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TEXAS UTILITIES COMPANY
AND
,
AS PURCHASE CONTRACT AGENT
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FORM OF PURCHASE CONTRACT AGREEMENT
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DATED AS OF , 1998
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TABLE OF CONTENTS
Page
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions and Other Provisions
of General Application . . . . . . . . . .
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . .
Section 1.2. Compliance Certificates and Opinions . . . . . . .
Section 1.3. Form of Documents Delivered to Agent . . . . . . .
Section 1.4. Acts of Holders; Record Dates . . . . . . . . . .
Section 1.5. Notices . . . . . . . . . . . . . . . . . . . . .
Section 1.6. Notice to Holders; Waiver . . . . . . . . . . . .
Section 1.7. Effect of Headings and Table of Contents . . . . .
Section 1.8. Successors and Assigns . . . . . . . . . . . . . .
Section 1.9. Separability Clause . . . . . . . . . . . . . . .
Section 1.10. Benefits of Agreement . . . . . . . . . . . . . .
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . .
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . .
Section 1.13. Counterparts . . . . . . . . . . . . . . . . . . .
Section 1.14. Inspection of Agreement . . . . . . . . . . . . .
ARTICLE II
Certificate Forms . . . . . . . . . . . .
Section 2.1. Forms of Certificates Generally . . . . . . . . .
Section 2.2. Form of Agent's Certificate of Authentication . .
ARTICLE III
The Securities . . . . . . . . . . . .
Section 3.1. Title and Terms; Denominations . . . . . . . . . .
Section 3.2. Rights and Obligations Evidenced by the
Certificates . . . . . . . . . . . . . . . . . . .
Section 3.3. Execution, Authentication, Delivery and Dating . .
Section 3.4. Temporary Certificates . . . . . . . . . . . . . .
Section 3.5. Registration; Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . .
Section 3.6. Book-Entry Interests . . . . . . . . . . . . . . .
Section 3.7. Notices to Holders . . . . . . . . . . . . . . . .
Section 3.8. Appointment of Successor Clearing Agency . . . . .
Section 3.9. Definitive Certificates . . . . . . . . . . . . .
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates . . . . . . . . . . . . . . . . . . .
Section 3.11. Persons Deemed Owners . . . . . . . . . . . . . .
Section 3.12. Cancellation . . . . . . . . . . . . . . . . . . .
Section 3.13. Establishment or Reestablishment of Type B
Securities . . . . . . . . . . . . . . . . . . . .
Section 3.14. Establishment or Reestablishment of Type A
Securities . . . . . . . . . . . . . . . . . . . .
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event . . . . . . . . . . . . . . . .
Section 3.16. No Consent to Assumption . . . . . . . . . . . . .
ARTICLE IV
The Debt Securities . . . . . . . . . . .
Section 4.1. Payment of Interest; Rights to Interest Preserved;
Interest Rate Reset; Notice . . . . . . . . . . .
Section 4.2. Notice and Voting . . . . . . . . . . . . . . . .
Section 4.3. Tax Event Redemption . . . . . . . . . . . . . . .
ARTICLE V
The Purchase Contracts . . . . . . . . . .
Section 5.1. Purchase of Shares of Common Stock . . . . . . . .
Section 5.2. Contract Adjustment Payments . . . . . . . . . . .
Section 5.3. Deferral of Payment Dates For Contract Adjustment
Payments . . . . . . . . . . . . . . . . . . . . .
Section 5.4. Payment of Purchase Price . . . . . . . . . . . .
Section 5.5. Issuance of Shares of Common Stock . . . . . . . .
Section 5.6. Adjustment of Settlement Rate . . . . . . . . . .
Section 5.7. Notice of Adjustments and Certain Other Events . .
Section 5.8. Termination Event; Notice . . . . . . . . . . . .
Section 5.9. Early Settlement . . . . . . . . . . . . . . . . .
Section 5.10. No Fractional Shares . . . . . . . . . . . . . . .
Section 5.11. Charges and Taxes . . . . . . . . . . . . . . . .
ARTICLE VI
Remedies . . . . . . . . . . . . . .
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock .
Section 6.2. Restoration of Rights and Remedies . . . . . . . .
Section 6.3. Rights and Remedies Cumulative . . . . . . . . . .
Section 6.4. Delay or Omission Not Waiver . . . . . . . . . . .
Section 6.5. Undertaking for Costs . . . . . . . . . . . . . .
Section 6.6. Waiver of Stay or Extension Laws . . . . . . . . .
ARTICLE VII
The Agent . . . . . . . . . . . . . .
Section 7.1. Certain Duties and Responsibilities . . . . . . .
Section 7.2. Notice of Default . . . . . . . . . . . . . . . .
Section 7.3. Certain Rights of Agent . . . . . . . . . . . . .
Section 7.4. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . .
Section 7.5. May Hold Securities . . . . . . . . . . . . . . .
Section 7.6. Money Held in Custody . . . . . . . . . . . . . .
Section 7.7. Compensation and Reimbursement . . . . . . . . . .
Section 7.8. Corporate Agent Required; Eligibility . . . . . .
Section 7.9. Resignation and Removal; Appointment of Successor
Section 7.10. Acceptance of Appointment by Successor . . . . . .
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . .
Section 7.12. Preservation of Information; Communications to
Holders . . . . . . . . . . . . . . . . . . . . .
Section 7.13. No Obligations of Agent . . . . . . . . . . . . .
Section 7.14. Tax Compliance . . . . . . . . . . . . . . . . . .
ARTICLE VIII
Supplemental Agreements . . . . . . . . . .
Section 8.1. Supplemental Agreements Without Consent of
Holders . . . . . . . . . . . . . . . . . . . . .
Section 8.2. Supplemental Agreements with Consent of Holders .
Section 8.3. Execution of Supplemental Agreements . . . . . . .
Section 8.4. Effect of Supplemental Agreements . . . . . . . .
Section 8.5. Reference to Supplemental Agreements . . . . . . .
ARTICLE IX
Consolidation, Merger, Sale or Conveyance . . . . . .
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions . . . . .
Section 9.2. Rights and Duties of Successor Corporation . . . .
Section 9.3. Opinion of Counsel Given to Agent . . . . . . . .
ARTICLE X
Covenants . . . . . . . . . . . . . .
Section 10.1. Performance Under Purchase Contracts . . . . . . .
Section 10.2. Maintenance of Office or Agency . . . . . . . . .
Section 10.3. Company to Reserve Common Stock . . . . . . . . .
Section 10.4. Covenants as to Common Stock . . . . . . . . . . .
EXHIBIT A Form of Type A Certificate
EXHIBIT B Form of Type B Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
FORM OF PURCHASE CONTRACT AGREEMENT, dated as of 1998,
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between Texas Utilities Company, a Texas corporation (the
"Company"), and
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, acting as purchase contract agent for the
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Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery
of this Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when
the Certificates are executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent, as
provided in this Agreement, the valid obligations of the Company,
and to constitute these presents a valid agreement of the
Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed as
follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well
as the singular; and nouns and pronouns of the masculine gender
include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally
accepted accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision;
(d) the following terms have the meanings given to them in
the Officer's Certificate: (i) Applicable Ownership Interest;
(ii) Applicable Principal Amount; (iii) Authorized Newspaper;
(iv) Indenture, (v) Primary Treasury Dealer; (vi) Quotation
Agent; (vii) Redemption Amount; (viii) Redemption Price; (ix)
Reset Agent; (x) Reset Announcement Date; (xii) Reset Rate;
(xiii) Reset Spread; (xiv) Tax Event; (xv) Tax Event Redemption;
(xvi) Tax Event Redemption Date; (xvii) Two-Year Benchmark
Treasury; (xix) Treasury Portfolio; and (xx) Treasury Portfolio
Purchase Price; and
(e) the following terms have the meanings given to them in
this Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have
become such pursuant to the applicable provisions of this
Agreement, and thereafter "Agent" shall mean such Person.
"Agreement" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or
more agreements supplemental hereto entered into pursuant to the
applicable provisions hereof.
"Applicable Market Value" has the meaning specified in
Section 5.1.
