary
Shares ("Depositary Shares"), each Depositary Share representing a [insert
fraction] interest in one share of [insert designation of stock], without par
value (the "Stock"), of ENSERCH Corporation, a Texas corporation (the
"Corporation"), on deposit with the Depositary, subject to the terms and
entitled to the benefits of the Deposit Agreement dated as of _______________,
199_____ (the "Deposit Agreement"), among the Corporation, the Depositary and
all holders from time to time of Depositary Receipts. By accepting this
Depositary Receipt, the holder hereof becomes a party to and agrees to be bound
by all the terms and conditions of the Deposit Agreement. This Depositary
Receipt shall not be valid or obligatory for any purpose or be entitled to any
benefits under the Deposit Agreement unless it shall have been executed by the
Depositary by the manual signature of a duly authorized officer or, if executed
in facsimile by the Depositary, countersigned by a Registrar in respect of the
Depositary Receipts by the manual signature of a duly authorized officer
thereof.
Dated: Depositary
By:_______________________________
Authorized Officer
Registrar
By: ______________________________
Authorized Officer
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[Form of Reverse of Depositary Receipt]
ENSERCH CORPORATION
ENSERCH Corporation will furnish without charge to each receipt holder
who so requests, a copy of the Deposit Agreement and a statement or summary of
the powers, designations, preferences and relative, participating, optional or
other specified rights of each class of stock or series thereof which ENSERCH
Corporation is authorized to issue and the qualifications, limitations or
restrictions of such preference and/or rights. Any such request should be
addressed to ENSERCH Corporation, 300 South St. Paul Street, Dallas, Texas
75201-5598, Attention: Treasurer.
____________________
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Depositary Receipt, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT -__________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors Act ____________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, ____________________ hereby sell(s), assign(s)
and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code and Social
Security or other identifying number of assignee)
___________________________________________________________ Depositary Shares
represented by the within Depositary Receipt and all rights thereunder and
do(es) hereby irrevocably constitute and appoint _________________________
Attorney to transfer the said Depositary Shares on the books of the within named
Depositary with full power of substitution in the premises.
Dated: _______________ Signature: _______________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Depositary Receipt in
every particular, without alteration or
enlargement or any change whatever.
Signature Guarantee
________________________________
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EXHIBIT 4.13
BYLAWS OF ENSERCH CORPORATION, A
CORPORATION INCORPORATED UNDER
THE LAWS OF THE STATE OF TEXAS
--------------------------------------
PURPOSE AND SCOPE OF BYLAWS
These Bylaws shall constitute the private laws of ENSERCH CORPORATION, a
corporation duly incorporated under the laws of the State of Texas (herein
called the "corporation"), for the administration and regulation of the affairs
of the corporation.
In the event any provision of these Bylaws is or may be in conflict with
any applicable law of the United States or the State of Texas, or of any order,
rule, regulation, decree or judgment of any governmental body or power or court
having jurisdiction over this corporation, or over the subject matter to which
such provision of these Bylaws applies or may apply, such provision of these
Bylaws shall be inoperative to the extent only that the operation thereof
unavoidably conflicts with such law or order, rule, regulation, decree or
judgment, and shall in all other respects be in full force and effect.
ARTICLE I
OFFICES
Section 1. The registered office of the corporation shall be at ENSERCH
Center, 300 South St. Paul, in the City of Dallas, County of Dallas, State of
Texas, and the registered agent of the corporation at such address shall be such
person as the Board of Directors may from time to time designate.
Section 2. The corporation may also have offices at such other places both
within and without the State of Texas as the Board of Directors may from time to
time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. All meetings of the shareholders shall be held at the
registered office of the corporation or at such other place either within or
without the State of Texas as shall be designated from time to time by the Board
of Directors.
Section 2. The annual meeting of the shareholders shall be held on the
second Tuesday of May in each year, at 10:00 A.M., for the election of a Board
of Directors and the transaction of such other business as may properly be
brought before the meeting.
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Section 3. Special meetings of the shareholders may be called by the
Chairman and President, the Board of Directors, or the holders of not less than
one-tenth of all the shares entitled to vote at the meetings. Business
transacted at all special meetings shall be confined to the objects stated in
the notice of meeting.
Section 4. Written or printed notice stating the place, day and hour of
the meeting, and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten (10) nor more
than sixty (60) days before the date of the meeting, either personally or by
mail, by or at the direction of the Chairman and President, the Corporate
Secretary, or the officer or person calling the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail addressed to the
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. The officer or agent having charge of the stock transfer books
for shares of the corporation shall make, at least ten (10) days before each
meeting of shareholders, a complete list of the shareholders entitled to vote at
such meeting or any adjournment thereof, arranged in alphabetical order, with
the address of and the number of shares held by each, which list, for a period
of ten (10) days prior to such meeting, shall be kept on file at the registered
office of the corporation and shall be subject to inspection by any shareholder
at any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. The
original stock transfer books shall be prima-facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.
Section 6. The holders of a majority of the shares issued and outstanding
and entitled to vote thereat, present in person or represented by written proxy,
shall constitute a quorum at all meetings of the shareholders for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified.
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Section 7. Each outstanding share, of any class, shall be entitled to as
many votes per share as the Articles of Incorporation shall provide, on each
matter submitted to a vote at a meeting of shareholders, except to the extent
that the voting rights of the shares of any class or classes are limited or
denied by the Articles of Incorporation or these Bylaws. The vote for the
election of Directors and, upon demand by any shareholder, the vote upon any
question before the meeting shall be by ballot. Cumulative voting is expressly
prohibited.
Section 8. At any meeting of the shareholders, every shareholder having
the right to vote shall be entitled to vote in person or by proxy executed in
writing by such shareholder or by his duly authorized attorney-in-fact. No
proxy shall be valid after eleven (11) months from the date of its execution
unless otherwise provided in the proxy. All proxies shall be revocable unless
expressly provided therein to be irrevocable and are coupled with an interest
and shall be filed with the Corporate Secretary of the corporation prior to or
at the time of the meeting at which they are to be voted.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the shares having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which, by express provision of the statutes or
of the Articles of Incorporation or of these Bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of such question. The shareholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 10. The Chairman and President shall preside at all meetings of
the shareholders. In his absence, an officer of the corporation designated by
the Board of Directors shall preside and perform the duties of the Chairman and
President at such meeting. He shall appoint two inspectors of voting to serve
at each such meeting. Before acting at any meeting, the inspectors shall be
sworn faithfully to execute their duties with strict impartiality and according
to the best of their ability. The inspectors shall determine the number of
shares outstanding, the voting power of each, the shares represented at the
meeting, the existence of a quorum, the qualification of the voters, the
authenticity, validity and effect of proxies, receive votes and ballots, hear
and determine all challenges and questions in any way arising in connection with
the vote, count and tabulate all votes and determine and announce the result of
the voting.
Section 11. At an annual meeting of the shareholders, only such business
shall be conducted as shall have been properly
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brought before the meeting. To be properly brought before an annual meeting,
business must be specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board, otherwise properly brought before the
meeting by or at the direction of the Board, or otherwise properly brought
before the meeting by a shareholder. In addition to any other applicable
requirements, for business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Corporate Secretary. To be timely, a shareholder's notice must be delivered
to or mailed and received at the principal executive offices of the corporation,
not less than fifty (50) days nor more than seventy-five (75) days prior to the
meeting; provided, however, that in the event that less than sixty-five (65)
days' notice or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must be so received
not later than the close of business on the 15th day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. A shareholder's notice to the Corporate Secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of the shareholder proposing such
business, (iii) the class and number of shares of the corporation which are
beneficially owned by the shareholder, and (iv) any material interest of the
shareholder in such business.
Notwithstanding anything in the Bylaws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Section 11; provided, however, that nothing in this Section 11
shall be deemed to preclude discussion by any shareholder of any business
properly brought before the annual meeting in accordance with said procedure.
