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TXU GAS COMPANY
OFFICER'S CERTIFICATE
Laura Conn, the Treasurer of TXU Gas Company formerly ENSERCH
Corporation (the "Company"), pursuant to the authority granted in the Board
Resolutions of the Company dated August 2, 1999, and Sections 102, 201 and
301 of the Indenture defined herein, does hereby certify to The Bank of New
York (the "Trustee"), as Trustee under the Indenture of the Company (For
Unsecured Debt Securities) dated as of January 1, 1998, as supplemented (the
"Indenture") that:
1. The Securities of the third series to be issued under the Indenture
shall be designated "Putable Asset Term Securities, Putable/Callable
October 15, 2002" (the "PATS"). All capitalized terms used in this
certificate which are not defined herein shall have the meanings set
forth in Exhibit A hereto; all capitalized terms used in this
certificate which are not defined herein or in Exhibit A hereto
shall have the meanings set forth in the Indenture.
2. The PATS shall mature and the principal thereof shall be due and
payable, together with all accrued and unpaid interest thereon, on
October 15, 2012, provided, however, that this scheduled maturity
date shall be extended, if the Company exercises its Floating Period
Option, to a date not later October 15, 2013.
3. The PATS shall have such terms and provisions as are provided in the
form thereof set forth in Exhibit A hereto and shall be issued in
substantially such form.
4. The PATS shall bear interest as provided in Exhibit A.
The amount of interest payable on the PATS will be computed on the
basis of a 360-day year consisting of twelve 30-day months, except
that the interest accruing during the Floating Rate Period, if any,
will be computed on the basis of the actual number of days in such
period over a 360-day year.
5. The principal and each installment of interest on the PATS shall be
payable at the office or agency of the Company in The City of New
York; provided that payment of interest may be made at the option of
the Company by check mailed to the address of the persons entitled
thereto or by wire transfer to an account designated by the person
entitled thereto; and provided further that so long as the PATS are
registered in the name of The Depository Trust Company ("DTC"), or
its nominee as discussed below, all payments of principal and
interest in respect of the PATS will be made in immediately
available funds. Notices and demands to or upon the Company in
respect of the PATS may be served at the office or agency of the
Company in The City of New York. The Corporate Trust Office of the
Trustee will initially be the agency of the Company for such payment
and service of notices and demands and the Company hereby appoints
The Bank of New York as its agent for all such purposes; provided,
however, that the Company reserves the right to change, by one or
more Officer's Certificates, any such office or agency and such
agent. The registration and registration of transfers and exchanges
in respect of the PATS may be effected at the offices of TXU
Business Services Company in Dallas, Texas. TXU Business Services
Company will initially be the Security Registrar and the Trustee
will initially be the Paying Agent for the PATS.
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6. The Trustee, the Security Registrar and the Company will have no
responsibility under the Indenture for transfers of beneficial
interests in the PATS, for any depository records of beneficial
interests or for any transactions between the depository and
beneficial owners.
7. In certain circumstances described in the form of the PATS set forth
in Exhibit A hereto, the Trustee will be required, for and on behalf
of the Holders of the PATS, to exercise the Put Option.
8. Initially the PATS will be issued in global form registered in the
name of Cede & Co. (as nominee for DTC, the initial securities
depositary for the PATS), and may bear such legends as DTC may
reasonably request. So long as the PATS are held solely in global
form, the Regular Record Date shall be the Business Day immediately
preceding the relevant Interest Payment Date; if the PATS are
registered in the names of additional Holders, the Company shall
have the right to select a Regular Record Date for such PATS, which
shall be at least one Business Day but not more than 15 Business
Days prior to the relevant Interest Payment Date. So long as the
PATS are Outstanding in global form registered in the name of DTC or
its nominee, all payments of principal and interest will be made by
the Company in immediately available funds. In case the Company
shall be required to repurchase the PATS held by DTC or its nominee,
payment will be made by the Company by book entry through DTC by
2:00 p.m. New York City time on the applicable Coupon Reset Date
against delivery through DTC of such PATS.
9. No service charge shall be made for the registration of transfer or
exchange of the PATS; provided, however, that the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with the
exchange or transfer.
10. If the Company shall make any deposit of money and/or Eligible
Obligations with respect to any PATS, or any portion of the
principal amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's Certificate
described in clause (z) in the first paragraph of said Section 701
unless the Company shall also deliver to the Trustee, together with
such Officer's Certificate, either:
(A) an instrument wherein the Company, notwithstanding
the satisfaction and discharge of its indebtedness in respect of the
PATS, shall assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee or Paying
Agent such additional sums of money, if any, or additional Eligible
Obligations (meeting the requirements of Section 701), if any, or
any combination thereof, at such time or times, as shall be
necessary, together with the money and/or Eligible Obligations
theretofore so deposited, to pay when due the principal of and
premium, if any, and interest due and to become due on such PATS or
portions thereof, all in accordance with and subject to the
provisions of said Section 701; provided, however, that such
instrument may state that the obligation of the Company to make
additional deposits as aforesaid shall be subject to the delivery to
the Company by the Trustee of a notice asserting the deficiency
accompanied by an opinion of an independent public accountant of
nationally recognized standing, selected by the Trustee, showing the
calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a
result of a change in law occurring after the date of this
certificate, the Holders of such PATS, or portions of the principal
amount thereof, will not recognize income, gain or loss for United
States federal income tax purposes as a result of the satisfaction
and discharge of the Company's indebtedness in respect thereof and
will be subject to United States federal income tax on the same
amounts, at the same times and in the same manner as if such
satisfaction and discharge had not been effected.
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11. The undersigned has read all of the covenants and conditions
contained in the Indenture relating to the issuance of the PATS, and
the definitions in the Indenture relating thereto, and compliance in
respect of which this certificate is made.
12. The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents
accompanying this certificate, and upon discussions by the
undersigned with officers and employees of the Company familiar with
the matters set forth herein.