"Authorized Officer" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters
relating to this Agreement.
"Bankruptcy Code" means title 11 of the United States Code,
or any other law of the United States that from time to time
provides a uniform system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry
Interest as reflected on the books of the Clearing Agency or on
the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules
of such Clearing Agency).
"Board of Directors" means the board of directors of the
Company or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the
Board of Directors, a copy of which has been certified by the
Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force
and effect on the date of such certification and delivered to the
Agent.
"Book-Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Clearing Agency as
described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday
or any other day on which banking institutions in ▇▇▇ ▇▇▇▇ ▇▇▇▇
(▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇) are permitted or required by any
applicable law to close.
"Cash Settlement" has the meaning set forth in Section
5.4(a)(i).
"Certificate" means a Type A Certificate or a Type B
Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as a depositary for the Securities and in whose
name, or in the name of a nominee of that organization, shall be
registered a Global Certificate and which shall undertake to
effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to
time the Clearing Agency effects book entry transfers and pledges
of securities deposited with the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Collateral Agent" means , as
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Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the
Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in
Section 3.13.
"Common Stock" means the Common Stock, without par value, of
the Company.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor shall have
become such pursuant to the applicable provision of this
Agreement, and thereafter "Company" shall mean such successor.
"Company Certificate" means a certificate signed by an
Authorized Officer and delivered to the Agent.
"Contract Adjustment Payments" means the fee payable by the
Company in respect of each Purchase Contract issued in connection
with Type B Securities, equal to % per annum of the Stated
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Amount, computed on the basis of a 360 day year of twelve 30
day months, plus any Deferred Contract Adjustment Payments
accrued pursuant to Section 5.2.
"Corporate Trust Office" means the principal corporate trust
office of the Agent at which, at any particular time, its
corporate trust business shall be administered, which office at
the date hereof is located at .
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"Coupon Rate" means the percentage rate per annum at which
each Debt Security will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.6(a)(8).
"Debt Securities" means the series of debt securities of the
Company designated the % Series D Senior Notes due ,
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, to be issued under the Indenture as of the date hereof.
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"Deferred Contract Adjustment Payments" has the meaning
specified in Section 5.3.
"Depositary" means, initially, DTC until another Clearing
Agency becomes its successor.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Early Settlement" has the meaning specified in Section
5.9(a).
"Early Settlement Amount" has the meaning specified in
Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section
5.9(a).
"Early Settlement Rate" has the meaning specified in Section
5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time
to time, and the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section
5.6(a)(6).
"Failed Remarketing" has the meaning specified in Section
5.4(b).
"Global Debt Security Certificate" means a certificate
evidencing the rights and obligations of a Holder in respect of
the number of Debt Securities specified on such certificate and
which is registered in the name of a Clearing Agency or a nominee
thereof.
"Global Certificate" means a Certificate that evidences all
or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
"Holder," when used with respect to a Security, means the
Person in whose name the Security evidenced by an Type A
Certificate and/or a Type B Certificate is registered in the
related Type A Register and/or the Type B Register, as the case
may be.
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
"Indenture Trustee" means ,
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as trustee under the Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by an Authorized
Officer and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by an
authorized signatory of the Company establishing the terms of the
debt securities of any series pursuant to the Indenture.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the
Company or an Affiliate and who shall be reasonably acceptable to
the Agent.
"Outstanding Securities," with respect to any Type A
Securities and Type B Securities means, as of the date of
determination, all Type A Securities or Type B Securities
evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Type
B Securities and (B) Type A Securities for which the
Stated Amount of the related Debt Security or the
appropriate Applicable Ownership Interest of the
Treasury Portfolio has been theretofore deposited with
the Agent in trust for the Holders of such Type A
Securities;
(ii) Type A Securities and Type B Securities
evidenced by Certificates theretofore cancelled by the
Agent or delivered to the Agent for cancellation or
deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Type A Securities and Type B Securities
evidenced by Certificates in exchange for or in lieu of
which other Certificates have been authenticated,
executed on behalf of the Holder and delivered pursuant
to this Agreement, other than any such Certificate in
respect of which there shall have been presented to the
Agent proof satisfactory to it that such Certificate is
held by a bona fide purchaser in whose hands the Type A
Securities or Type B Securities evidenced by such
Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite number of the Type A Securities or Type B Securities
have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Type A Securities or Type B
Securities owned by the Company or any Affiliate of the Company
shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Type A Securities or Type B
Securities which a Responsible Officer of the Agent knows to be
so owned shall be so disregarded. Type A Securities or Type B
Securities so owned which have been pledged in good faith may be
regarded as Outstanding Securities if the pledgee establishes to
the satisfaction of the Agent the pledgee's right so to act with
respect to such Type A Securities or Type B Securities and that
the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each ,
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commencing , 1998.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust,
unincorporated association or government or any agency or
political subdivision thereof or any other entity of whatever
nature.
"Permitted Investments" has the meaning set forth in Section
1 of the Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the
Debt Securities, the Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in each
case constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of
the date hereof, by and among the Company, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Agent,
on its own behalf and as attorney-in-fact for the Holders from
time to time of the Securities.
"Predecessor Certificate" means a Predecessor Type A
Certificate or a Predecessor Type B Certificate.
"Predecessor Type A Certificate" of any particular Type A
Certificate means every previous Type A Certificate evidencing
all or a portion of the rights and obligations of the Company and
the Holder under the Type A Security evidenced thereby; and, for
the purposes of this definition, any Type A Certificate
authenticated and delivered under Section 3.10 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Type A
Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated,
destroyed, lost or stolen Type A Certificate.
"Predecessor Type B Certificate" of any particular Type B
Certificate means every previous Type B Certificate evidencing
all or a portion of the rights and obligations of the Company and
the Holder under the Type B Securities evidenced thereby; and,
for the purposes of this definition, any Type B Certificate
authenticated and delivered under Section 3.10 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Type B
Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated,
destroyed, lost or stolen Type B Certificate.
"Proceeds" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Purchase Contract," when used with respect to any Security,
means the contract forming a part of such Security and obligating
the Company to (i) sell and the Holder of such Security to
purchase Common Stock and (ii) pay the Holder Contract Adjustment
Payments, if any, on the terms and subject to the conditions set
forth in Article Five hereof.
"Purchase Contract Settlement Date" means .
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"Purchase Contract Settlement Fund" has the meaning
specified in Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section
5.6(a)(6).
"Record Date" for the distribution and Contract Adjustment
Payments payable on any Payment Date means, as to any Global
Certificate, the Business Day next preceding such Payment Date,
and as to any other Certificate, a day selected by the Company
which shall be more than one Business Day but less than 60
Business Days prior to such Payment Date.
"Register" means the Type A Register and the Type B
Register.
"Registrar" means the Type A Registrar and the Type B
Registrar.
"Remarketing Agent" has the meaning specified in Section
5.4.
"Remarketing Agreement" means the Remarketing Agreement
dated , 1998 by and between the Company, the Trust,
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the Remarketing Agent and the Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Remarketing Underwriting Agreement" has the meaning
specified in the Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section
5.6(b).
"Responsible Officer," when used with respect to the Agent,
means any officer of the Agent assigned by the Agent to
administer its corporate trust matters.
"Security" means a Type A Security or a Type B Security.
"Senior Indebtedness" means indebtedness of any kind of the
Company unless the instrument under which such indebtedness is
incurred expressly provides that it is on parity with or
subordinated in right of payment to the Contract Adjustment
Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $10.
"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of the
following events: (i) at any time on or prior to the Purchase
Contract Settlement Date, a judgment, decree or court order shall
have been entered granting relief under the Bankruptcy Code,
adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation
of the Company or any other similar applicable Federal or State
law, and, unless such judgment, decree or order shall have been
entered within 60 days prior to the Purchase Contract Settlement
Date, such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or (ii) at any time on or prior
to the Purchase Contract Settlement Date, a judgment, decree or
court order for the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of the Company or
of its property, or for the winding up or liquidation of its
affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to
the Purchase Contract Settlement Date, such judgment, decree or
order shall have continued undischarged and unstayed for a period
of 60 days; or (iii) at any time on or prior to the Purchase
Contract Settlement Date the Company shall file a petition for
relief under the Bankruptcy Code, or shall consent to the filing
of a bankruptcy proceeding against it, or shall file a petition
or answer or consent seeking reorganization or liquidation under
the Bankruptcy Code or any other similar applicable Federal or
State law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of
its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its
debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or
any successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means zero-coupon U.S. Treasury
Securities (CUSIP Number ) which are the principal strip
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of the U.S. Treasury Securities which mature on .