The Chairman of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 11, and if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
Section 12. Only persons who are nominated in accordance with the
following procedures shall be eligible for election as Directors. Nominations
of persons for election to the Board of the corporation may be made at a meeting
of shareholders by or at the direction of the Board of Directors by any
nominating committee or person appointed by the Board or by any shareholder of
the corporation entitled to vote for the election of Directors
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at the meeting who complies with the notice procedures set forth in this Section
12. Such nominations, other than those made by or at the direction of the
Board, shall be made pursuant to timely notice in writing to the Corporate
Secretary. To be timely, a shareholder's notice shall be delivered to or mailed
and received at the principal executive offices of the corporation not less than
fifty (50) days nor more than seventy-five (75) days prior to the meeting;
provided, however, that in the event that less than sixty-five (65) days' notice
or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 15th day following the date on which
such notice of the date of the meeting was mailed or such public disclosure was
made. Such shareholder's notice to the Corporate Secretary shall set forth (a)
as to each person whom the shareholder proposes to nominate for election or re-
election as a Director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of capital stock of the corporation
which are beneficially owned by the person, and (iv) any other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of Directors pursuant to Rule 14a under the Securities
Exchange Act of 1934 as amended; and (b) as to the shareholder giving the notice
(i) the name and record address of shareholder and (ii) the class and number of
shares of capital stock of the corporation which are beneficially owned by the
shareholder. The corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the corporation to determine
the eligibility of such proposed nominee to serve as Director of the
corporation. No person shall be eligible for election as a Director of the
corporation unless nominated in accordance with the procedures set forth herein.
The Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
ARTICLE III
DIRECTORS
Section 1. The business and affairs of the corporation shall be managed by
its Board of Directors who may exercise all such powers of the corporation and
do all such lawful acts and things as are not by statute or by the Articles of
Incorporation or by these Bylaws directed or required to be exercised or done by
the shareholders.
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Section 2. The Board of Directors shall consist of not less than six
Directors, none of whom need be shareholders or residents of the State of Texas;
the exact number of Directors to be determined from time to time by resolution
adopted by the Board of Directors. A person shall be ineligible to be a
Director of the corporation after the date of the annual meeting of shareholders
of the corporation in the year in which such person's seventy-second birthday
occurs. The Directors shall be elected at the annual meeting of the
shareholders, except as provided in Section 4 of this Article III. Unless he
shall resign or become ineligible, each Director shall hold office until his
successor shall be elected and shall qualify.
Section 3. Any Director may resign at any time either by oral tender of
resignation at any meeting of the Board of Directors or by giving written notice
thereof to the Corporate Secretary. Resignations shall take effect when
tendered or at the time specified in the tender and, unless otherwise specified,
the acceptance of a resignation shall not be necessary to make it effective.
Section 4. Any Director may be removed either for or without cause, at any
special meeting of shareholders by the affirmative vote of the holders of record
of a majority of the shares present in person or by proxy at such meeting and
entitled to vote for such removal, if notice of the intention to act upon such
matter shall have been given in the notice calling for such meeting. Any
vacancy occurring in the Board of Directors may be filled by the affirmative
vote of a majority of the remaining Directors even though such remaining
Directors shall be less than a quorum of the Board of Directors. A Director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office. Any directorship to be filled by reason of an increase
in the number of directors may be filled by election at an annual meeting or at
a special meeting of shareholders called for that purpose or may be filled by
the Board of Directors for a term of office continuing until the next election
of one or more Directors by the shareholders; provided that the Board of
Directors may not fill more than two such directorships between any two
successive annual meetings of shareholders.
Section 5. The Board of Directors, by resolution adopted by a majority of
the full Board of Directors, may designate from among its members one or more
committees, each of which shall be comprised of one or more of its members, and
may designate one or more of its members as alternate members of any committee,
who may, subject to any limitations imposed by the Board of Directors, replace
absent or disqualified members at any meeting of that committee. Any such
committee, to the extent provided in such resolutions or in the Articles of
Incorporation or the
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Bylaws, shall have and may exercise all of the authority of the Board of
Directors, provided that no committee of the Board of Directors shall have the
authority of the Board of Directors in reference to: (1) amending the Articles
of Incorporation, except that a committee may, to the extent provided in the
resolution designating that committee or in the Articles of Incorporation or the
Bylaws, exercise the authority of the Board of Directors vested in it in
accordance with Article 2.13 of the Texas Business Corporation Act ("Act"); (2)
proposing a reduction of the stated capital of the Corporation in the manner
permitted by Article 4.12 of the Act; (3) approving a plan of merger or share
exchange of the Corporation; (4) recommending to the shareholders the sale,
lease, or exchange of all or substantially all of the property and assets of the
Corporation otherwise than in the usual and regular course of its business; (5)
recommending to the shareholders a voluntary dissolution of the Corporation or a
revocation thereof; (6) amending, altering, or repealing the Bylaws of the
Corporation or adopting new Bylaws of the Corporation; (7) filling vacancies in
the Board of Directors; (8) filling vacancies in or designating alternate
members of any such committee; (9) filling any directorship to be filled by
reason of an increase in the number of Directors; (10) electing or removing
officers of the Corporation or members or alternate members of any such
committee; (11) fixing the compensation of any member or alternate members of
such committee; or (12) altering or repealing any resolution of the Board of
Directors that by its terms provides that it shall not be so amendable or
repealable; and, unless such resolution designating a particular committee, the
Articles of Incorporation, or the Bylaws expressly so provide, no committee of
the Board of Directors shall have the authority to authorize a distribution or
to authorize the issuance of shares of the Corporation.
MEETINGS OF THE BOARD OF DIRECTORS
Section 6. The Directors of the corporation may hold their meetings, both
regular and special, either within or without the State of Texas.
Section 7. The first meeting of each newly elected Board of Directors
shall be held without further notice immediately following the annual meeting of
shareholders, and at the same place, unless by unanimous consent of the
Directors then elected and serving such time or place shall be changed.
Section 8. Regular meetings of the Board of Directors may be held with or
without notice at such time and place as shall from time to time be determined
by the Board of Directors.
Section 9. Special meetings of the Board of Directors may be called on
twenty-four (24) hours' notice to each Director, or
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such shorter period of time as the person calling the meeting deems appropriate
in the circumstances, either personally, or by mail, or by telegram; special
meetings shall be called by the Chairman and President or, in the event of the
inability of the Chairman and President to act, the Corporate Secretary in like
manner and on like notice on the written request of two Directors. Neither the
business to be transacted at, nor the purpose of, any special meeting need be
specified in a notice or waiver of notice.
Section 10. At all meetings of the Board of Directors the presence of a
majority of the Directors shall constitute a quorum for the transaction of
business and the act of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors. Any action
required or permitted to be taken at a meeting of the Board of Directors may be
taken without a meeting if a consent in writing, setting forth the action so
taken, is signed by all members of the Board of Directors. If a quorum shall
not be present at any meeting of Directors, the Directors present thereat may
adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 11. COMPENSATION OF DIRECTORS. The Board of Directors shall have
authority to establish, from time to time, the amount of compensation which
shall be paid to its members for their services as Directors.
ARTICLE IV
NOTICES
Section 1. Whenever under the provisions of the statutes or of the
Articles of Incorporation or of these Bylaws, notice is required to be given to
any Director or shareholder, and no provision is made as to how such notice
shall be given, it shall not be construed to mean personal notice, but any such
notice may be given in writing, by mail, postage prepaid, addressed to such
Director or shareholder at such address as appears on the books of the
corporation. Any notice required or permitted to be given by mail shall be
deemed to be given at the time when the same shall be thus deposited in the
United States mails as aforesaid.
Section 2. Whenever any notice is required to be given to any shareholder
or Director of the corporation under the provisions of the statutes or of the
Articles of Incorporation, or of these Bylaws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated in such notice, shall be equivalent to the giving of such
notice. Attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting, except when a Director attends a meeting for the express
purpose, in writing
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filed at the meeting, of objecting to the transaction of any business on the
grounds that the meeting is not lawfully called or held.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be a Chairman and
President, one or more Executive Vice Presidents, Senior Vice Presidents or Vice
Presidents, a General Counsel, a Controller, a Corporate Secretary and a
Treasurer, all of whom shall be elected by the Board of Directors. Any two or
more offices may be held by the same person. Each such officer shall have such
authority and perform such duties in the management of the corporation as may be
determined by resolution of the Board of Directors.