13. In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed
opinion as to whether or not such covenants and conditions have been
complied with.
14. Such conditions and covenants and conditions precedent, if any
provided for in the Indenture (including any covenants compliance
with which constitutes a condition precedent), relating to the
authentication and delivery of the PATS as requested in the
accompanying Company Order 3-D-3 have been complied with.
IN WITNESS WHEREOF, I have executed this Officer's Certificate this
17th day of October, 2000.
/s/ Laura Conn
------------------------------
Laura Conn
Treasurer
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EXHIBIT A
[depository legend]
[Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Company or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]
[FORM OF FACE OF PUTABLE ASSET TERM SECURITY]
CUSIP No. 873170 AA 2
TXU GAS COMPANY
PUTABLE ASSET TERM SECURITIES
PUTABLE/CALLABLE OCTOBER 15, 2002
Scheduled Maturity Date: October 15, 2012 (subject to extension no later than
October 15, 2013, as provided herein)
Initial Interest Rate: 7 5/8
Initial Coupon Reset Date: October 15, 2002
Initial Interest Payment Dates: April 15 and October 15
TXU GAS COMPANY, a corporation duly organized and existing
under the laws of the State of Texas (herein referred to as the "Company",
which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to or registered assigns, the principal sum
of ____________________ Dollars ($_____) on the Scheduled Maturity Date,
which shall be extended if the Company exercises its Floating Period Option,
and to pay interest on said principal sum semi-annually on each Initial
Interest Payment Date commencing April 15, 2001, at the Initial Interest Rate
per annum, during the period from and including October 17, 2000 to but
excluding the Initial Coupon Reset Date. After the Initial Coupon Reset Date,
interest will be payable at the rate determined by the Calculation Agent in
accordance with the procedures set forth on the reverse hereof, under the
caption "Tender of the Securities of this Series; Remarketing" until the
principal hereof is paid or made available for payment. The interest on the
Securities of this series accruing from the Initial Coupon Reset Date (if
such date is not the Floating Rate Coupon Reset Date) or from the Floating
Period Termination Date (if the Initial Coupon Reset Date is the Floating
Rate Coupon Reset Date) will be payable semi-annually on each day that is a
six-month anniversary of such date (such days, the Floating Rate Interest
Payment Dates, and the Initial Interest Payment Dates, to and including the
Initial Coupon Reset Date, are sometimes referred to as the "Interest Payment
Dates"). The interest accruing
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during any Floating Rate Reset Period will be payable on the next following
Reference Reset Date if such date is a Business Day or on the next following
Business Day. Prior to the Initial Coupon Reset Date, interest on the
Securities of this series will accrue from October 17, 2000, to the first
Initial Interest Payment Date, and thereafter will accrue from the last
Initial Interest Payment Date to which interest has been paid or duly
provided for. In the event that any Interest Payment Date is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of such delay), with the same force and effect as if made
on the Interest Payment Date. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the Business Day next preceding
the corresponding Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities of this series not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture
referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in The City of New York, the State of New York in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts, provided,
however, that, at the option of the Company, interest on this Security may be
paid by check mailed to the address of the person entitled thereto, as such
address shall appear on the Security Register or by wire transfer to an
account designated by the person entitled thereto; and provided further, that
so long as the Securities of this series are registered in the name of The
Depository Trust Company or a nominee thereof, all payments of principal and
interest in respect of the Securities of this series will be made in
immediately available funds.
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. Any
capitalized term which is used herein and not otherwise defined shall have
the meaning ascribed to such term on the reverse hereof under the caption
"Definitions" or in the Indenture.
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.
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IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TXU GAS COMPANY
By:
------------------------------------
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------------
Authorized Signatory
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[FORM OF REVERSE OF PUTABLE ASSET TERM 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 (For Unsecured Debt
Securities), dated as of January 1, 1998 (herein, together with any
amendments thereto, called the "Indenture", which term shall have the meaning
assigned to it in such instrument), between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby made to the
Indenture, including the Board Resolutions and Officer's Certificate filed
with the Trustee on October 17, 2000 creating the series designated on the
face hereof, for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders
of the Securities and of the terms upon which the Securities are, and are to
be, authenticated and delivered.
Any capitalized term used herein and not otherwise
defined shall have the meaning ascribed to such term under the caption
"Definitions" below or in the Indenture.
The Company has assigned to UBS AG, London Branch, as
Callholder the right to purchase the Securities of this series from the
Holders on October 15, 2002, in whole but not in part (the "Call Option"), in
exchange for an amount equal to the Call Price. The Callholder may at any
time assign its rights and obligations under the Call Option; PROVIDED that
(i) such rights and obligations are assigned in whole and not in part, and
(ii) such assigning Callholder provides the Company (unless the Company is a
participant in the assignment) and the Trustee with written notice of such
assignment contemporaneously with such assignment. Upon receipt of notice of
assignment, the Trustee shall treat the assignee as the Callholder for all
purposes hereunder. A Callholder may assign its rights under the Call Option
without notice to, or consent of, the Holders of the Securities of this
series.
If the Callholder elects to remarket the Securities
of this series, except in the limited circumstances described herein, (i) the
Securities of this series will be subject to mandatory tender to the
Callholder, on the terms and subject to the conditions described herein, and
(ii) on and after any Coupon Reset Date, the Securities of this series will
bear interest at the applicable rate determined by the Calculation Agent in
accordance with the procedures set forth below.
TENDER OF THE SECURITIES OF THIS SERIES; REMARKETING
CALL OPTION
On a Business Day not earlier than 20 Business Days
prior to the Initial Coupon Reset Date, and not later than 4:00 p.m., New
York City time, on the 15th Business Day prior to the Initial Coupon Reset
Date, the Callholder will irrevocably notify the Company and the Trustee as
to whether it elects to purchase the Securities of this series for
remarketing. If the Callholder so elects, the Securities of this series will
be subject to mandatory tender, and will be deemed tendered, to the
Callholder for purchase and remarketing, and the Callholder will be obligated
to purchase and remarket the Securities of this series, on the Initial Coupon
Reset Date and, if the Company chooses to exercise its Floating Period
Option, on the Floating Period Termination Date, in accordance with the terms
and subject to the conditions described herein.