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"Type A Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of
Type A Securities specified on such certificate.
"Type A Register" and "Type A Registrar" have the respective
meanings specified in Section 3.5.
"Type A Security" means the collective rights and
obligations of a Holder of a Type A Certificate in respect of a
Debt Security or an appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, subject in each case
to the Pledge thereof, and the related Purchase Contract.
"Type B Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of
Type B Security specified on such certificate.
"Type B Register" and "Type B Registrar" have the respective
meanings specified in Section 3.5.
"Type B Security" means, following the substitution of one
or more Treasury Securities for Debt Securities or for the
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, as collateral to secure a holder's obligations under
a Purchase Contract, the collective rights and obligations of a
holder of a Type B Certificate in respect of such Treasury
Securities, subject in each case to the Pledge thereof, and the
related Purchase Contract.
"Underwriting Agreement" means the Underwriting Agreement
dated , 1998 among the Company, and,
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.
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"Vice President" means any vice president, whether or not
designated by a number or a word or words added before or after
the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement,
upon any application or request by the Company to the Agent to
take any action under any provision of this Agreement, the
Company shall furnish to the Agent a Company Certificate stating
that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with
and, if requested by the Agent, an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the
case of any such application or request as to which the
furnishing of such documents is specifically required by any
provision of this Agreement relating to such particular
application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Agreement shall
include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or
investigation as is necessary to enable such individual to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company
unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements,
opinions or other instruments under this Agreement, they may, but
need not, be consolidated and form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be
given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Holders in person or by agent duly appointed in writing;
and,except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner which the
Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Type
A Register or the Type B Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate
shall bind every future Holder of the same Certificate and the
Holder of every Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the
Agent or the Company in reliance thereon, whether or not notation
of such action is made upon such Certificate.
(e) The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities
entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action
provided or permitted by this Agreement to be given, made or
taken by Holders of Securities. If any record date is set
pursuant to this paragraph, the Holders of the Outstanding Type A
Securities and the Outstanding Type B Securities, as the case may
be, on such record date, and no other Holders, shall be entitled
to take the relevant action with respect to the Type A Securities
or the Type B Securities as the case may be, whether or not such
Holders remain Holders after such record date; provided that no
such action shall be effective hereunder unless taken on or prior
to the applicable Expiration Date by Holders of the requisite
number of Outstanding Securities on such record date. Nothing in
this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding
Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at
its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to
be given to the Agent in writing and to each Holder of Securities
in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this
Section, the Company may designate any date as the "Expiration
Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be
effective unless notice of the proposed new Expiration Date is
given to the Agent in writing, and to each Holder of Securities
in the manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not designated
with respect to any record date set pursuant to this Section, the
Company shall be deemed to have initially designated the 180th
day after such record date as the Expiration Date with respect
thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the
applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Agreement to be made upon, given or furnished
to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Agent at
---------------
, Attention: , or at any other
--------------- --------------
address previously furnished in writing by the Agent to the
Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Company at Texas
Utilities Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secretary, or at any other address previously
furnished in writing to the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or
any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the
Collateral Agent at
----------------------------------------
, or at any other address previously
-------------------
furnished in writing by the Collateral Agent to the Agent,
the Company and the Holders; or
(4) the Indenture Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Indenture
Trustee at
-------------------------------------------------
Attention: other address
---------------------------
previously furnished in writing by the Indenture Trustee to
the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at its
address as it appears in the applicable Register, not later than
the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for
notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification as shall be made with
the approval of the Agent shall constitute a sufficient
notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the
Company shall bind its successors and assigns, whether so
expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof
and thereof shall not in any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto
and their successors hereunder and, to the extent provided
hereby, the Holders, any benefits or any legal or equitable
right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the
Securities evidenced by their Certificates by their acceptance of
delivery of such Certificates.
Section 1.11. Governing Law.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business
Day, then (notwithstanding any other provision of this Agreement
or the Type A Certificates or the Type B Certificates) payment of
the Contract Adjustment Payments, if any, shall not be made on
such date, but such payments shall be made on the next succeeding
Business Day with the same force and effect as if made on such
Payment Date, provided that no interest shall accrue or be
payable by the Company or any Holder for the period from and
after any such Payment Date, except that, if such next succeeding
Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day
with the same force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date
shall not be a Business Day, then (notwithstanding any other
provision of this Agreement, the Type A Certificates or the Type
B Certificates), the Purchase Contracts shall not be performed on
such date, but the Purchase Contracts shall be performed on the
immediately following Business Day with the same force and effect
as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts
by the parties hereto on separate counterparts, each of which,
when so executed and delivered, shall be deemed an original, but
all such counterparts shall together constitute one and the same
instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all
reasonable times during normal business hours at the Corporate
Trust Office for inspection by any Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Type A Certificates (including the form of Purchase
Contract forming part of the Type A Securities evidenced thereby)
shall be in substantially the form set forth in Exhibit A hereto,
with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules
of any securities exchange on which the Type A Securities are
listed or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing
such Type A Certificates, as evidenced by their execution of the
Type A Certificates.
The definitive Type A Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers
of the Company executing the Type A Securities evidenced by such
Type A Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
The Type B Certificates (including the form of Purchase
Contracts forming part of the Type B Securities evidenced
thereby) shall be in substantially the form set forth in Exhibit
B hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Type B
Securities may be listed or any depositary therefor, or as may,
consistently herewith, be determined by the officers of the
Company executing such Type B Certificates, as evidenced by their
execution of the Type B Certificates.
The definitive Type B Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers
of the Company executing the Type B Securities evidenced by such
Type B Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf
of the Holders and delivered hereunder shall bear a legend in
substantially the following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND
IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the
Type A Securities shall be in substantially the form set forth on
the form of the Type A Certificates.
The form of the Agent's certificate of authentication of the
Type B Securities shall be in substantially the form set forth on
the form of the Type B Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Type A Securities and Type B
Securities evidenced by Certificates authenticated, executed on
behalf of the Holders and delivered hereunder is limited to
except for Certificates authenticated, executed and
-----------
delivered upon registration of transfer of, in exchange for, or
in lieu of, other Certificates pursuant to Section 3.4, 3.5,
3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form
and only in denominations of a single Type A Security or Type B
Security and any integral multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the
Certificates.
Each Type A Certificate shall evidence the number of Type A
Securities specified therein, with each such Type A Security
representing the ownership by the Holder thereof of a beneficial
interest in a Debt Security or the Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, subject to the
Pledge of such Debt Security or the Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, by such Holder
pursuant to the Pledge Agreement, and the rights and obligations
of the Holder thereof and the Company under one Purchase
Contract. The Agent as attorney-in-fact for, and on behalf of,
the Holder of each Type A Security shall pledge, pursuant to the
Pledge Agreement, the Debt Security or the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming a
part of such Type A Security, to the Collateral Agent and grant
to the Collateral Agent a security interest in the right, title,
and interest of such Holder in such Debt Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase
the Common Stock of the Company.
Each Type B Certificate shall evidence the number of Type B
Securities specified therein, with each such Type B Security
representing the ownership by the Holder thereof of a 1/100
undivided beneficial interest in a Treasury Security with a
principal amount equal to $1,000 subject to the Pledge of such
Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof,
upon the execution and delivery of this Agreement, and at any
time and from time to time thereafter, the Company may deliver
Certificates executed by the Company to the Agent for
authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such
Certificates, and the Agent in accordance with such Issuer Order
shall authenticate, execute on behalf of the Holders and deliver
such Certificates.
The Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or one of its Vice
Presidents and its Treasurer or one of its Assistant Treasurers,
or its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be
valid until such Certificate has been executed on behalf of the
Holder by the manual signature of an authorized signatory of the
Agent, as such Holder's attorney-in-fact. Such signature by an
authorized signatory of the Agent shall be conclusive evidence
that the Holder of such Certificate has entered into the Purchase
Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its
authentication.
No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by an
authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary
Certificates which are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any
securities exchange on which the Type A Securities or Type B
Securities are listed, or as may, consistently herewith, be
determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable
delay. After the preparation of definitive Certificates, the
temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without
charge to the Holder. Upon surrender for cancellation of any one
or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute
on behalf of the Holder, and deliver in exchange therefor, one or
more definitive Certificates of like tenor and denominations and
evidencing a like number of Type A Securities or Type B
Securities, as the case may be, as the temporary Certificate or
Certificates so surrendered. Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and
the same obligations with respect to the Type A Securities or
Type B Securities, as the case may be, evidenced thereby as
definitive Certificates.
Section 3.5. Registration; Registration of Transfer and
Exchange.
The Agent shall keep at the Corporate Trust Office a
Register (the "Type A Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall
provide for the registration of Type A Certificates and of
transfers of Type A Certificates (the Agent, in such capacity,
the "Type A Registrar") and a Register (the "Type B Register") in
which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of the
Type B Certificates and transfers of Type B Certificates (the
Agent, in such capacity, the "Type B Registrar").
Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall
execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like
number of Type A Securities or Type B Securities, as the case
may be.
At the option of the Holder, Certificates may be exchanged
for other Certificates, of any authorized denominations and
evidencing a like number of Type A Securities or Type B
Securities, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office.
Whenever any Certificates are so surrendered for exchange, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver
the Certificates which the Holder making the exchange is entitled
to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the
same number of Type A Securities or Type B Securities, as the
case may be, and be entitled to the same benefits and subject to
the same obligations, under this Agreement as the Type A
Securities or Type B Securities, as the case may be, evidenced by
the Certificate surrendered upon such registration of transfer or
exchange.
Every Certificate presented or surrendered for registration
of transfer or for exchange shall (if so required by the Agent)
be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Agent duly
executed, by the Holder thereof or its attorney duly authorized
in writing.
No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the
Agent may require payment from the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of
Certificates, other than any exchanges pursuant to Sections 3.6
and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder and deliver any Certificate presented or surrendered for
registration of transfer or for exchange on or after the Business
Day immediately preceding the earlier of the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of a
new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent
shall (i) if the Purchase Contract Settlement Date has occurred,
deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by
such Certificate, (ii) in the case of Type A Securities, if a
Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the aggregate Stated Amount of
the Debt Securities or the Treasury Portfolio, as applicable,
evidenced thereby, or (iii) in the case of Type B Securities, if
a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Treasury Securities
evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in
the form of one or more fully registered Global Certificates, to
be delivered to the Depositary by, or on behalf of, the Company.
Such Global Certificate shall initially be registered on the
books and records of the Company in the name of Cede & Co., the
nominee of the Depositary, and no Beneficial Owner will receive a
definitive Certificate representing such Beneficial Owner's
interest in such Global Certificate, except as provided in
Section 3.9. The Agent shall enter into an agreement with the
Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full
force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the
payment of Contract Adjustment Payments, if any, and receiving
approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section
3.6 conflict with any other provisions of this Agreement, the
provisions of this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such
Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and
transmit payments of Contract Adjustment Payments to such
Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the
Company's agent shall give such notices and communications to the
Holders and, with respect to any Securities registered in the
name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company
may, in its sole discretion, appoint a successor Clearing Agency
with respect to the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to the Securities and a
successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 3.8, (ii) the Company
elects to terminate the book-entry system through the Clearing
Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of
its obligations under one or more Purchase Contracts, then upon
surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Securities by the Clearing Agency,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in
accordance with the instructions of the Clearing Agency. The
Company shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be protected
in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates.
If any mutilated Certificate is surrendered to the Agent,
the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver
in exchange therefor, a new Certificate at the cost of the
Holder, evidencing the same number of Type A Securities or Type B
Securities, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft
of any Certificate, and (ii) such security or indemnity at the
cost of the Holder as may be required by them to hold each of
them and any agent of any of them harmless, then, in the absence
of notice to the Company or the Agent that such Certificate has
been acquired by a bona fide purchaser, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in
lieu of any such destroyed, lost or stolen Certificate, a new
Certificate, evidencing the same number of Type A Securities or
Type B Securities, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder, and deliver to the Holder, a Certificate on or after the
Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt
of appropriate registration or transfer instructions from such
Holder, the Agent shall (i) if the Purchase Contract Settlement
Date has occurred, deliver the shares of Common Stock issuable in
respect of the Purchase Contracts forming a part of the
Securities evidenced by such Certificate, or (ii) if a
Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Debt Securities, the
appropriate Applicable Ownership Interest of the Treasury
Portfolio or the Treasury Securities, as the case may be,
evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the Holder
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the
Company and of the Holder in respect of the Security evidenced
thereby, whether or not the destroyed, lost or stolen Certificate
(and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits
and be subject to all the obligations of this Agreement equally
and proportionately with any and all other Certificates delivered
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration
of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Type A Securities
or Type B Securities evidenced thereby, for the purpose of
receiving interest on the Debt Securities or distributions on the
maturing quarterly interest strips of the Treasury Portfolio, as
applicable, receiving payments of Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any interest on the Debt Securities or
the Contract Adjustment Payments payable in respect of the
Purchase Contracts constituting a part of the Type A Securities
or Type B Securities evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent
or any agent of the Company or the Agent, from giving effect to
any written certification, proxy or other authorization furnished
by any Clearing Agency (or its nominee), as a Holder, with
respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global
Certificate, the operation of customary practices governing the
exercise of rights of such Clearing Agency (or its nominee) as
Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of
Common Stock on or after the Purchase Contract Settlement Date,
upon the transfer of Debt Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the
registration of a transfer or exchange of a Security, or a
Collateral Substitution or the re-establishment of a Type A
Security shall, if surrendered to any Person other than the
Agent, be delivered to the Agent and, if not already cancelled,
shall be promptly cancelled by it. The Company may at any time
deliver to the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Certificates
so delivered shall, upon Issuer Order, be promptly cancelled by
the Agent. No Certificates shall be authenticated, executed on
behalf of the Holder and delivered in lieu of or in exchange for
any Certificates cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Certificates
held by the Agent shall upon written request be returned to the
Company.
If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a
cancellation of such Certificate unless and until such
Certificate is delivered to the Agent cancelled or for
cancellation.
Section 3.13. Establishment or Reestablishment of Type B
Securities.
A Holder may separate the Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as
applicable, from the related Purchase Contracts in respect of a
Type A Security by substituting for such Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, Treasury Securities in an
aggregate principal amount equal to the aggregate principal
amount of such Debt Securities or for the aggregate Stated Amount
of the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable (a "Collateral Substitution"), at any
time from and after the date of this Agreement and on or prior to
the fifth Business Day immediately preceding the Purchase
Contract Settlement Date in the case of the Debt Securities and
on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in each
case by (a) depositing with the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the
aggregate principal amount of the Debt Securities comprising part
of such Type A Securities or for the aggregate Stated Amount of
the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio comprising part of such Type A Securities, as the case
may be, and (b) (i) by delivering cash in an amount equal to the
excess of the Contract Adjustment Payments that would have
accrued since the last Payment Date through the date of
substitution on the Type B Securities being created by the
holder, over the Contract Adjustment Payments that have accrued
over the same time period on the related Type A Securities, which
amount the Agent shall promptly remit to the Company, and (ii)
transferring the related Type A Securities to the Agent
accompanied by a notice to the Agent, substantially in the form
of Exhibit D hereto, stating that the Holder has transferred the
relevant amount of Treasury Securities to the Collateral Agent
and requesting that the Agent instruct the Collateral Agent to
release the Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
underlying such Type A Securities, whereupon the Agent shall
promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of
the Treasury Securities described in clause (a) above and the
instruction described in clause (b) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release
to the Agent, on behalf of the Holder, Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, having a corresponding aggregate
principal amount of such Debt Securities or aggregate Stated
Amount of the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, from the Pledge, free and
clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Type A Securities;
(ii) transfer the Debt Securities or the
appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, to the Holder;
and
(iii) authenticate, execute on behalf of such
Holder and deliver a Type B Certificate executed by the
Company in accordance with Section 3.3 evidencing the
same number of Purchase Contracts as were evidenced by
the cancelled Type A Securities.