Section 2. The Board of Directors may elect or appoint such other officers
and agents as it shall deem necessary, who shall hold their offices for such
term and who shall have such authority and perform such duties as may be
prescribed by the Board of Directors or the Chairman and President. The power
to appoint such other officers and agents may be delegated by the Board of
Directors to the Chairman and President to the extent the Board may delineate by
resolution.
Section 3. Each officer of the corporation shall hold office until his
successor is chosen and qualified in his stead or until his death or until his
resignation, retirement or removal from office. Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment the best interests of the corporation will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
Section 4. THE CHAIRMAN AND PRESIDENT. The Chairman and President shall be
the chief executive officer of the corporation. He shall, subject to the
direction and control of the Board of Directors, be their representative and
medium of communication. He shall see that all orders, resolutions and policies
adopted by the Board of Directors are carried into effect. He shall preside at
all meetings of shareholders and at all meetings of the Board of Directors. He
shall be in complete charge with attendant responsibility and accountability of
the entire corporation and its affairs.
Section 5. EXECUTIVE VICE PRESIDENTS. Each Executive Vice President shall
have such powers and responsibilities, and shall perform such duties, as
delineated by the Board or by the
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Chairman and President. They shall be directly responsible to such officer as
the Chairman and President may from time to time prescribe.
Section 6. SENIOR VICE PRESIDENTS. Each Senior Vice President shall have
such powers and responsibilities, and shall perform such duties, as delineated
by the Board or by the Chairman and President. They shall be directly
responsible to such officer as the Chairman and President may from time to time
prescribe.
Section 7. THE GENERAL COUNSEL. The General Counsel shall have general
control over all matters of a legal nature concerning the corporation and shall
perform such duties as delineated by the Board or by the Chairman and President.
He shall be directly responsible to the Chairman and President in said
performance.
Section 8. VICE PRESIDENTS. Each Vice President shall have such powers
and responsibilities, and shall perform such duties, as may be delineated by the
Board or the Chairman and President. They shall be directly responsible to such
officer as the Chairman and President may from time to time prescribe.
Section 9. THE CONTROLLER. The Controller shall be in general control of
the accounts of the corporation, shall be responsible for the making of adequate
audits, shall prepare and interpret required accounting, financial and
statistical statements, and shall be directly responsible to such officer and
shall perform such other duties as the Board or Chairman and President may from
time to time prescribe.
Section 10. THE CORPORATE SECRETARY. The Corporate Secretary shall attend
all meetings of the Board of Directors and shareholders and act as secretary
thereof and shall record all votes and the minutes of all proceedings of the
Board of Directors and shareholders in a book for that purpose maintained and
kept in his custody. He shall keep in his custody the seal of the corporation
and shall in general perform all the duties incident to the office of Secretary
of a corporation. He shall act as Transfer Agent of the corporation and/or
Registrar of its capital stock and other securities; provided that the Board of
Directors may by resolution appoint one or more other persons or corporations as
Transfer Agents and/or Registrars or as Co-Transfer Agents and/or Co-Registrars.
He shall be directly responsible to such officer and shall perform such other
duties as the Board or Chairman and President may from time to time prescribe.
Section 11. THE TREASURER. The Treasurer shall have custody of all the
funds and securities of the corporation and shall keep
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full and accurate accounts of receipts and disbursements. He may endorse checks,
notes and other obligations on behalf of the corporation for collection and
shall deposit the same, together with all monies and other valuable effects, to
the credit of the corporation in banks or depositories as the Board of Directors
may designate by resolution or as may be established in accordance with Article
VIII of these Bylaws. He shall be directly responsible to such officer as the
Chairman and President may from time to time designate and shall perform all
duties incident to the office of Treasurer of a corporation or as the Board or
Chairman and President shall designate.
Section 12. ASSISTANT CORPORATE SECRETARY, ASSISTANT TREASURER, ASSISTANT
CONTROLLER. The Board of Directors may appoint one or more Assistant Corporate
Secretaries, Assistant Treasurers and Assistant Controllers and such other
appointive officers as may be appropriate and required. They shall be directly
responsible to such officer and shall perform such duties as the Board or
Chairman and President may from time to time designate.
ARTICLE VI
CERTIFICATES REPRESENTING SHARES
Section 1. The shares of stock of this corporation shall be deemed
personal estate, and shall be transferable only on the books of the corporation
in such manner as these Bylaws prescribe.
Section 2. Every shareholder in the corporation shall be entitled to have
a certificate or certificates representing the number of shares owned by him.
The certificates of shares of stock of the corporation shall be numbered and
shall be entered in the books of the corporation as they are issued. They shall
exhibit the holder's name and number of shares, and shall be signed by the
Chairman and President or a Vice President, and the Treasurer or an Assistant
Treasurer and bear the corporate seal; but the signatures of such officers and
the seal of the corporation upon such certificates may be facsimiles, engraved
or printed where such certificate is signed by a duly authorized Transfer Agent
or Co-Transfer Agent and a Registrar or Co-Registrar.
Section 3. The Board of Directors may make such rules and regulations as
it may deem expedient concerning the issue, transfer, conversion, and
registration of certificates for shares of the capital stock of the corporation.
Section 4. LOST CERTIFICATES. The Board of Directors may direct a new
certificate representing shares to be issued in place of any certificate
theretofore issued by the corporation
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alleged to have been lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate to be lost or destroyed. When
authorizing such issue of a new certificate, the Board of Directors, in its
discretion and as a condition precedent to the issuance thereof, may require the
owner of such lost or destroyed certificate, or his legal representative, to
advertise the same in such manner as it shall require and/or give the
corporation a bond in such form, in such sum, and with such surety or sureties
as it may direct as indemnity against any claim that may be made against the
corporation and its Transfer Agents and Registrars and its Co-Transfer Agents
and Co-Registrars with respect to the certificate alleged to have been lost or
destroyed.
Section 5. TRANSFER OF SHARES. Transfers of shares of stock shall be made
on the books of the corporation only by the person named in the certificate or
by attorney, lawfully constituted in writing, and upon surrender of the
certificate therefor.
Section 6. The Board of Directors may close the stock transfer books of
the corporation for a period not to exceed sixty (60) days for the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to receive payment of any
distribution and share dividend, or in order to make a determination of
shareholders for any purpose, provided that if such books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
shareholders' meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting. In lieu of so closing the stock transfer
books, the Board of Directors may fix a date in advance, not exceeding sixty
(60) days preceding the date of any meeting of shareholders, or the date for the
payment of any distribution and share dividend or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, as a record date for the respective determination of the
shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of any such distribution and share dividend, or to
any such allotment of rights, or to exercise rights in respect of any such
change, conversion or exchange of capital stock and in such case such
shareholders and only such shareholders as shall be shareholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such distribution and share dividend, or to
receive such allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares of stock on the books of the
corporation after any such record date fixed as aforesaid. In the absence of
any designation with respect thereto by the Board of Directors, the date upon
which the notice
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of a meeting is mailed or resolutions declaring a distribution and share
dividend are adopted shall be the record date for such determination in regard
to meetings of shareholders or declarations of distributions and share
dividends.
Section 7. The corporation shall be entitled to treat the holder of record
of any share or shares of stock as the holder in fact thereof and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such share on the part of any other person, whether or not it shall have express
or other notice thereof, save as expressly provided by the laws of Texas.