On the Fixed Rate Coupon Reset Date, the Securities
of this series will be remarketed by the Callholder at a fixed rate of
interest equal to the Interest Rate to Maturity. If the Securities of this
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series are so remarketed, the maturity of the Securities of this series will
be automatically extended to the tenth anniversary of the Fixed Rate Coupon
Reset Date. If the Company so elects, the Securities of this series will bear
interest at the Floating Period Interest Rate until the Floating Period
Termination Date, at which time the Securities of this series will be
remarketed at a fixed rate of interest equal to the Interest Rate to Maturity
unless the Company is required to redeem, the Securities of this series.
The call price of the tendered Securities of this
series will be equal to 100% of their aggregate principal amount on the
Initial Coupon Reset Date, or the Dollar Price on the Floating Period
Termination Date. In the event of exercise of the Call Option, then (i) not
later than 12:00 noon, New York City time, on the Initial Coupon Reset Date
or the Floating Period Termination Date, as the case may be, the Callholder
will deliver the call price in immediately available funds to the Trustee for
payment of the call price on that Coupon Reset Date and (ii) the Holders of
the Securities of this series will be required to deliver the Securities of
this series to the Callholder against payment therefor on that Coupon Reset
Date through the facilities of DTC.
If the Callholder elects to exercise the Call Option, the
obligation of the Callholder to pay the call price and the corresponding
obligation of the Trustee to deliver the Securities of this series to the
Callholder pursuant to exercise of the Call Option is subject to automatic
termination events described below.
AUTOMATIC TERMINATION
The Call Option will automatically and immediately terminate
without any further action by the Callholder, Company or Trustee, and the
Trustee will exercise the Put Option on behalf of the Holders, upon the
occurrence of any one or more of the following events:
(i) at any time, an Event of Default with respect to
the PATS under Section 801(d) or (e) of the Indenture;
(ii) if the Call Notice has been timely given, then
after the fourth Business Day prior to a Coupon Reset Date until 12:00 noon,
New York City time, on such Coupon Reset Date, a Market Disruption Event
shall have occurred and the effect of such event is such as to make it
impracticable, in the reasonable judgment of the Callholder set forth in a
written notice given to the Company, or undesirable, in the opinion of the
Company set forth in a written notice given to the Callholder, to remarket
the PATS at a fixed rate or floating rate or to enforce contracts for the
sale of the PATS;
(iii) after the Call Notice is given, no Dealer shall
have provided a timely Bid for the PATS in the manner described under
"Determination of Applicable Interest Rate" below; and
(iv) at any time, a legal defeasance or covenant
defeasance with respect to the PATS shall have occurred.
OPTIONAL TERMINATION
The Call Option will immediately terminate upon the election of
the Callholder set forth in a written notice given to the Company following
the occurrence of any one or more of the following events at any time:
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(i) an Event of Default with respect to the PATS
under Section 801(a), (b), (c) or (f) of the Indenture;
(ii) (A) an event of default with respect to any
Senior Indebtedness of the Company other than the PATS (as such event of
default is defined in any notes, indenture, credit agreement, or other
similar document relating to such Senior Indebtedness) which shall have
resulted in such Senior Indebtedness being accelerated or similarly declared
due and payable under such document before it would otherwise have been due
and payable or (B) a default in making one or more payments aggregating at
least $2,000,000 more than ten Business Days after the due date thereof under
documents relating to Senior Indebtedness (after giving effect to any
applicable notice requirement or grace period) shall have occurred and be
continuing; provided, however, that notwithstanding the foregoing, an event
of default or default shall not be deemed to occur under either (A) or (B)
above if, as demonstrated to the reasonable satisfaction of the Callholder,
(a) the event or condition referred to in (A) or the failure to pay referred
to in (B) is a failure to pay caused by an error or omission of an
administrative or operational nature; and (b) funds were available to such
party to enable it to make the relevant payment when due; and (c) such
relevant payment is made within three Business Days following receipt of
written notice from an interested party of such failure to pay; and
(iii) any or all of the PATS shall have been
purchased or redeemed by the Company prior to the Initial Coupon Reset Date.
"Senior Indebtedness" with respect to the PATS shall mean
indebtedness of the Company for borrowed money ranking senior or equal to the
PATS in an aggregate principal amount of at least $50,000,000.
The Company will promptly notify the Trustee in
writing of any termination of the Call Option.
No Holder shall have any rights or claims against the
Callholder as a result of the Callholder purchasing or not purchasing the
Securities of this series. No Holder has the right to consent or object to
the Trustee's duty to exercise the Put Option.
If the Callholder elects to exercise the Call Option,
on the applicable Coupon Reset Date the Callholder will sell the aggregate
principal amount of the Securities of this series at the Dollar Price to the
Reference Corporate Dealer or to the Reference Money Market Dealer, whichever
is applicable, providing the lowest Fixed or Floating Rate Bid, in the case
of the Initial Coupon Reset Date, or the lowest Fixed Rate Bid, in the case
of the Floating Period Termination Date. If the lowest applicable Bid is
submitted by two or more of the applicable Reference Dealers, the Callholder
will sell the Securities of this series to one or more of such Reference
Dealers, as it will determine in its sole discretion.
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If for any reason the Callholder does not purchase
the Securities of this series on the relevant Coupon Reset Date, the Company
will be required to redeem the Securities of this series at a price equal to
100% of their aggregate principal amount, plus accrued and unpaid interest,
if any, if such Coupon Reset Date is the Initial Coupon Reset Date, or at the
Dollar Price, plus accrued and unpaid interest, if any, on the Floating
Period Termination Date. See "Put Option" below.