Holders who elect to separate the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, from the related Purchase Contract
and to substitute Treasury Securities for such Debt Securities or
the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions (i) only in
integral multiples of 100 Type A Securities if Debt Securities
are being substituted by Treasury Securities, or (ii) only in
integral multiples of Type A Securities if the
----------
appropriate Applicable Ownership Interests of the Treasury
Portfolio are being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the Type A Securities or fails to deliver a Type A
Certificate(s) to the Agent after depositing Treasury Securities
with the Collateral Agent, the Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, constituting a part of such Type A Security, and any
interest on such Debt Securities or distributions with respect to
the Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until such Type
A Security is so transferred or the Type A Certificate is so
delivered, as the case may be, or, with respect to a Type A
Certificate, such Holder provides evidence satisfactory to the
Company and the Agent that such Type A Certificate has been
destroyed, lost or stolen, together with any indemnity that may
be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the
Purchase Contract underlying a Type A Security remains in effect,
such Type A Security shall not be separable into its constituent
parts, and the rights and obligations of the Holder in respect of
the Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and
Purchase Contract comprising such Type A Security may be
acquired, and may be transferred and exchanged, only as a Type A
Security.
Section 3.14. Establishment or Reestablishment of Type A
Securities.
A Holder of a Type B Security may create or recreate Type A
Securities at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption has not occurred, and (ii) on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, if a Tax Event Redemption has occurred,
in each case by (a) depositing with the Collateral Agent Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, having an aggregate
principal amount in the case of the Debt Securities, or an
aggregate Stated Amount of the appropriate Applicable Ownership
Interest (as defined in clause (A) of the definition of such
term) of the Treasury Portfolio, as the case may be, equal to the
aggregate principal amount of the Treasury Securities comprising
part of the Type B Securities and (b) transferring the related
Type B Securities to the Agent accompanied by a notice to the
Agent, substantially in the form of Exhibit D hereto, stating
that the Holder has transferred the relevant amount of Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Type B
Securities, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto. Upon receipt of the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, described in clause (a) above and
the instruction described in clause (b) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a
corresponding aggregate principal amount from the Pledge to the
Agent free and clear of the Company's security interest therein,
and upon receipt thereof the Agent shall promptly:
(i) cancel the related Type B Security;
(ii) transfer the Treasury Securities to the Holder;
and
(iii) authenticate, execute on behalf of such Holder
and deliver an Type A Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Type B
Securities.
Holders who elect to separate Treasury Securities from the
related Purchase Contract and to substitute Debt Securities for
such Treasury Securities shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders of Type B Securities may establish or reestablish
Type A Securities in integral multiples of 100 Type B Securities
for 100 Type A Securities if a Tax Event Redemption has not
occurred, and in integral multiples of Type B
---------
Securities for Type A Securities if a Tax Event
----------------
Redemption has occurred.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the Type B Securities or fails to deliver a Type B
Certificate(s) to the Agent after depositing Debt Securities with
the Collateral Agent, the Treasury Securities constituting a part
of such Type B Security, and any interest on such Treasury
Securities shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Type B
Security is so transferred or the Type B Certificate is so
delivered, or, with respect to a Type B Certificate, such Holder
provides evidence satisfactory to the Company and the Agent that
such Type B Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and
the Company.
Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Type B Security remains in effect,
such Type B Security shall not be separable into its constituent
parts and the rights and obligations of the Holder of such Type B
Security in respect of the Treasury Security and Purchase
Contract comprising such Type B Security may be acquired, and may
be transferred and exchanged only as a Type B Security.
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer
to the Agent of the Debt Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, underlying the Type A Securities
and the Type B Securities pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with
respect to such Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, from each Holder by written
request mailed to such Holder at its address as it appears in the
Type A Register or the Type B Register, as the case may be. Upon
book-entry transfer of the Type A Securities or Type B Securities
or delivery of a Type A Certificate or Type B Certificate to the
Agent with such transfer instructions, the Agent shall transfer
the Debt Securities, the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Type A Securities
or Type B Securities, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of Type
A Securities or Type B Securities fails to effect such transfer
or delivery, the Debt Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Type A Securities
or Type B Securities, as the case may be, and any interest
thereon, shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Type A
Securities or Type B Securities are transferred or the Type A
Certificate or Type B Certificate is surrendered or such Holder
provides satisfactory evidence that such Type A Certificate or
Type B Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the
Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be
deemed expressly to have withheld any consent to the assumption
under Section 365 of the Bankruptcy Code or otherwise, of the
Purchase Contract by the Company, receiver, liquidator or a
person or entity performing similar functions, its trustee in the
event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing
for reorganization or liquidation.
ARTICLE IV
The Debt Securities
Section 4.1. Payment of Interest; Rights to Interest Preserved;
Interest Rate Reset; Notice.
A payment of interest on any Debt Securities or distribution
with respect to the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, which is paid on any
Payment Date shall, subject to receipt thereof by the Agent from
the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Type A
Certificate (or one or more Predecessor Type A Certificates) of
which such Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
is a part is registered at the close of business on the Record
Date for such Payment Date.
Each Type A Certificate evidencing Debt Securities delivered
under this Agreement upon registration of transfer of or in
exchange for or in lieu of any other Type A Certificate shall
carry the rights to payment of interest accrued and unpaid, and
to accrue interest, which is carried by the Debt Securities
underlying such other Type A Certificate.
In the case of any Type A Security with respect to which
Cash Settlement of the underlying Purchase Contract is effected
on the Business Day immediately preceding the Purchase Contract
Settlement Date pursuant to prior notice, or with respect to
which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or with respect to which a
Collateral Substitution is effected, in each case on a date that
is after any Record Date and on or prior to the next succeeding
Payment Date, interest on the Debt Securities or distributions
with respect to the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, underlying such Type
A Securities otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash Settlement
or Early Settlement or Collateral Substitution, and such
interests shall, subject to receipt thereof by the Agent, be
payable to the Person in whose name the Type A Certificate (or
one or more Predecessor Type A Certificates) was registered at
the close of business on the Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the
case of any Type A Securities with respect to which Cash
Settlement or Early Settlement of the underlying Purchase
Contract is effected on the Business Day immediately preceding
the Purchase Contract Settlement Date or an Early Settlement
Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, payment of interest on the
related Debt Securities or distributions with respect to the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, that would otherwise be payable
after the Purchase Contract Settlement Date or Early Settlement
Date shall not be payable hereunder to the Holder of such Type A
Securities; provided, however, that to the extent that such
Holder continues to hold the separated Debt Securities that
formerly comprised a part of such Holder's Type A Securities,
such Holder shall be entitled to receive the payment of interest
on such separated Debt Securities.
The applicable Coupon Rate on the Debt Securities on and
after the Purchase Contract Settlement Date will be reset on the
third Business Day immediately preceding the Purchase Contract
Settlement Date to the Reset Rate (such Reset Rate to be in
effect on and after the Purchase Contract Settlement Date). On
the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be
announced by the Company. On the Business Day immediately
following the Reset Announcement Date, the Debt Securities
Holders will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Debt Securities if published in
an Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar
days prior to the Reset Announcement Date, the Company will
notify the DTC or its nominee (or any successor Clearing Agency
or its nominee) by first-class mail, postage prepaid, to notify
the Beneficial Owners or Clearing Agency Participants holding
Type A Securities or Type B Securities, of such Reset
Announcement Date and the procedures to be followed by such
Holders of Type Securities A who intend to settle their
obligation under the Purchase Contract with separate cash on the
Purchase Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights
pertaining to the Debt Securities pledged with the Collateral
Agent but only to the extent instructed by the Holders as
described below. Upon receipt of notice of any meeting at which
holders of Debt Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Debt
Securities, the Agent shall, as soon as practicable thereafter,
mail to the Holders of Type A Securities a notice (a) containing
such information as is contained in the notice or solicitation,
(b) stating that each Holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date
as the record date for determining the holders of Debt Securities
entitled to vote) shall be entitled to instruct the Agent as to
the exercise of the voting rights pertaining to the Debt
Securities underlying their Type A Securities and (c) stating the
manner in which such instructions may be given. Upon the written
request of the Holders of Type A Securities on such record date,
the Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in
such requests, the maximum number of Debt Securities as to which
any particular voting instructions are received. In the absence
of specific instructions from the Holder of an Type A Securities,
the Agent shall abstain from voting the Debt Security underlying
such Type A Securities. The Company hereby agrees, if applicable,
to solicit Holders of Type A Securities to timely instruct the
Agent in order to enable the Agent to vote such Debt Securities
and the Trust shall covenant to such effect in the Declaration.