Section 8. BONDS, DEBENTURES AND EVIDENCES OF INDEBTEDNESS. Bonds,
debentures and other evidence of indebtedness of the corporation shall be signed
by the Chairman and President or any Vice President and the Treasurer or an
Assistant Treasurer and shall bear the corporate seal and when so executed shall
be binding upon the corporation, but not otherwise. The seal of the corporation
thereon may be facsimile, engraved or printed, and where any such bond,
debenture or other evidence of indebtedness is authenticated with the manual
signature of an authorized officer of the corporation or trustee appointed or
named by an indenture of trust or other agreement under which such security is
issued, the signature of any of the corporation's officers authorized to execute
such security may be facsimile.
Section 9. SIGNATURES ON SHARE CERTIFICATES, BONDS, DEBENTURES AND
EVIDENCES OF INDEBTEDNESS. In case any officer who signed, or whose facsimile
signature has been placed on any certificate representing shares of stock, bond,
debenture or evidence of indebtedness of this corporation shall cease to be an
officer of the corporation for any reason before the same has been issued or
delivered by the corporation, such certificate, bond, debenture or evidence of
indebtedness may nevertheless be issued and delivered as though the person who
signed it or whose facsimile signature had been placed thereon had not ceased to
be such officer.
ARTICLE VII
DEEDS AND OTHER INSTRUMENTS OF CONVEYANCE
Section 1. Deeds and other instruments of the corporation conveying land
or any interest in land shall be signed by the Chairman and President or a Vice
President or attorney-in-fact of the corporation when authorized by appropriate
resolution of the Board of Directors or shareholders, and when required by law,
shall be attested by the Corporate Secretary or an Assistant Corporate Secretary
and shall bear the corporate seal, and when so executed shall be binding upon
the corporation, but not otherwise.
13
<PAGE>
ARTICLE VIII
CHECKS, DRAFTS AND BILLS OF EXCHANGE
Section 1. The Chairman and President of the corporation may from time to
time establish General Bank Accounts, Depository Bank Accounts, and such Special
Bank Accounts as in his judgment may be needed in carrying on and dispatching
the business of the corporation. All checks, drafts and bills of exchange
issued in the name of the corporation and calling for the payment of money out
of said General Accounts, Depository Accounts, or Special Accounts of the
corporation shall be signed by the Controller or Assistant Controller, or such
agents and employees as the Chairman and President may from time to time
designate and authorize to sign for the Controller, and countersigned by the
Treasurer or any Assistant Treasurer, or such agents and employees as the
Chairman and President may from time to time designate and authorize to sign for
the Treasurer; and when so designated by the Chairman and President, the
signature of the Treasurer or an Assistant Treasurer may be affixed by the use
of a check-signing machine; provided that for the purpose of transferring funds
from any bank or depository at which the corporation has funds on deposit to any
other bank or depository of the corporation for credit to the corporation's
account, a form of check having plainly printed upon its face "DEPOSITORY
TRANSFER CHECK," and being by its wording payable to a bank or depository for
credit to the account of the corporation, is hereby authorized, and such checks
shall require no signature other than the name of the corporation printed at the
lower right corner; and further provided that checks, drafts and bills of
exchange issued in the name of the corporation in the amount of $5,000.00 or
less need bear only one signature and that being the signature of the Treasurer
or an Assistant Treasurer, affixed either manually or by the use of a check-
signing machine, or the manual signature of such agents and employees as the
Chairman and President may from time to time designate and authorize to sign for
the Treasurer; and provided further that checks and drafts issued in the name of
the corporation and calling for payment of money out of Special Bank Accounts
established for the payment of dividends need bear only one signature and that
being the signature of the Treasurer or an Assistant Treasurer, affixed either
manually or by the use of a check-signing machine, or the manual signature of
such agents and employees as the Chairman and President may from time to time
designate and authorize to sign for the Treasurer; and further provided that no
person authorized to sign checks or drafts may sign a check or draft payable to
himself. When signed in such applicable manner, but not otherwise, every check,
draft or bill of exchange issued in the name of the corporation and calling for
the payment of money out of the General Bank Accounts, Depository Bank Accounts,
and Special Bank Accounts of the corporation shall be valid and enforceable
according to its wording, tenor and effect, but not
14
<PAGE>
otherwise. Provided, however, that for the purpose of transferring funds
between accounts of the corporation, from accounts of the corporation to
accounts of subsidiaries and affiliates, from accounts of the corporation for
the purpose of investment of corporate funds, and from accounts of the
corporation for the payment of dividends, the Treasurer or an Assistant
Treasurer, or such agents and employees as the Chairman and President may from
time to time designate and authorize, may make such transfer of funds by bank
wire transfers through oral or written instructions; and for the purpose of
transferring funds from accounts of the corporation to accounts of other third
parties, such funds may be transferred by bank wire transfers but only upon
written instructions from the Treasurer or an Assistant Treasurer, or such
agents and employees as the Chairman and President may from time to time
designate and authorize to sign for the Treasurer, and countersigned by the
Controller or Assistant Controller, or such agents and employees as the Chairman
and President may from time to time designate and authorize to sign for the
Controller.
Section 2. The Treasurer of the corporation may establish special bank
accounts designated as Agent's Account in such bank or banks as in his judgment
may be needed in carrying on and dispatching the business of the corporation,
provided that the Treasurer in establishing and maintaining such accounts shall
keep only such funds therein and in such amount as may be required for the local
needs of such accounts and provided that checks or drafts issued against or
drawn on such accounts shall be valid and binding on the corporation according
to their wording, tenor and effect when signed by either the Treasurer of the
corporation or by such agent or employee of the corporation as may be designated
by the Treasurer in writing to such bank or when signed in such manner and by
such agent or employee of the corporation as may be designated by the Chairman
and President of the corporation; and further provided that checks and drafts
issued in the name of the corporation against funds in such Agent's Account in
the amount of $1,000.00 or more must be countersigned by two persons authorized
to sign such checks or drafts.
ARTICLE IX
FISCAL YEAR
Section 1. The fiscal year shall begin on the first day of January in each
year.
ARTICLE X
DISTRIBUTIONS AND SHARE DIVIDENDS
Section 1. Distributions and share dividends upon the outstanding shares
of the corporation, subject to the provisions
15
<PAGE>
of the Articles of Incorporation, if any, may be declared by the Board of
Directors at any regular or special meeting. Distributions may be paid in cash
or property, and share dividends may be paid in shares of the authorized but
unissued shares or in treasury shares, of the corporation subject to the
provisions of the Articles of Incorporation.
ARTICLE XI
RESERVES
Section 1. There may be created by resolution of the Board of Directors
out of the earned surplus of the corporation such reserve or reserves as the
Directors from time to time, in their discretion, think proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any property
of the corporation, or for such other purpose as the Directors shall think
beneficial to the corporation, and the Directors may modify or abolish any such
reserve in the manner in which it was created.
ARTICLE XII
SEAL
Section 1. The corporation's seal shall have inscribed thereon the name of
the corporation, the year of the organization and the words "Corporate Seal,
Texas." Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE XIII
INDEMNIFICATION
Section 1. The corporation shall indemnify any person who (1) is or was a
director, officer, employee or agent of the corporation, or (2) while a
director, officer, employee or agent of the corporation, its divisions or
subsidiaries, is or was serving at the request of the corporation, pursuant to a
resolution adopted by the Board of Directors, as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, to the fullest
extent that a corporation may or is required to grant indemnification to a
director under the Texas Business Corporation Act. The corporation, pursuant to
a resolution adopted by the Board of Directors, may indemnify any such persons
to such further extent as permitted by law.
ARTICLE XIV
AMENDMENTS
16
<PAGE>
Section 1. The power to alter, amend, suspend or repeal the Bylaws or to
adopt new Bylaws shall be vested in the Board of Directors; provided, however,
that any Bylaw or Amendment thereto as adopted by the Board of Directors may be
altered, amended, suspended or repealed by vote of the shareholders entitled to
vote for the election of Directors or a new Bylaw in lieu thereof may be adopted
by vote of such shareholders. No Bylaw which has been altered, amended or
adopted by such a vote of the shareholders may be altered, amended, suspended or
repealed by vote of the Directors until two years after such action by vote of
the shareholders.