PUT OPTION
If the Call Option has not been exercised, or in the
event the Callholder is not required or fails to deliver the call price to
the Trustee not later than 12:00 noon, New York City time, on the relevant
Coupon Reset Date, the Trustee will be required for and on behalf of the
Holders of the Securities of this series to exercise the option to put the
Securities of this series to the Company pursuant to the terms hereof ("Put
Option"). Upon exercise of the Put Option, the Company will be required to
purchase all of the Securities of this series on the applicable Coupon Reset
Date at a purchase price equal to 100% of the aggregate principal amount of
the Securities of this series, if such Coupon Reset Date is the Initial
Coupon Reset Date, or at the Dollar Price if such Coupon Reset Date is the
Floating Period Termination Date (in each case, the "Put Redemption Price").
The Put Option will be exercised automatically by the Trustee, on behalf of
the Holders, if the Call Option has not been exercised, or in the event the
Callholder is not required or fails to deliver the call price to the Trustee.
If the Trustee exercises the Put Option, the Company will deliver the Put
Redemption Price to the Trustee, together with the accrued and unpaid
interest due on the applicable Coupon Reset Date, by no later than 2:00 p.m.,
New York City time, on the Coupon Reset Date, and the Holders of the
Securities of this series will be required to deliver the Securities of this
series to the Company against payment therefor on the Coupon Reset Date
through the facilities of DTC. No Holder of any Note or any interest therein
has the right to consent or object to the Trustee's duty to exercise the Put
Option.
DETERMINATION OF APPLICABLE INTEREST RATE
If the Callholder elects to purchase the Securities
of this series, then by 3:30 p.m., New York City time, on the third Business
Day immediately preceding any Coupon Reset Date, the Calculation Agent will
determine either (a) the Floating Rate Spread, in the case of the Initial
Coupon Reset Date where the Company has elected to exercise its Floating
Period Option, or (b) the Interest Rate to Maturity, to the nearest one
hundredth of one percent per year, unless the Company is required to redeem
the Securities of this series. Each Floating Period Interest Rate will equal
the sum of a Reference Rate and the Floating Rate Spread. The Interest Rate
to Maturity will equal the sum of the Base Rate (5.820%) and the Applicable
Spread, which will be based on the Dollar Price of the Securities of this
series. The Floating Period Interest Rate, the Interest Rate to Maturity and
the Dollar Price for the Securities of this series as announced by the
Calculation Agent, absent manifest error, will be binding and conclusive upon
the beneficial owners, the Company and the Trustee.
Following the Callholder's election to purchase the
Securities of this series in connection with the Initial Coupon Reset Date,
but prior to the Floating Period Notification Date, which will be the fourth
Business Day prior to the Initial Coupon Reset Date, the Company may elect to
exercise its Floating Period Option. If the Company so elects, the Securities
of this series will bear interest at the Floating Period Interest Rate until
the Floating Period Termination Date, which will be the earlier of October
15, 2003, or the date which otherwise would be the Reference Rate Reset Date
following the Floating Period Termination Notification Date. The Floating
Period Termination Notification Date will be at least four Business Days
prior to such Reference Rate Reset Date. In the event that the Company
exercises its Floating Period Option, the maturity date of the Securities of
this series will be extended to
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the tenth anniversary of the Floating Period Termination Date, which will not
be later than October 15, 2013. The amount of interest payable for each day
that the Securities of this series are outstanding during the Floating Rate
Period will be calculated by dividing the Floating Period Interest Rate in
effect for such day by 360 and multiplying the result by the Dollar Price.
The amount of interest payable for any Floating Rate Reset Period will be
calculated by adding the interest payable for each day in the Floating Rate
Reset Period.
If the Callholder has exercised the Call Option, the
Company and the Calculation Agent will complete the following steps in order
to determine each Coupon Reset Rate. The Company and the Calculation Agent
will use reasonable efforts to cause the actions set forth below to be
completed in as timely a manner as possible.
(a) The Company will provide the Calculation Agent with a list,
no later than five Business Days prior to the Coupon Reset Date, containing
the names and addresses of up to five Reference Corporate Dealers or
Reference Money Market Dealers, as the case may be, from which it desires the
Calculation Agent to obtain Fixed Rate Bids or Floating Rate Bids for the
purchase of the Securities of this series.
(b) Within one Business Day following receipt by the Calculation
Agent of the dealer list referred to above, the Calculation Agent will
provide to each dealer on that list: (i) a copy of the prospectus dated
October 18, 1999 and a copy of the prospectus supplement dated October 12,
2000 relating to the offering of the Securities of this series; (ii) a copy
of the form of the Securities of this series; and (iii) a written request
that each dealer submit a Fixed Rate Bid or Floating Rate Bid, as the case
may be, to the Calculation Agent by 3:30 p.m., New York City time ("Bid
Deadline"), on the third Business Day prior to the Coupon Reset Date ("Bid
Date"). Each Dealer will be provided with: (i) the name of the Company; (ii)
an estimate of the Dollar Price; (iii) the principal amount and maturity of
the Securities of this series; and (iii) the method by which interest will be
calculated on the Securities of this series.
(c) Following receipt of the bids, the Calculation Agent will
provide written notice to the Company of: (i) the name of each of the dealers
from whom the Calculation Agent received bids on the Bid Date; (ii) the bid
submitted by each of those dealers; and (iii) the Dollar Price.
(d) Immediately after calculating the Coupon Reset Rate, the
Calculation Agent will provide written notice of that Coupon Reset Rate to
the Company, the Trustee and the dealer submitting the lowest applicable bid.
SETTLEMENT
In the event that the Securities of this series are
purchased by the Callholder, the Callholder will pay to the Trustee, in same
day funds not later than 12:00 noon, New York City time, on the Initial
Coupon Reset Date, an amount equal to 100% of the aggregate principal amount
of the Securities of this series, or on the Floating Period Termination Date,
an amount equal to the Dollar Price.