Section 4.3. Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable
on the Tax Event Redemption Date with respect to the Applicable
Principal Amount of Debt Securities shall be delivered to the
Collateral Agent in exchange for the Pledged Debt Securities.
Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption
Amount of such Redemption Price to purchase on behalf of the
Holders of Type A Securities the Treasury Portfolio and promptly
remit the remaining portion of such Redemption Price to the Agent
for payment to the Holders of such Type A Securities. The
Treasury Portfolio will be substituted for the Pledged Debt
Securities, and will be held by the Collateral Agent in
accordance with the terms of the Pledge Agreement to secure the
obligation of each Holder of a Type A Security to purchase the
Common Stock of the Company under the Purchase Contract
constituting a part of such Type A Security. Following the
occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Holders of Type A Securities and
the Collateral Agent shall have such security interests, rights
and obligations with respect to the Treasury Portfolio as the
Holder of Type A Securities and the Collateral Agent had in
respect of the Debt Security subject to the Pledge thereof as
provided in Articles II, III, IV, V, and VI of the Pledge
Agreement, and any reference herein to the Debt Securities shall
be deemed to be reference to such Treasury Portfolio. The Company
may cause to be made in any Type A Certificates thereafter to be
issued such change in phraseology and form (but not in substance)
as may be appropriate to reflect the liquidation of the Trust and
the substitution of the Treasury Portfolio for Debt Securities as
collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.9 hereof, obligate the
Holder of the related Security to purchase, and the Company to
sell, on the Purchase Contract Settlement Date at a price equal
to the Stated Amount (the "Purchase Price"), a number of newly
issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the
Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $ (the
------
"Threshold Appreciation Price"), shares of Common Stock per
----
Purchase Contract, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price, but is greater than $ ,
----
the number of shares of Common Stock equal to the Stated Amount
divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $ , shares of
----- -----
Common Stock per Purchase Contract, in each case subject to
adjustment as provided in Section 5.6 (and in each case rounded
upward or downward to the nearest 1/10,000th of a share). As
provided in Section 5.10, no fractional shares of Common Stock
will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the
Closing Price per share of Common Stock on each of the 20
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. The
"Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the NYSE. A
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities
exchange or association and (B) has traded at least once on the
national or regional securities exchange or association that is
the primary market for the trading of the Common Stock.
Each Holder of a Type A Security or a Type B Security, by
its acceptance thereof, irrevocably authorizes the Agent to enter
into and perform the related Purchase Contract on its behalf as
its attorney-in-fact (including the execution of Certificates on
behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its
obligations under such Purchase Contracts, and consents to the
provisions hereof, irrevocably authorizes the Agent as its
attorney-in-fact to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to and agrees
to be bound by the Pledge of the Debt Securities, the Treasury
Portfolio or the Treasury Securities pursuant to the Pledge
Agreement; provided that upon a Termination Event, the rights of
the Holder of such Security under the Purchase Contract may be
enforced without regard to any other rights or obligations. Each
Holder of a Type A Security or a Type B Security, by its
acceptance thereof, further covenants and agrees, that, to the
extent and in the manner provided in Section 5.4 and the Pledge
Agreement, but subject to the terms thereof, payments in respect
of the Stated Amount of the Debt Securities or the Proceeds of
the Treasury Securities or the Treasury Portfolio on the Purchase
Contract Settlement Date shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under
such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Upon registration of transfer of a Certificate, the
transferee shall be bound (without the necessity of any other
action on the part of such transferee), under the terms of this
Agreement, the Purchase Contracts underlying such Certificate and
the Pledge Agreement and the transferor shall be released from
the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge
Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name a
Certificate (or one or more Predecessor Certificates) is
registered at the close of business on the Record Date next
preceding such Payment Date. The Contract Adjustment Payments
will be payable at the office of the Agent in The City of New
York maintained for that purpose or, at the option of the
Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Type A
Register or Type B Register.
Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Adjustment Payments (including any
accrued or Deferred Contract Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of
(including as a result of a Collateral Substitution or the
re-establishment of a Type A Security) any other Certificate
shall carry the rights to Contract Adjustment Payments accrued
and unpaid, and to accrue Contract Adjustment Payments, which
were carried by the Purchase Contracts underlying such other
Certificates.
Subject to Section 5.9, in the case of any Security with
respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date that is after
any Record Date and on or prior to the next succeeding Payment
Date, Contract Adjustment Payments, if any, otherwise payable on
such Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, and such Contract
Adjustment Payments shall be paid to the Person in whose name the
Certificate evidencing such Security (or one or more Predecessor
Certificates) is registered at the close of business on such
Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security with
respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, Contract
Adjustment Payments that would otherwise be payable after the
Early Settlement Date with respect to such Purchase Contract
shall not be payable.
The Company's obligations with respect to Contract
Adjustment Payments, will be subordinated and junior in right of
payment to the Company's obligations under any Senior
Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract Adjustment
Payments.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or
all of the Contract Adjustment Payments otherwise payable on any
Payment Date, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) at least ten Business Days
prior to the earlier of (i) the next succeeding Payment Date or
(ii) the date the Company is required to give notice of the
Record Date or Payment Date with respect to payment of such
Contract Adjustment Payments to the NYSE or other applicable
self-regulatory organization or to Holders of the Securities, but
in any event not less than one Business Day prior to such Record
Date. Any Contract Adjustment Payments so deferred shall bear
additional Contract Adjustment Payments thereon at the rate of
% per annum (computed on the basis of 360 day year of twelve
---
30 day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract
Adjustment Payments together with the additional Contract
Adjustment Payments accrued thereon, being referred to herein as
the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments shall be due on the next succeeding Payment
Date except to the extent that payment is deferred pursuant to
this Section. No Contract Adjustment Payments may be deferred to
a date that is after the Purchase Contract Settlement Date. If
the Purchase Contracts are terminated upon the occurrence of a
Termination Event, the Holder's right to receive Contract
Adjustment Payments and Deferred Contract Adjustment Payments
will terminate.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date, each Holder will receive on
the Purchase Contract Settlement Date in lieu of a cash payment a
number of shares of Common Stock (in addition to a number of
shares of Common Stock equal to the Settlement Rate) equal to (x)
the aggregate amount of Deferred Contract Adjustment Payments
payable to such Holder divided by (y) the Applicable Market
Value.
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract
Adjustment Payments on the Purchase Contract Settlement Date. In
lieu of fractional shares otherwise issuable with respect to such
payment of Deferred Contract Adjustment Payments, the Holder will
be entitled to receive an amount in cash as provided in Section
5.10.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred
Contract Adjustment Payments have been paid, the Company shall
not declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases
or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to
the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or
(v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan or the declaration thereunder of a
dividend of rights in the future).
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a
Holder settles the underlying Purchase Contract through the early
delivery of cash to the Purchase Contract Agent in the manner
described in Section 5.9, each Holder of a Type A Security must
notify the Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to pay in cash ("Cash
Settlement") the Purchase Price for the shares of Common Stock to
be purchased pursuant to a Purchase Contract. Such notice shall
be made on or prior to 5:00 p.m., New York City time, on the
fifth Business Day immediately preceding the Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral
Agent of the receipt of such a notice from a Holder intending to
make a Cash Settlement.