17
<PAGE>
EXHIBIT 4.14
CERTIFICATE OF FORMATION
OF
Enserch Capital L.L.C.
This Certificate of Formation of Enserch Capital L.L.C. (the "LLC"), dated
March 4, 1994, is being duly executed and filed by ENSERCH Corporation, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. (S)18-101, et seq.)
FIRST. The name of the limited liability company formed hereby is Enserch
Capital L.L.C.
SECOND. The address of the registered office of the LLC in the State of
Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, New Castle County, Delaware 19801.
THIRD. The name and address of the registered agent for service of process
on the LLC in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801.
FOURTH. The latest date on which the LLC is to dissolve is March 31, 2069.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.
ENSERCH Corporation
By: /s/ S. R. Singer
Name: S. R. Singer
Title: Senior Vice President
<PAGE>
EXHIBIT 4.15
LIMITED LIABILITY COMPANY AGREEMENT
OF
Enserch Capital L.L.C.
This Limited Liability Company Agreement (this "Agreement") of Enserch
Capital L.L.C., is entered into between ENSERCH Corporation, a Texas
corporation, and Enserch Preferred Capital, Inc., a Delaware corporation, as
members (the "Members").
The Members hereby form a limited liability company pursuant to and in
accordance with the Delaware Limited Liability Company Act (6 Del.C. (S)18-101
et seq.), as amended from time to time (the "Act"), and hereby agree as follows:
1. Name. The name of the limited liability company formed hereby is
Enserch Capital L.L.C. (the "Company").
2. Purpose. The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is to issue
limited liability company preferred securities and to loan the proceeds thereof
to ENSERCH Corporation and to engage in any and all activities necessary or
incidental to the foregoing.
3. Registered Office. The address of the registered office of the Company
in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
4. Registered Agent. The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware is The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801.
5. Members. The names and the business, residence or mailing addresses of
the Members are as follows:
Name Address
---- -------
ENSERCH Corporation 300 South St. Paul Street
Dallas, Texas 75201
Enserch Preferred Capital, Inc. 300 South St. Paul Street
Dallas, Texas 75201
1
<PAGE>
6. Powers. The business and affairs of the Company shall be managed
by the Members. The Members shall have the power to do any and all acts
necessary or convenient to or for the furtherance of the purposes described
herein, including all powers, statutory or otherwise, possessed by members under
the laws of the State of Delaware. ENSERCH Corporation is hereby designated as
an authorized person, within the meaning of the Act, to execute, deliver and
file the certificate of formation of the Company (and any amendments and/or
restatements thereof), and any other certificates (and any amendments and/or
restatements thereof), necessary for the Company to qualify to do business in a
jurisdiction in which the Company may wish to conduct business. ENSERCH
Corporation is hereby authorized to execute any and all registration statements,
amendments and other documents related to the issuance and sale of any limited
liability preferred securities by the Company and to engage in any and all
activities necessary or incidental to the foregoing.
7. Dissolution. The Company shall dissolve, and its affairs shall be
wound up upon the first to occur of the following: (a) March 31, 2069, (b) the
written consent of the Members, (c) the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Member or the occurrence of any other
event which terminates the continued membership of a Member in the Company, or
(d) the entry of a decree of judicial dissolution under Section 18-802 of the
Act.
8. Capital Contributions. The Members have contributed the following
amounts, in cash, and no other property, to the Company:
ENSERCH Corporation $10.00
Enserch Preferred Capital, Inc. $10.00
9. Additional Contributions. No Member is required to make any
additional capital contribution to the Company.
10. Allocation of Profits and Losses. The Company's profits and losses
shall be allocated in proportion to the capital contributions of the Members.
11. Distributions. Distributions shall be made to the Members at the
times and in the aggregate amounts determined by the Members. Such distributions
shall be allocated among the Members in the same proportion as their then
capital account balances.
12. Assignments. A Member may not assign in whole or in part his
limited liability company interest.
13. Resignation. A Member may not resign from the Company.
2
<PAGE>
14. Admission of Additional Members.
One (1) or more additional members of the Company may be admitted
to the Company with the consent of the Members.
15. Liability of Members. The Members shall not have any liability
for the obligations or liabilities of the Company except to the extent provided
in the Act.
16. Governing Law. This Agreement shall be governed by, and
construed under, the laws of the State of Delaware, all rights and remedies
being governed by said laws.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, have duly executed this Limited Liability Company Agreement as of the
4th day of March, 1994.
ENSERCH Corporation
By: /s/ S. R. Singer
Name: S. R. Singer
Title: Senior Vice President
Enserch Preferred Capital, Inc.
By: /s/ S. R. Singer
Name: S. R. Singer
Title: Senior Vice President
3
<PAGE>
EXHIBIT 5.1
ENSERCH Corporation
ENSERCH Center W. T. Satterwhite
300 South St. Paul Senior Vice President
Dallas, Texas 75201 and General Counsel
Telephone 214/651-8700
March 7, 1994
ENSERCH Corporation
ENSERCH Center
300 South St. Paul Street
Dallas, TX 75201
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933,
as amended (the "Act"), of up to $450,000,000 of (i) senior or subordinated debt
securities (the "Debt Securities") of ENSERCH Corporation (the "Corporation")
which, in the case of subordinated Debt Securities, may be convertible into the
Corporation's Common Stock, $4.45 par value (the "Common Stock"), (ii) shares of
preferred stock (the "Preferred Stock") of the Corporation, which may be issued
in the form of depositary shares (the "Depositary Shares") evidenced by
depositary receipts (the "Depositary Receipts"), (iii) shares of Common Stock of
the Corporation on a Registration Statement on Form S-3 (the "Registration
Statement") and (iv) preferred limited liability company interests ("EC
Preferred Securities") of Enserch Capital L.L.C. ("Enserch Capital"), I, as
General Counsel for the Corporation, have examined such corporate records,
certificates and other documents and have reviewed such questions of law as I
have considered necessary or appropriate for purposes of the opinion expressed
below.
Based on such examination and review, I hereby advise you that, in my
opinion:
1. When (i) the Registration Statement has become effective under the
Act and the Senior Debt Indenture, dated as of February 15, 1992 (the "Senior
Indenture"), between the Corporation and The First National Bank of Chicago, as
trustee, and the Subordinated Debt Indenture (the "Subordinated Indenture", and
together with the Senior Indenture, the "Indentures"), to be entered into
between the Corporation and The First National Bank of Chicago, as trustee (the
"Subordinated Trustee"), have been qualified under the Trust Indenture Act of
1939, as amended, (ii) with respect to subordinated Debt Securities, the
Subordinated Indenture has been duly executed and delivered by the Corporation
and the Subordinated Trustee, (iii) the Debt Securities have been duly created,
issued and authenticated in accordance with all necessary corporate
authorizations and in accordance with the terms of the relevant indenture and
(iv) the Debt Securities have been
<PAGE>
delivered and paid for as contemplated by the Registration Statement and any
prospectus supplement relating thereto and in accordance with the relevant
Indenture, the Debt Securities will be legally issued by the Corporation and
will be valid and binding obligations of the Corporation subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting the enforcement of creditor's rights and to general equity
principles.
2. When (i) the Registration Statement has become effective under the
Act, (ii) the terms of the Preferred Stock and of their issuance and sale have
been duly established in conformity with the Corporation's Restated Articles of
Incorporation, as amended, so as not to violate any applicable law or result in
a default under or breach of any agreement or instrument binding upon the
Corporation and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Corporation, (iii) a
Statement of Resolution fixing and determining the terms of the Preferred Stock
in the form to be filed as an exhibit to the Registration Statement is filed
with the Secretary of State of the State of Texas, and (iv) the Preferred Stock
has been duly issued and sold as contemplated by the Registration Statement and
any prospectus supplement relating thereto, against payment of the consideration
fixed therefor by the Board of Directors or a duly authorized committee thereof,
the Preferred Stock will be validly issued, fully paid and nonassessable.