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On any such Coupon Reset Date, the Callholder will
cause the Trustee to make payment of the purchase price for the tendered
Securities of this series that have been purchased for remarketing by the
Callholder to DTC for payment to the DTC participant of each tendering
beneficial owner of Securities of this series. This payment will be made
against delivery through DTC of the beneficial owner's Securities of this
series by book-entry through DTC by the close of business on the Coupon Reset
Date.
The purchase price of the tendered Securities of this
series will be equal to 100% of their aggregate principal amount, on the
Initial Coupon Reset Date, and the Dollar Price, on the Floating Period
Termination Date. The Company will make, or cause the Trustee to make,
payment of interest to DTC for payment to each beneficial owner of the
Securities of this series, due on a Coupon Reset Date by book-entry through
DTC, by the close of business on such Coupon Reset Date.
The transactions described above will be executed on
the applicable Coupon Reset Date through DTC in accordance with the
procedures of DTC, and the accounts of the respective Participants will be
debited and credited, and the Securities of this series delivered by
book-entry as necessary to effect the purchases and sales thereof.
All payments of principal and interest in respect of
the Securities of this series in book-entry form will be made in immediately
available funds. The Securities of this series will trade in DTC's Same-Day
Funds Settlement System until the maturity date, Coupon Reset Date or the
post-coupon reset redemption date, as the case may be, or until the
Securities of this series are issued in definitive form. Secondary market
trading activity in the Securities of this series will be required by DTC to
settle in immediately available funds.
The tender and settlement procedures described above,
including the provisions for payment to selling beneficial owners of tendered
Securities of this series, or for payment by the purchasers of Securities of
this series, in a remarketing, may be modified to the extent required by DTC
or, if the book-entry system is no longer available for the Securities of
this series at the time of a remarketing, to the extent required to
facilitate the tendering and remarketing of Securities of this series in
certificated form. In addition, the Callholder may modify the settlement
procedures set forth above in order to facilitate the settlement process.
As long as DTC or its nominee holds a certificate
representing the Securities of this series in the book-entry system of DTC,
no certificates for the Securities of this series will be delivered to any
beneficial owner. In addition, the Company agrees to (1) use its reasonable
best efforts to maintain the Securities of this series in book-entry form
with DTC or any successor thereto, and to appoint a successor depositary to
the extent necessary to maintain the Securities of this series in book-entry
form, and (2) waive any discretionary right it otherwise has under its
Indenture to cause the Securities of this series to be issued in certificated
form.
THE CALCULATION AGENT
The Company shall appoint a calculation agent with
respect to the Securities of this series (the "Calculation Agent") which
initially shall be UBS Warburg LLC. The Calculation Agent shall incur no
liability for, or in respect of, any action taken, omitted to be taken or
suffered by it in such capacity in reliance upon any certificate, affidavit,
instruction, notice, request, direction, order, statement or other paper,
document or communication reasonably believed by it to be genuine. Any order,
certificate, affidavit, instruction, notice, request, direction, statement or
other communication from the Company
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made or given by it and sent, delivered or directed to the Calculation Agent
under, pursuant to, or as permitted by, any provision of the Indenture shall
be sufficient for purposes of the Indenture if such communication is in
writing and signed by any officer or attorney-in-fact of the Company. The
Calculation Agent may consult with counsel satisfactory to it, and the advice
of such counsel shall constitute full and complete authorization and
protection of such Calculation Agent with respect to any action taken,
omitted to be taken or suffered by it hereunder in good faith and in
accordance with and in reliance upon the advice of such counsel.
The Calculation Agent, in its individual capacity,
may, as if it were not the Calculation Agent, (i) buy, sell, hold and deal in
Securities of this series and may exercise any vote or join in any action
which any Holder of Securities of this series may be entitled to exercise or
take or (ii) engage in any financial or other transaction with the Company or
any of its Affiliates.
In acting in connection with the Securities of this
series, the Calculation Agent shall be obligated only to perform such duties
as are specifically set forth herein, and no other duties or obligations on
the part of the Calculation Agent, in its capacity as such, shall be implied
by the Indenture. In acting under the Indenture, the Calculation Agent in its
capacity as such does not assume any obligation towards, or any relationship
of agency or trust for or with the Holders of the Securities of this series.
The Calculation Agent may resign at any time as
Calculation Agent, such resignation to be effective 10 Business Days after
the delivery to the Company and the Trustee of written notice of such
resignation. In such case, the Company shall appoint a successor Calculation
Agent. In addition, the Company may at any time remove the existing
Calculation Agent and appoint a successor Calculation Agent if Reasonable
Cause exists at such time by giving written notice to the existing
Calculation Agent and the Trustee and specifying the date when the
termination shall become effective. "Reasonable Cause" shall mean the failure
or inability of the existing Calculation Agent to perform any obligations it
may have hereunder for any reason.
Any successor Calculation Agent appointed by the
Company shall execute and deliver to the predecessor Calculation Agent, the
Company and the Trustee an instrument accepting such appointment and
thereupon the successor Calculation Agent shall, without any further act or
instrument, become vested with all the rights, immunities, duties and
obligations of the initial Calculation Agent, with like effect as if
originally named as initial Calculation Agent hereunder, and the predecessor
Calculation Agent shall thereupon be obligated to deliver, and the successor
Calculation Agent shall be entitled to receive, copies of any available
records maintained by the predecessor Calculation Agent in connection with
the performance of its obligations hereunder. The Company shall notify the
Trustee in writing upon any such appointment.
The Company shall indemnify and hold harmless the
Calculation Agent and any successor thereof, and its officers and employees,
from and against all actions, claims, damages, liabilities, losses and
reasonable expenses (including reasonable legal fees and reasonable
disbursements) relating to or arising out of actions or omissions of the
Calculation Agent hereunder, except actions, claims, damages, liabilities,
losses and expenses caused by the bad faith, negligence or willful misconduct
of the Calculation Agent or its officers or employees. This subsection shall
survive the termination of the Indenture and the payment in full of all
obligations under the Securities of this series, whether by redemption,
repayment or otherwise.