(ii) A Holder of a Type A Security who has so notified
the Agent of its intention to make a Cash Settlement is
required to pay the Purchase Price to the Collateral Agent
prior to 11:00 a.m., New York City time, on the Business Day
immediately preceding the Purchase Contract Settlement Date
in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case in
immediately available funds payable to or upon the order of
the Company. Any cash received by the Collateral Agent will
be invested promptly by the Collateral Agent in Permitted
Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in
such Permitted Investments, will be distributed to the Agent
when received for payment to the Holder.
(iii) If a Holder of a Type A Security fails to notify
the Agent of its intention to make a Cash Settlement in
accordance with paragraph (a)(i) above, such failure shall
constitute an event of default and the Holder shall be
deemed to have consented to the disposition of the pledged
Debt Securities pursuant to the Remarketing as described in
paragraph (b) below. If a Holder of a Type A Security does
notify the Agent as provided in paragraph (a)(i) above of
its intention to pay the Purchase Price in cash, but fails
to make such payment as required by paragraph (a)(ii) above,
such failure shall also constitute a default; however, the
Debt Securities of such a Holder will not be remarketed but
instead the Collateral Agent, for the benefit of the
Company, will exercise its rights as a secured party with
respect to such Debt Securities, including those rights
specified in paragraph (c) below.
(b) In order to dispose of the Debt Securities of Type A
Security Holders who have not notified the Agent of their
intention to effect a Cash Settlement as provided in paragraph
(a)(i) above, the Company shall engage a nationally recognized
investment bank (the "Remarketing Agent") pursuant to the
Remarketing Agreement to sell such Debt Securities. In order to
facilitate the remarketing, the Agent shall notify, by 10:00
a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, the Remarketing
Agent of the aggregate number of Debt Securities to be
remarketed. Concurrently, the Collateral Agent, pursuant to the
terms of the Pledge Agreement, will present for remarketing such
Debt Securities to the Remarketing Agent. Upon receipt of such
notice from the Agent and such Debt Securities from the
Collateral Agent, the Remarketing Agent will, on the third
Business Day immediately preceding the Purchase Contract
Settlement Date, use its reasonable efforts to remarket such Debt
Securities on such date at a price of approximately 100.5% (but
not less than 100%) of the aggregate principal amount of such
Debt Securities, plus accrued and unpaid interest (including
deferred interest), if any, thereon. After deducting as the
remarketing fee ("Remarketing Fee") an amount not exceeding 25
basis points (.25%) of the aggregate principal amount of the
remarketed Debt Securities from any amount of such proceeds in
excess of the aggregate principal amount of the remarketed Debt
Securities plus accrued and unpaid interest (including any
deferred interest), if any, then the Remarketing Agent will remit
the entire amount of the proceeds from such remarketing to the
Collateral Agent. Such portion of the proceeds, equal to the
aggregate principal amount of such Debt Securities, will
automatically be applied by the Collateral Agent, in accordance
with the Pledge Agreement to satisfy in full such Type A Security
holders' obligations to pay the Purchase Price for the Common
Stock under the related Purchase Contracts on the Purchase
Contract Settlement Date. Any proceeds in excess of those
required to pay the Purchase Price and the Remarketing Fee will
be remitted to the Agent for payment to the Holders of the
related Type A Security. Type A Security Holders whose Debt
Securities are so remarketed will not otherwise be responsible
for the payment of any Remarketing Fee in connection therewith.
If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Debt Securities of such Holders
of Type A Securities at a price not less than 100% of the
aggregate principal amount of such Debt Securities plus accrued
and unpaid interest (including deferred interest), if any, the
remarketing will be deemed to have failed (a "Failed
Remarketing") and in accordance with the terms of the Pledge
Agreement the Collateral Agent for the benefit of the Company
will exercise its rights as a secured party with respect to such
Debt Securities, including those actions specified in paragraph
(c) below; provided, that if upon a Failed Remarketing the
Collateral Agent exercises such rights for the benefit of the
Company with respect to such Debt Securities, any accrued and
unpaid interest (including any deferred interest) on such Debt
Securities will become payable by the Company to the Agent for
payment to the Holder of the Type A Securities to which such Debt
Securities relates. Such payment will be made by the Company on
or prior to 11 a.m. New York City time on the Purchase Contract
Settlement Date in lawful money of the United States by certified
or cashiers' check or wire transfer in immediately available
funds payable to or upon the order of the Agent. The Company will
cause a notice of such Failed Remarketing to be published on the
Second Business Day immediately preceding the Purchase Contract
Settlement Date in a daily newspaper in the English language of
general circulation in The City of New York, which is expected to
be The Wall Street Journal.
(c) With respect to any Debt Securities beneficially owned
by Holders who have elected Cash Settlement but failed to deliver
cash as required in (a)(ii) above, or with respect to Debt
Securities which are subject to a Failed Remarketing, the
Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject
to applicable law and paragraph (h) below, may, among other
things, (i) retain the Debt Securities in full satisfaction of
the Holders obligations under the Purchase Contracts or (ii) sell
the Debt Securities in one or more public or private sales.
(d) (i) Unless a Holder of Type B Securities or Type A
Securities (if a Tax Event Redemption has occurred) settles the
underlying Purchase Contract through the early delivery of cash
to the Purchase Contract Agent in the manner described in Section
5.9, each Holder of a Type B Security or Type A Security (if a
Tax Event Redemption has occurred) must notify the Agent by use
of a notice in substantially the form of Exhibit E hereto of its
intention to pay in cash the Purchase Price for the shares of
Common Stock to be purchased pursuant to a Purchase Contract on
or prior to 5:00 p.m., New York City time, on the second Business
Day immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Type B Security or Type A Security
(if a Tax Event Redemption has occurred) who has so notified
the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(i) above is required to pay
the Purchase Price to the Collateral Agent prior to 11:00
a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful
money of the United States by certified or cashiers' check
or wire transfer, in each case in immediately available
funds payable to or upon the order of the Company. Any cash
received by the Collateral Agent will be invested promptly
by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the
investment earnings from the investment in such Permitted
Investments will be distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of a Type B Security fails to notify
the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(i) above, or if a Holder of a
Type A Security (if a Tax Event Redemption has occurred)
does notify the Agent as provided in paragraph (d)(i) above
its intention to pay the Purchase Price in cash, but fails
to make such payment as required by paragraph (d)(ii) above,
then upon the maturity of the Pledged Treasury Securities or
the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, held by the
Collateral Agent on the Business Day immediately prior to
the Purchase Contract Settlement Date, the principal amount
of the Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case
may be, received by the Collateral Agent will be invested
promptly in overnight Permitted Investments. On the Purchase
Contract Settlement Date an amount equal to the Purchase
Price will be remitted to the Company as payment thereof
without receiving any instructions from the Holder. In the
event the sum of the proceeds from the related Pledged
Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and
the investment earnings earned from such investments is in
excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent will
distribute such excess to the Agent for the benefit of the
Holder of the related Type B Security or Type A Security
when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the office of the Agent in
The City of New York maintained for that purpose or, at the
option of the Holder, by check mailed to the address of the
Person entitled thereto at such address as it appears on the
Register.
(f) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Collateral Agent in the
manner described herein, the Company shall not be obligated to
issue any shares of Common Stock in respect of a Purchase
Contract or deliver any certificate therefor to the Holder unless
it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge
Agreement cause the Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, or the Pledged Treasury Securities underlying the
relevant Security to be released from the Pledge by the
Collateral Agent free and clear of any security interest of the
Company and transferred to the Agent for delivery to the Holder
thereof or its designee as soon as practicable and (ii) subject
to the receipt thereof from the Collateral Agent, the Agent
shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof,
transfer such Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
or such Treasury Securities (or, if no such instructions are
given to the Agent by the Holder, the Agent shall hold such Debt
Securities or the Treasury Portfolio, as the case may be, or such
Treasury Securities, and any distribution thereon, in the name of
the Agent or its nominee in trust for the benefit of such
Holder).