3. When (i) the Registration Statement has become effective under the
Act, (ii) the deposit agreement relating to the Depositary Shares has been duly
executed and delivered by the Corporation and the depositary, (iii) the terms of
the Depositary Shares and of their issuance and sale have been duly established
in conformity with the deposit agreement relating to such Depositary Shares so
as not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, (iv) the Preferred Stock which is
represented by Depositary Shares is validly issued and delivered to the
depositary as contemplated in paragraph 2 above, and (v) the Depository Receipts
evidencing the Depositary Shares are duly issued against the deposit of the
Preferred Stock in accordance with the deposit agreement, the Depositary Shares
will be validly issued.
4. When (i) the Registration Statement has become effective under the
Act, (ii) the terms of the issuance and sale of the Common Stock have been duly
established in conformity with the Corporation's Restated Articles of
Incorporation, as amended, so as not to violate any applicable law or result in
a default under or breach of any agreement or instrument binding upon the
Corporation and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the
<PAGE>
Corporation, and (iii) the Common Stock has been duly issued and sold as
contemplated by the Registration Statement and any prospectus supplement
relating thereto, against payment of the consideration fixed therefor by the
Board of Directors or a duly authorized committee thereof, the Common Stock
(including any shares of Common Stock duly issued upon the conversion of
subordinated Debt Securities) will be validly issued, fully paid and
nonassessable.
5. When (a) the terms of the Backup Undertakings, as defined, of the
Corporation relating to the EC Preferred Securities have been duly established
in accordance with applicable law, (b) the instruments relating to the Backup
Undertakings have been duly authorized, executed and delivered, (c) the
Registration Statement has become effective and any applicable state securities
or Blue Sky laws have been complied with, (d) the EC Preferred Securities to
which any of the Backup Undertakings relate have been duly issued and sold and
the purchase price therefor has been received by Enserch Capital and (e) the
Corporation has received the consideration, if any, separately payable for such
Backup Undertakings, the Backup Undertakings will constitute valid and legally
binding obligations of the Corporation, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditor's rights and to general equity principles. To the extent the foregoing
opinion in this paragraph (5) involves matters of Delaware law, I have relied
upon the opinion dated March 7, 1994, of Richards, Layton & Finger.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Opinions" in the Prospectus forming a part of the Registration Statement. In
giving such consent, I do not admit that I am in the category of persons whose
consent is required under Section 7 of the Act.
Very truly yours,
/s/ W. T. Satterwhite
W.T. Satterwhite
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
March 7, 1994
Enserch Capital L.L.C.
ENSERCH Center
300 South St. Paul Street
Dallas, Texas 75201
Re: Enserch Capital L.L.C.
----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Enserch Capital L.L.C., a
Delaware limited liability company (the "Company"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of copies of the following:
(a) The Certificate of Formation of the Company, dated March 4, 1994
(the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on March 4, 1994;
(b) The Limited Liability Company Agreement of the Company, dated as of
March 4, 1994 (the "Original Agreement"), between ENSERCH
<PAGE>
Enserch Capital L.L.C.
March 7, 1994
Page 2
Corporation, a Texas corporation ("Enserch"), and Enserch Preferred
Capital, Inc., a Texas corporation ("Enserch Preferred"), as members of the
Company;
(c) A registration statement (the "Registration Statement") on Form
S-3, including a related preliminary prospectus (the "Prospectus"), filed
by ENSERCH Corporation and the Company with the Securities and Exchange
Commission on March 7, 1994; and
(d) A Certificate of Good Standing for the Company, dated March 7,
1994, obtained from the Secretary of State.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (d) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (d) above) that is referred to in or incorporated by reference into the
Registration Statement. We assume that there exists no provision in any document
that we have not reviewed that is inconsistent with the opinions stated herein.
We have conducted no independent factual investigation of our own but rather
have relied solely upon the foregoing documents, the statements and information
set forth therein and the additional matters recited or assumed herein, all of
which we have assumed to be true, complete and accurate in all material
respects.
With respect to all documents examined by us, we have assumed that (i) all
signatures on documents examined by us are genuine, (ii) all documents submitted
to us as originals are authentic, and (iii) all documents submitted to us as
copies conform with the original copies of those documents.
For purposes of this opinion, we have assumed (i) except to the extent
provided in paragraph 1 below, the due organization or due formation, as the
case may be, and valid existence in good standing of each party to the documents
examined by us under the laws of the jurisdiction governing its organization or
formation, (ii) the legal capacity of natural persons who are parties to the
documents examined by us, (iii) that each of the parties to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (iv) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
and (v) that the Company at all times will not be treated as a corporation for
purposes of United States income taxation. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
In rendering the opinion in paragraph 2 below, we have assumed that (i) an
appropriate form of amended and restated limited liability company agreement of
the
<PAGE>
Enserch Capital L.L.C.
March 7, 1994
Page 3
Company (the "LLC Agreement") is duly authorized, executed and delivered by
Enserch and Enserch Preferred, as members of the Company, (ii) the LLC Agreement
properly amends and restates the Original Agreement in its entirety, (iii) the
Company at all times has at least two members (within the meaning of the
Delaware Limited Liability Company Act (6 Del. C. (S)18-101, et seq.) (the
"Act")), (iv) the LLC Agreement provides for the issuance of a class of limited
liability company interests in the Company (the "EC Preferred Securities") to
persons and entities (other than Enserch and Enserch Preferred) who have taken a
legally sufficient act resulting in their becoming duly admitted to the Company
as members of the Company in accordance with the LLC Agreement (each, a
"Preferred Member" and collectively, the "Preferred Members"), (v) payment by
each Preferred Member to the Company of the full consideration due from it under
the LLC Agreement for the EC Preferred Securities acquired by it, and (vi) the
EC Preferred Securities are duly issued to the Preferred Members in accordance
with the LLC Agreement and the Registration Statement.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Company has been duly formed and is validly existing in good
standing as a limited liability company under the Act.
2. Upon issuance and payment as contemplated by the LLC Agreement, the
EC Preferred Securities will represent valid and, subject to the
qualifications set forth herein, will be fully paid and nonassessable
limited liability company interests in the Company, as to which the
Preferred Members, in their capacity as members of the Company, will have
no liability solely by reason of being Preferred Members in excess of their
obligations to make payments that may be provided for in the LLC Agreement
and their share of the Company's assets and undistributed profits (subject
to the obligation of a Preferred Member to repay any funds wrongfully
distributed to it).
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. We hereby consent to the
use
<PAGE>
Enserch Capital L.L.C.
March 7, 1994
Page 4
of our name under the heading "Legal Opinions" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or relied upon by, any
other person or entity for any purpose.
Very truly yours,
WF/PMA/JGL/sc
<PAGE>
Exhibit 12
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- -------- -------- --------
(In thousands except ratios)
<S> <C> <C> <C> <C> <C>
Fixed Charges, as Defined:
Consolidated interest expense......... $ 80,226 $ 97,050 $ 95,627 $101,452 $ 94,937
Rentals representing the
interest factor...................... 5,826 6,453 6,775 5,361 5,075
-------- -------- -------- -------- --------
Consolidated fixed charges
deducted from earnings............... 86,052 103,503 102,402 106,813 100,012
Capitalized interest.................. 7,006 6,578 7,466 8,366 8,665
-------- -------- -------- -------- --------
Fixed Charges, as Defined 1/......... 93,058 110,081 109,868 115,179 108,677
Preferred stock dividends adjusted
for pretax earnings coverage 2/...... 12,663 12,952 21,019 19,457 19,008
-------- -------- -------- -------- --------
Combined Fixed Charges and
Preferred Stock Dividends............ $105,721 $123,033 $130,887 $134,636 $127,685
======== ======== ======== ======== ========
Earnings, as Defined:
Consolidated income (loss) from
continuing operations before
extraordinary items.................. $(14,712) $ 3,514 $ 37,774 $ 69,418 $ 64,315
Income taxes:
Consolidated......................... 7,472 (808) 17,748 25,611 21,572
Proportional part of income taxes
of unconsolidated entities and
50% owned affiliates................ (71) (12)
Consolidated fixed charges deducted
from earnings........................ 86,052 103,503 102,402 106,813 100,012
Amortization of previously
capitalized interest................. 7,707 6,547 6,130 5,615 5,063
-------- -------- -------- -------- --------
Earnings, as Defined 1/............... $ 86,448 $112,744 $164,054 $207,457 $190,962
======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges 3/.. .93 1.02 1.49 1.80 1.76
======== ======== ======== ======== ========
Ratio of Earnings to Combined
Fixed Charges and Preferred Stock
dividends 4/.......................... .82 .92 1.25 1.54 1.50
======== ======== ======== ======== ========
</TABLE>
1/ "Earnings" represent the aggregate of (a) income from continuing operations
before extraordinary items, (b) income taxes, (c) amortization of previously
capitalized interest and (d) fixed charges deducted from earnings, on a total
enterprise basis. "Fixed Charges" represent interest expense, capitalized
interest and the portion of rental expense representing the interest factor.