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Notwithstanding any other provision of the Indenture,
the rights and obligations of the Calculation Agent hereunder are those of
the Calculation Agent and its legal successors. Any entity into which the
Calculation Agent may be merged, converted or consolidated, or any entity
resulting from any merger, conversion or consolidation to which the
Calculation Agent may be a party, or any entity to which the Calculation
Agent may sell or otherwise transfer all or substantially all of its
business, shall, to the extent permitted by applicable law, automatically
succeed the Calculation Agent.
REDEMPTION
If the Callholder elects to remarket the Securities
of this series on a Coupon Reset Date, the Securities of this series will be
subject to mandatory tender to the Callholder for remarketing on such date,
subject to the conditions described above under "Tender of Securities of this
Series; Remarketing".
After the Fixed Rate Coupon Reset Date, the
Securities of this series are redeemable, in whole or in part, at any time,
at the Company's option, at a redemption price calculated by an Independent
Banker, and equal to the greater of: (i) 100% of the principal amount of the
Securities of this series then outstanding to be redeemed, or (ii) the sum of
the present values of the remaining scheduled payments of principal and
interest thereon from the redemption date to the maturity date computed by
discounting to the applicable redemption date on a semiannual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury
Rate, which will be calculated on the third Business Day prior to the
redemption date, plus 30 basis points as calculated by an Independent
Investment Banker. The Company will mail notice of redemption at least 30
days but not more than 60 days before the applicable redemption date to each
holder of the Securities of this series to be redeemed. If the Company elects
to partially redeem the Securities of this series, the Trustee will select in
a fair and appropriate manner the Securities of this series to be redeemed.
The redemption price determined by the Independent Investment Banker, absent
manifest error, shall be binding and conclusive upon the Holders of the
Securities of this series, the Company and the Trustee.
Upon payment of the redemption price, interest will
cease to accrue on and after the applicable redemption date on the Securities
of this series or portions thereof called for redemption.
GENERAL
The Indenture contains provisions for defeasance at
any time of the entire indebtedness of this Security upon compliance with
certain conditions set forth in the Indenture, including the Officer's
Certificate described above.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of all series to
be affected. The Indenture contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities of all series then
Outstanding to waive compliance by the Company with certain provisions of the
Indenture. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each
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series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right to institute
any proceeding with respect to the Indenture or for the appointment of a
receiver or trustee or for any other remedy thereunder, unless such Holder
shall have previously given the Trustee written notice of a continuing Event
of Default with respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all series at the
time Outstanding in respect of which an Event of Default shall have occurred
and be continuing shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from
the Holders of a majority in aggregate principal amount of Securities of all
series at the time Outstanding in respect of which an Event of Default shall
have occurred and be continuing a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall
not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
any premium and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $1,000. As provided in
the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor and of authorized
denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered
as the absolute owner hereof for all purposes, whether or not this Security
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
All terms used in this Security which are not defined
herein and are defined in the Indenture shall have the meanings assigned to
them in the Indenture and in the Officer's Certificate establishing the terms
of the Securities of this series.
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DEFINITIONS
Set forth below are definitions of certain
capitalized terms used herein.
"Adjusted Treasury Rate" means, with respect to any
post-coupon reset redemption date: (i) the yield, under the heading which
represents the average for the immediately preceding week, appearing in the
most recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Board of Governors of
the Federal Reserve System and which establishes yields on actively traded
U.S. Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Post-Coupon Reset Comparable Treasury Issue (if no maturity is within three
months before or after the remaining term of the Securities of this series,
yields for the two published maturities most closely corresponding to the
Post-Coupon Reset Comparable Treasury Issue will be determined and the
Adjusted Treasury Rate will be interpolated or extrapolated from such yields
on a straight line basis, rounding to the nearest month); or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum
equal to the semiannual equivalent yield to maturity of the Post-Coupon Reset
Comparable Treasury Issue, calculated using a price for the Post-Coupon Reset
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Post-Coupon Reset Comparable Treasury Price for such redemption
date.
"Applicable Spread" means the lowest Fixed Rate Bid,
expressed as a spread (in the form of a percentage or in basis points) above
the Base Rate for the Securities of this series, obtained by the Calculation
Agent by 3:30 p.m., New York City time, on the Fixed Rate Determination Date,
from the Fixed Rate Bids quoted to the Calculation Agent by up to five
Reference Corporate Dealers.
"Base Rate" means 5.820%.
"Business Day" means any day other than a Saturday or
Sunday or a day on which banking institutions in New York City are authorized
or obligated by law or executive order to close.
"Calculation Agent" means the Calculation Agent
appointed pursuant to the provisions set forth herein.
"Call Notice" means notice by the Callholder to the
Company and the Trustee that it elects to purchase the Securities of this
series for remarketing on the Initial Coupon Reset Date.
"Call Option" means the option of the Callholder to
purchase the Securities of this series for remarketing on each Coupon Reset
Date, as described in the introductory paragraphs on the reverse of this
Security.
"Comparable Treasury Issues" for the Securities of
this series means the U.S. Treasury security or securities selected by the
Calculation Agent, as of the first Determination Date, as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
Securities of This Series being purchased by the Callholder.
"Comparable Treasury Price" means, with respect to
the Initial Coupon Reset Date: (i) the offer prices for the Comparable
Treasury Issues (expressed, in each case, as a percentage of its principal
amount) at 12:00 noon, New York City time, on the first Determination Date,
as set forth on "Telerate Page 500" (or such other page as may replace
"Telerate Page 500") or (ii) if such page (or any
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successor page) is not displayed or does not contain such offer prices on
such Determination Date, the average of the Reference Treasury Dealer
Quotations for such Determination Date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or if the Calculation Agent
obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations.
"Coupon Reset Date(s)" means October 15, 2002,
assuming the Callholder has elected to purchase the Securities of this series
and the Company has not elected to exercise its Floating Period Option, or
October 15, 2002 and the Floating Rate Termination Date, if the Company has
elected to exercise its Floating Period Option.
"Coupon Reset Rate" means the interest rate to be
paid on the Securities of this series from and including each Coupon Reset
Date.
"Determination Date" means each of the Floating Rate
Spread Determination Date or Fixed Rate Determination Date.
"Dollar Price" means, with respect to the Securities
of this series, (1) the principal amount of the Securities of this series,
plus (2) the premium equal to the excess, if any, of (A) the present value,
as of the Initial Coupon Reset Date, of the Remaining Scheduled Payments for
such Securities of this series, discounted to the Initial Coupon Reset Date
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate, over (B) the principal amount of the Securities
of this series.
"Fixed Rate Bid" means an irrevocable offer to
purchase the aggregate outstanding principal amount of the Securities of this
series at the Dollar Price, but assuming: (i) a settlement date that is the
Fixed Rate Coupon Reset Date applicable to such Securities of this series;
(ii) a maturity date that is the tenth anniversary of the Fixed Rate Coupon
Reset Date; and (iii) a stated annual interest rate equal to the Base Rate
plus the spread bid by the applicable Reference Corporate Dealer.
"Fixed Rate Coupon Reset Date" means October 15,
2002, assuming the Callholder has elected to purchase the Securities of this
series and the Company has not elected to exercise its Floating Period
Option, or the Floating Period Termination Date in the event that the Company
has elected to exercise its Floating Period Option.
"Fixed Rate Determination Date" means the third
Business Day prior to the Fixed Rate Coupon Reset Date.
"Floating Period Interest Rate" means the sum of the
Reference Rate and the Floating Rate Spread.
"Floating Period Notification Date" means the fourth
Business Day prior to the Initial Coupon Reset Date.
"Floating Period Option" means the Company's right,
on any date after the Callholder elects to purchase the Securities of this
series but prior to the fourth Business Day prior to the Initial Coupon Reset
Date, to require the Callholder to remarket the Securities of this series at
the Floating Period Interest Rate.
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"Floating Period Termination Date" means the earlier
of October 15, 2003 or the date which otherwise would be the first Reference
Rate Reset Date following the Floating Period Termination Notification Date.
"Floating Period Termination Notification Date" means
the date on which the Company gives notice of its election to terminate the
Floating Rate Period which shall be at least Four Business Days prior to the
next Reference Rate Reset Date.
"Floating Rate Bid" means an irrevocable offer to
purchase the aggregate outstanding principal amount of the Securities of this
series at the Dollar Price, but assuming: (i) a settlement date that is the
Floating Rate Coupon Reset Date; (ii) a maturity date equal to the Floating
Period Termination Date; (iii) a stated annual interest rate equal to the
Reference Rate plus the Floating Rate Spread; (iv) that the Securities of
this series are callable by the Callholder at the Dollar Price on the
Floating Period Termination Date; and (v) that the Company will redeem the
Securities of this series at the Dollar Price on the Floating Period
Termination Date, if not previously purchased by the Callholder.
"Floating Rate Coupon Reset Date" means October 15,
2002 in the event the Company has elected to exercise its Floating Period
Option.
"Floating Rate Interest Payment Date" means the
Floating Period Termination Date and each Reference Rate Reset Date during
the Floating Rate Period except the first Reference Rate Reset Date.
"Floating Rate Period" means the period from and
including the Floating Rate Coupon Reset Date to but excluding the Floating
Period Termination Date.
"Floating Rate Reset Period" means the period from
and including the first Reference Rate Reset Date, to but excluding the next
following Reference Rate Reset Date, and thereafter the period from and
including a Reference Rate Reset Date to but excluding the next following
Reference Rate Reset Date; provided that the final Floating Rate Reset Period
will run to but exclude the Floating Period Termination Date.
"Floating Rate Spread" means the lowest Floating Rate
Bid expressed as a spread (in the form of a percentage or in basis points)
above the Reference Rate for the Securities of this series obtained by the
Calculation Agent by 3:30 p.m., New York City time, on the Floating Rate
Spread Determination Date, from the Floating Rate Bids quoted to the
Calculation Agent by up to five Reference Money Market Dealers.
"Floating Rate Spread Determination Date" means the
third Business Day prior to the Floating Rate Coupon Reset Date.
"Independent Investment Banker" means UBS Warburg LLC
or Banc of America Securities LLC and any successor firm selected by the
Company, or if any such firm is unwilling or unable to serve as such, an
independent investment and banking institution of national standing appointed
by the Company.
"Interest Rate to Maturity" means the sum of Base
Rate and the Applicable Spread, which will be based on the Dollar Price of
the Securities of this series.
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"London Business Day" means any day on which dealings
in U.S. dollars are transacted in the London Inter-Bank Market.
"Market Disruption Event" means any of the following
in the reasonable judgment of the Calculation Agent and the Company: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange or the establishment of minimum prices on such
exchange; (ii) a general moratorium on commercial banking activities declared
by either U.S. federal or New York State authorities; (iii) a material
adverse change in the existing financial markets in the United States; (iv) a
new material outbreak or escalation of major hostilities involving the United
States, or the declaration of a national emergency or war by the United
States; or (v) a material disruption of the U.S. government securities
market, U.S. corporate bond market, or U.S. federal wire system.
"Notification Date" means a Business Day, not later
than four Business Days prior to the occurrence of the Floating Period
Termination Date.
"Post-Coupon Reset Reference Treasury Dealer" means
each of up to five dealers to be selected by the Company, and their
respective successors; provided that if any of the foregoing ceases to be,
and has no affiliate that is, a Primary Treasury Dealer, the Company will
substitute for it another Primary Treasury Dealer.