2/ The preferred stock dividend requirements are assumed to be equal to the
pretax earnings which would be required to cover such dividend requirements.
The amount of such pretax earnings required to cover preferred stock
dividends was computed using tax rates for the applicable year. For the
years 1993 and 1992, the Corporation's effective tax rate was a negative
percentage of the pretax income or loss. Therefore, for these years, the
preferred stock dividends have not been adjusted to a pretax equivalent,
since such an adjustment would have been antidilutive to the ratio of
earnings to combined fixed charges and preferred dividends.
3/ For 1993, fixed charges exceeded earnings by $6.6 million.
4/ For the years 1993 and 1992, combined fixed charges and preferred stock
dividends exceeded earnings by $19.3 million and $10.3 million, respectively.
<PAGE>
EXHIBIT (15)
ENSERCH Corporation:
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim condensed
consolidated financial information of ENSERCH Corporation and subsidiary
companies for the periods ended March 31, 1993 and 1992, June 30, 1993 and 1992
and September 30, 1993 and 1992, as indicated in our reports dated April 27,
1993, and August 2, 1993 and October 25, 1993, 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 your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993, June 30,
1993 and September 30 1993, are being used 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.
DELOITTE & TOUCHE
Dallas, Texas
March 4, 1994
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
ENSERCH Corporation:
We consent to the incorporation by reference in this Registration Statement of
ENSERCH Corporation on Form S-3 of our report dated February 7, 1994 appearing
in the Current Report on Form 8-K dated March 3, 1994 of ENSERCH Corporation and
of our reports dated February 8, 1993 appearing in the Annual Report on Form
10-K of ENSERCH Corporation for the year ended December 31, 1992. We also
consent to the reference to us under the heading "Experts" in the Prospectus,
which is part of this Registration Statement.
DELOITTE & TOUCHE
Dallas, Texas
March 4, 1994
<PAGE>
EXHIBIT 23.2
DeGolyer and MacNaughton
One Energy Square
Dallas, Texas 75206
March 4, 1994
ENSERCH Corporation
ENSERCH Center
300 South St. Paul
Dallas, Texas 75201
Gentlemen:
We hereby consent to (a) the use of information from our "Report as of
January 1, 1993 on Proved Reserves of Certain Properties in Scurry County, Texas
owned by ENSERCH Corporation," "Report as of January 1, 1993 on Proved and
Probable Reserves of Certain Properties owned by EP Operating Company," and
"Report as of January 1, 1993, on Certain Proved Reserves of Natural Gas Liquids
contracted to Enserch Processing, Inc." and to reference to us in "Properties"
appearing in Part I, and to the reference to us in Note 12 of the Notes to
Consolidated Financial Statements appearing in Appendix A, of your Annual Report
on Form 10-K for the fiscal year ended December 31, 1992, and to the reference
to us in Note 13 of the Notes to Consolidated Financial Statements for the
fiscal year ended December 31, 1993, appearing in your Current Report on Form
8-K dated on or about March 4, 1994, which includes our updated reserve
estimates, as of January 1, 1994.
Very truly yours,
DeGolyer and MacNaughton
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director or officer or
both, as the case may be, of the Corporation, does hereby appoint W. T.
Satterwhite or S. R. Singer, and each of them severally, his true and lawful
attorney or attorneys with power to act with or without the other and with full
power of substitution and resubstitution, to execute in his name, place and
stead in his capacity as a director, officer or both, as the case may be, of the
Corporation, said Form S-3 and any and all amendments thereto and all
instruments necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ D. W. Biegler
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ William B. Boyd
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ B. A. Bridgewater, Jr.
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
26th day of February, 1994.
/s/ Lawrence E. Fouraker
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ Preston M. Geren, Jr.
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ Marvin J. Girouard
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of March, 1994.
/s/ Joseph M. Haggar, Jr.
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ W. C. McCord
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in her capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, her true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in her name, place and stead in her capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ Diana S. Natalicio
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as a
director of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
8th day of February, 1994.
/s/ W. Ray Wallace
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as an officer of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as an officer of the
Corporation, said Form S-3 and any and all amendments thereto and all
instruments necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
16th day of February, 1994.
/s/ S. R. Singer
<PAGE>
POWER OF ATTORNEY
WHEREAS, ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-3, including a Prospectus, with such amendment or amendments thereto in each
case as may be necessary or appropriate, together with any and all exhibits and
other documents having relation to said Form S-3 in connection with the
registration of debt and/or equity securities of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as an officer of the
Corporation, does hereby appoint D. W. Biegler, W. T. Satterwhite or S. R.
Singer, and each of them severally, his true and lawful attorney or attorneys
with power to act with or without the other and with full power of substitution
and resubstitution, to execute in his name, place and stead in his capacity as
an officer of the Corporation, said Form S-3 and any and all amendments thereto
and all instruments necessary or incidental in connection therewith and to file
the same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
16th day of February, 1994.
/s/ J. W. Pinkerton
<PAGE>
EXHIBIT 25.1
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 FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
ENSERCH CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
TEXAS 75-0399066
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ENSERCH CENTER
300 SOUTH ST. PAUL STREET
DALLAS, TEXAS 75201
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
SENIOR DEBT SECURITIES
(TITLE OF 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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago and State of
Illinois,on the 15th day of February, 1994.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
By /S/ STEVEN M. WAGNER
VICE PRESIDENT
*Exhibits 1, 2, 3, and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 26(b) to the Registration Statement on Form S-3 of
Dow Capital B.V. and The Dow Chemical Company, filed with the Securities and
Exchange Commission on June 3, 1991 (Registration No. 33-36314).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 15, 1994
Securities and Exchange Commission,
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between ENSERCH Corporation
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ Steven M. Wagner
Vice President
4
<PAGE>
EXHIBIT 7
A copy of the latest report of conditions of the trustee published pursuant to
law or the requirements of its supervising or examining authority.
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: First National Bank of Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1993
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN C400 {-
------------ -----
THOUSANDS RCFD BIL MIL THOU
-------------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RCA-A):
a. Noninterest-bearing balances and
currency and coin(1)............................ 0081 6,140,040 1.a.
b. Interest-bearing balances(2).................... 0071 6,078,671 1.b.
2. Securities (from Schedule RC-B).................... 0390 580,723 2
3. Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and its Edge and Agreement subsidiaries, and
in IBFs:
a. Federal Funds sold.............................. 0276 3,134,457 3.a.
b. Securities purchased under agreements
to resell....................................... 0277 252,650 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C)............................ RCFD 2122 13,404,247 4.a.
b. LESS: Allowance for loan and lease losses....... RCFD 3123 343,005 4.b.
c. LESS: Allocated transfer risk reserve........... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b
and 4.c)........................................ 2125 13,061,242 4.d.
5. Assets held in trading accounts.................... 2146 2,202,246 5.
6. Premises and fixed assets (including capitalized
leases)............................................ 2145 500,925 6.
7. Other real estate owned (from Schedule RC-M)....... 2150 111,329 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M).......... 2130 14,491 8.