"Post-Coupon Reset Comparable Treasury Issue" for the
Securities of this series means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the
remaining term of the Securities of this series to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Securities of this series or, if, in
the reasonable judgment of the Independent Investment Banker, there is no
such security, then the Post-Coupon Reset Comparable Treasury Issue will mean
the U.S. Treasury security or securities selected by an Independent
Investment Banker as having an actual or interpolated maturity or maturities
comparable to the remaining term of the Securities of this series.
"Post-Coupon Reset Comparable Treasury Price" means
(1) the average of five Post-Coupon Reset Reference Treasury Dealer
Quotations for the post-coupon reset redemption date, after excluding the
highest and lowest Post-Coupon Reset Reference Treasury Dealer Quotations, or
(2) if the Independent Investment Banker obtains fewer than five such Post-
Coupon Reset Reference Treasury Dealer Quotations, the average of all such
quotations.
"Post-Coupon Reset Reference Treasury Dealer
Quotations" means, with respect to each Post-Coupon Reset Reference Treasury
Dealer and any coupon reset redemption date, the average, as determined by
the Independent Investment Banker of the bid and asked prices for the
Post-Coupon Reset Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Independent
Investment Banker and the Trustee at 5:00 p.m., New York City time, on the
third Business Day preceding such redemption date.
"Put Option" means the obligation of the Trustee to
put the Securities of this series to the Company as described under the
heading "Put Option" above.
"Reference Corporate Dealer" means each of up to five
leading dealers of publicly traded debt securities, including the Company's
debt securities, which shall be selected by the Company. The Company will
advise the Calculation Agent of its selection of Reference Corporate Dealers
no later than
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five Business Days prior to the Fixed Rate Coupon Reset Date. One of the
Reference Corporate Dealers the Company selects will be UBS AG, London
Branch, if UBS AG, London Branch, is then the Callholder.
"Reference Money Market Dealer" means each of up to
five leading dealers of publicly traded debt securities, including the
Company's debt securities, which the Company shall select, who are also
leading dealers in money market instruments. The Company will advise the
Calculation Agent of its selection of Reference Money Market Dealers no later
than five Business Days prior to the Floating Rate Coupon Reset Date. One of
the Reference Money Market Dealers the Company selects will be UBS AG, London
Branch, if UBS AG, London Branch, is then the Callholder.
"Reference Rate" means the rate for each Floating
Rate Reset Period which will be the rate for deposits in U.S. dollars for a
period of one month which appears on the Telerate Page 3750 (or any successor
page) as of 11:00 a.m., London time, on the applicable Reference Rate
Determination Date. If no rate appears on Telerate Page 3750 on the Reference
Rate Determination Date, the Calculation Agent will request the principal
London offices of four major reference banks in the London Inter-Bank Market,
to provide the Calculation Agent, in the case of each such bank, with its
offered quotation for deposits in U.S. dollars for the period of one month,
commencing on the first day of the Floating Rate Reset Period, to prime banks
in the London Inter-Bank Market at approximately 11:00 a.m., London time, on
that Reference Rate Determination Date and in a principal amount that is
representative for a single transaction in U.S. dollars in that market at
that time. If at least two quotations are provided, then the Reference Rate
will be the average of those quotations. If fewer than two quotations are
provided, then the Reference Rate will be the average (rounded, if necessary,
to the nearest one hundredth of a percent) of the rates quoted at
approximately 11:00 a.m., New York City time, on the Reference Rate
Determination Date by three major banks in New York City selected by the
Calculation Agent for loans in U.S. dollars to leading European banks, having
a one-month maturity and in a principal amount that is representative for a
single transaction in U.S. dollars in that market at that time. If the banks
selected by the Calculation Agent are not providing quotations in the manner
described in this paragraph, the rate for the Floating Rate Reset Period
following the Reference Rate Determination Date will be the rate in effect on
that Reference Rate Determination Date.
"Reference Rate Determination Date" will be the
second London Business Day preceding each Reference Rate Reset Date.
"Reference Rate Reset Date" means October 15, 2002
and the fifteenth day of each month thereafter until, but excluding, the
Floating Period Termination Date.
"Reference Treasury Dealer" means each of up to five
dealers to be selected by the Company, and their respective successors;
provided that if any of the foregoing ceases to be, and has no affiliate that
is, a primary U.S. Government securities dealer (Primary Treasury Dealer),
the Company will substitute for it another Primary Treasury Dealer. One of
the Reference Treasury Dealers TXU Gas Company selects will be UBS AG, London
Branch, if UBS AG, London Branch, is then the Callholder.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted in writing to the Calculation Agent by such
Reference Treasury Dealer, by 12:00 noon, New York City time, on the first
Determination Date.
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"Remaining Scheduled Payments" means, with respect to
the Securities of this series, the remaining scheduled payments of the
principal and interest thereon, calculated at the Base Rate applicable to
such Securities of this series, that would be due from but excluding the
Initial Coupon Reset Date to and including the maturity date; provided that
if such Coupon Reset Date is not an interest payment date, the amount of the
next succeeding scheduled interest payment, calculated at the Base Rate, will
be reduced by the amount of interest accrued, calculated at the Base Rate
only, to the Initial Coupon Reset Date.
"Telerate Page 500" means the display designated as
"Telerate Page 500" on Dow Jones Markets (or such other page as may replace
"Telerate Page 500" on such service) or such other service displaying the
offer prices for the Comparable Treasury Issues, as may replace Dow Jones
Markets.
"Treasury Rate" for the Securities of this series
means, with respect to the Initial Coupon Reset Date, the rate per year equal
to the semiannual equivalent yield to maturity or interpolated (on a day
count basis) yield to maturity of the Comparable Treasury Issues, assuming a
price for the Comparable Treasury Issues (expressed as a percentage of their
principal amounts) equal to the Comparable Treasury Price for such Coupon
Reset Date.
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----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Putable Asset
Term Securities to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Security on the Security Register. The agent may
substitute another to act for him or her.
Date:
--------------------------
Signature:
----------------------------
Signature Guarantee:
------------------
(Sign exactly as your name appears on the other side of this Security)
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Security Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Security
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
22