9. Customers' liability to this bank on acceptances
outstanding........................................ 2155 552,637 9.
10. Intangible assets (from Schedule RC-M)............. 2143 155,975 10.
11. Other assets (from Schedule RC-F).................. 2160 2,847,290 11.
12. Total assets (sum of items 1 through 11)........... 2170 35,632,676 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: First National Bank of Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
-------------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of
columns A and C from Schedule RC-E, part 1)..... RCON 2200 14,261,174 13.a.
(1) Noninterest-bearing(1)...................... RCON 6631 6,124,322 13.a.(1)
(2) Interest-bearing............................ RCON 6636 8,136,852 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule RC-E,
part II)........................................ RCFN 2200 10,168,389 13.b.
(1) Noninterest bearing......................... RCFN 6631 2,339,236 13.b.(1)
(2) Interest-bearing............................ RCFN 6636 7,829,153 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased......................... RCFD 0278 2,411,666 14.a.
b. Securities sold under agreements to repurchase.. RCFD 0279 7,738 14.b.
15. Demand notes issued to the U.S. Treasury........... RCON 2840 102,420 15.
16. Other borrowed money............................... RCFD 2850 1,871,318 16.
17. Mortgage indebtedness and obligations under
capitalized leases................................. RCFD 2910 267,000 17.
18. Bank's liability on acceptance executed and
outstanding........................................ RCFD 2920 552,637 18.
19. Subordinated notes and debentures.................. RCFD 3200 1,175,000 19.
20. Other liabilities (from Schedule RC-G)............. RCFD 2930 2,196,402 20.
21. Total liabilities (sum of items 13 through 20)..... RCFD 2948 33,013,744 21.
22. Limited-Life preferred stock and related surplus... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus...... RCFD 3838 0 23.
24. Common stock....................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred
stock)............................................. RCFD 3839 2,249,790 25.
26. a. Undivided profits and capital reserves.......... RCFD 3632 169,255 26.a.
b. LESS: Net unrealized loss on marketable equity
securities...................................... RCFD 0297 0 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (971) 27.
28. Total equity capital (sum of items 23 through 27).. RCFD 3210 2,618,932 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28)... RCFD 3300 35,632,676 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1992................. RCFA 6724 N/A M.1.
</TABLE>
1 = Independent audit of the bank 4. = Directors' examination of the bank
conducted in accordance with performed by other external
generally accepted auditing auditors (may be required by state
standards by a certified public chartering authority)
accounting firm which submits a
report on the bank
2 = Independent audit of the bank's 5 = Review of the bank's financial
parent holding company conducted statements by external auditors
in accordance with generally
accepted auditing standards by a 6 = Compilation of the bank's
certified public accounting firm financial statements
which submits a report on the by external auditors
consolidated holding company
(but not on the bank separately) 7 = Other audit procedures (excluding
3 = Directors' examination of the tax preparation work)
bank conducted in accordance with
generally accepted auditing 8 = No external audit work
standards by a certified public
accounting firm (may be required
by state chartering authority)
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
<PAGE>
EXHIBIT 25.2
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 FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
ENSERCH CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
TEXAS 75-0399066
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ENSERCH CENTER
300 SOUTH ST. PAUL STREET
DALLAS, TEXAS 75201
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
SUBORDINATED DEBT SECURITIES
(TITLE OF 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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 15th day of February,
1994.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
By /S/ STEVEN M. WAGNER
VICE PRESIDENT
*Exhibits 1, 2, 3, and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26(b) to the Registration Statement on
Form S-3 of Dow Capital B.V. and The Dow Chemical Company, filed with the
Securities and Exchange Commission on June 3, 1991 (Registration No. 33-
36314).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 15, 1994
Securities and Exchange Commission,
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between ENSERCH Corporation
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ Steven M. Wagner
Vice President
4
<PAGE>
EXHIBIT 7
A copy of the latest report of conditions of the trustee published pursuant to
law or the requirements of its supervising or examining authority.
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: First National Bank of Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1993
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN C400 {-
------------ -----
THOUSANDS RCFD BIL MIL THOU
-------------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RCA-A):
a. Noninterest-bearing balances and
currency and coin(1)............................ 0081 6,140,040 1.a.
b. Interest-bearing balances(2).................... 0071 6,078,671 1.b.
2. Securities (from Schedule RC-B).................... 0390 580,723 2
3. Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and its Edge and Agreement subsidiaries, and
in IBFs:
a. Federal Funds sold.............................. 0276 3,134,457 3.a.
b. Securities purchased under agreements
to resell....................................... 0277 252,650 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C)............................ RCFD 2122 13,404,247 4.a.
b. LESS: Allowance for loan and lease losses....... RCFD 3123 343,005 4.b.
c. LESS: Allocated transfer risk reserve........... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b
and 4.c)........................................ 2125 13,061,242 4.d.
5. Assets held in trading accounts.................... 2146 2,202,246 5.
6. Premises and fixed assets (including capitalized
leases)............................................ 2145 500,925 6.
7. Other real estate owned (from Schedule RC-M)....... 2150 111,329 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M).......... 2130 14,491 8.
9. Customers' liability to this bank on acceptances
outstanding........................................ 2155 552,637 9.
10. Intangible assets (from Schedule RC-M)............. 2143 155,975 10.
11. Other assets (from Schedule RC-F).................. 2160 2,847,290 11.
12. Total assets (sum of items 1 through 11)........... 2170 35,632,676 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: First National Bank of Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
-------------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of
columns A and C from Schedule RC-E, part 1)..... RCON 2200 14,261,174 13.a.
(1) Noninterest-bearing(1)...................... RCON 6631 6,124,322 13.a.(1)
(2) Interest-bearing............................ RCON 6636 8,136,852 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule RC-E,
part II)........................................ RCFN 2200 10,168,389 13.b.
(1) Noninterest bearing......................... RCFN 6631 2,339,236 13.b.(1)
(2) Interest-bearing............................ RCFN 6636 7,829,153 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased......................... RCFD 0278 2,411,666 14.a.
b. Securities sold under agreements to repurchase.. RCFD 0279 7,738 14.b.
15. Demand notes issued to the U.S. Treasury........... RCON 2840 102,420 15.
16. Other borrowed money............................... RCFD 2850 1,871,318 16.
17. Mortgage indebtedness and obligations under
capitalized leases................................. RCFD 2910 267,000 17.
18. Bank's liability on acceptance executed and
outstanding........................................ RCFD 2920 552,637 18.
19. Subordinated notes and debentures.................. RCFD 3200 1,175,000 19.
20. Other liabilities (from Schedule RC-G)............. RCFD 2930 2,196,402 20.
21. Total liabilities (sum of items 13 through 20)..... RCFD 2948 33,013,744 21.
22. Limited-Life preferred stock and related surplus... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus...... RCFD 3838 0 23.
24. Common stock....................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred
stock)............................................. RCFD 3839 2,249,790 25.
26. a. Undivided profits and capital reserves.......... RCFD 3632 169,255 26.a.
b. LESS: Net unrealized loss on marketable equity
securities...................................... RCFD 0297 0 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (971) 27.
28. Total equity capital (sum of items 23 through 27).. RCFD 3210 2,618,932 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28)... RCFD 3300 35,632,676 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1992................. RCFA 6724 N/A M.1.
</TABLE>
1 = Independent audit of the bank 4. = Directors' examination of the bank
conducted in accordance with performed by other external
generally accepted auditing auditors (may be required by state
standards by a certified public chartering authority)
accounting firm which submits a
report on the bank
2 = Independent audit of the bank's 5 = Review of the bank's financial
parent holding company conducted statements by external auditors
in accordance with generally
accepted auditing standards by a 6 = Compilation of the bank's
certified public accounting firm financial statements
which submits a report on the by external auditors
consolidated holding company
(but not on the bank separately) 7 = Other audit procedures (excluding
3 = Directors' examination of the tax preparation work)
bank conducted in accordance with
generally accepted auditing 8 = No external audit work
standards by a certified public
accounting firm (may be required
by state chartering authority)
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