(h) The obligations of the Holders to pay the Purchase Price
are non-recourse obligations and are payable solely out of any
Cash Settlement or the proceeds of any Collateral pledged to
secure the obligations of the Holders and in no event will
Holders be liable for any deficiency between the proceeds of
Collateral disposition and the Purchase Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its
receipt of payment in full of the Purchase Price for the shares
of Common Stock purchased by the Holders pursuant to the
foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for
the benefit of the Holders of the Outstanding Securities, one or
more certificates representing the newly issued shares of Common
Stock registered in the name of the Agent (or its nominee) as
custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which
both a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement
Date, being hereinafter referred to as the "Purchase Contract
Settlement Fund") to which the Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together
with settlement instructions thereon duly completed and executed,
the Holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive
pursuant to the provisions of this Article Five (after taking
into account all Securities then held by such Holder) together
with cash in lieu of fractional shares as provided in Section
5.10 and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement
Fund, but without any interest thereon, and the Certificate so
surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder
to the Agent. If any shares of Common Stock issued in respect of
a Purchase Contract are to be registered to a Person other than
the Person in whose name the Certificate evidencing such Purchase
Contract is registered, no such registration shall be made unless
the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name
other than that of the registered Holder of the Certificate
evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or
is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on the Common Stock in Common Stock, the
Settlement Rate, as in effect at the opening of business on the
day following the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate
by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall
be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of
business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), the number
of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall
include any shares issuable in respect of any scrip certificates
issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available
on an equivalent basis to Holders of the Securities upon
settlement of the Purchase Contracts underlying such Securities)
entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to
receive such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than
the Current Market Price per share of the Common Stock on the
date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to
a dividend reinvestment plan), the Settlement Rate, in effect at
the opening of business on the day following the date fixed for
such determination shall be increased by dividing such Settlement
Rate, by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for
subscription or purchase would purchase at such Current Market
Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes
of this paragraph (2), the number of shares of Common Stock at
any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company shall not issue any such
rights, options or warrants in respect of shares of Common Stock
held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common
Stock, the Settlement Rate, in effect at the opening of business
on the day following the day upon which such subdivision or split
becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each
be combined into a smaller number of shares of Common Stock, the
Settlement Rate, in effect at the opening of business on the day
following the day upon which such combination becomes effective
shall be proportionately reduced, such increase or reduction, as
the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness or assets (including securities,
but excluding any rights or warrants referred to in paragraph (2)
of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph
(1) of this Section), the Settlement Rate, shall be adjusted so
that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of
business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the
Common Stock on the date fixed for such determination less the
then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution filed with the Agent) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share
of Common Stock and the denominator shall be such Current Market
Price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders
entitled to receive such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this Section shall
not be applicable.
(5) In case the Company shall, (I) by dividend or
otherwise, distribute to all holders of its Common Stock cash
(excluding any cash that is distributed in a Reorganization Event
to which Section 5.6(b) applies or as part of a distribution
referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of
any other distributions to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (6) of
this Section has been made and (III) the aggregate of any cash
plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described
in a Board Resolution) of consideration payable in respect of any
tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of the
distribution described in clause (I) above and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph
(6) of this Section has been made, exceeds 15% of the product of
the Current Market Price per share of the Common Stock on the
date for the determination of holders of shares of Common Stock
entitled to receive such distribution times the number of shares
of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for
determination, the Settlement Rate, shall be increased so that
the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of
business on the date fixed for determination of the stockholders
entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per
share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the
combined amount distributed or payable in the transactions
described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to
the Current Market Price per share of the Common Stock on such
date for determination.
(6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion
of the Common Stock shall expire and such tender or exchange
offer (as amended upon the expiration thereof) shall require the
payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer)
of Purchased Shares) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution) that combined together with (II) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described
in a Board Resolution), as of the expiration of such tender or
exchange offer, of consideration payable in respect of any other
tender or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Stock expiring
within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been made
and (III) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash
within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been
made, exceeds 15% of the product of the Current Market Price per
share of the Common Stock as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender or
exchange offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) on
the Expiration Time, then, and in each such case, immediately
prior to the opening of business on the day after the date of the
Expiration Time, the Settlement Rate, shall be adjusted so that
the same shall equal the rate determined by dividing the
Settlement Rate immediately prior to the close of business on the
date of the Expiration Time by a fraction (i) the numerator of
which shall be equal to (A) the product of (I) the Current Market
Price per share of the Common Stock on the date of the Expiration
Time and (II) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B)
the amount of cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders
based on the transactions described in clauses (I), (II) and
(III) above (assuming in the case of clause (I) the acceptance,
up to any maximum specified in the terms of the tender or
exchange offer, of Purchased Shares), and (ii) the denominator of
which shall be equal to the product of (A) the Current Market
Price per share of the Common Stock as of the Expiration Time and
(B) the number of shares of Common Stock outstanding (including
any tendered shares) as of the Expiration Time less the number of
all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into
securities including securities other than Common Stock (other
than any reclassification upon a Reorganization Event to which
Section 5.6(b) applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such
distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a
subdivision, split or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to
such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which
such subdivision or split becomes effective" or "the day upon
which such combination becomes effective", as the case may be,
and "the day upon which such subdivision, split or combination
becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common
Stock on any day means the average of the daily Closing Prices
for the 5 consecutive Trading Days selected by the Company
commencing not more than 30 Trading Days before, and ending not
later than, the earlier of the day in question and the day before
the "ex date" with respect to the issuance or distribution
requiring such computation. For purposes of this paragraph, the
term "ex date", when used with respect to any issuance or
distribution, shall mean the first date on which the Common Stock
trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock
(or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Settlement
Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. If an
adjustment is made to the Settlement Rate pursuant to paragraph
(1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable Market Value
solely to determine which of clauses (a), (b) or (c) of the
definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made
by multiplying the Applicable Market Value by a fraction of which
the numerator shall be the Settlement Rate immediately after such
adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6),
(7) or (10) of this Section 5.6(a) and the denominator shall be
the Settlement Rate immediately before such adjustment; provided,
however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the
events contemplated by paragraph (1), (2), (3), (4), (5), (7) or
(10) of this Section 5.6(a) during the period taken into
consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the
Settlement Rate.
(10) The Company may make such increases in the
Settlement Rate, in addition to those required by this Section,
as it considers to be advisable in order to avoid or diminish any
income tax to any holders of shares of Common Stock resulting
from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other
Reorganization Event. In the event of (i) any consolidation or
merger of the Company with or into another Person (other than a
merger or consolidation in which the Company is the continuing
corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another
corporation), (ii) any sale, transfer, lease or conveyance to
another Person of the property of the Company as an entirety or
substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in
connection with a merger or acquisition) or (iv) any liquidation,
dissolution or winding up of the Company other than as a result
of or after the occurrence of a Termination Event (any such
event, a "Reorganization Event"), the Settlement Rate will be
adjusted to provide that each Holder of Securities will receive
on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without
any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement
Date) by a Holder of the number of shares of Common Stock
issuable on account of each Purchase Contract if the Purchase
Contract Settlement Date had occurred immediately prior to such
Reorganization Event assuming such Holder of Common Stock is not
a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (any such Person, a
"Constituent Person"), or an Affiliate of a Constituent Person to
the extent such Reorganization Event provides for different
treatment of Common Stock held by Affiliates of the Company and
non-affiliates and such Holder failed to exercise its rights of
election, if any, as to the kind or amount of securities, cash
and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and
other property receivable upon such Reorganization Event is not
the same for each share of Common Stock held immediately prior to
such Reorganization Event by other than a Constituent Person or
an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"),
then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality
of the non-electing shares). In the event of such a
Reorganization Event, the Person formed by such consolidation,
merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each
Outstanding Security shall have the rights provided by this
Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section.
The above provisions of this Section shall similarly apply to
successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i) forthwith compute the Settlement Rate in accordance
with Section 5.6 and prepare and transmit to the Agent a
Company Certificate setting forth the Settlement Rate, the
method of calculation thereof in reasonable detail, and the
facts requiring such adjustment and upon which such
adjustment is based; and
(ii) within 10 Business Days following the occurrence
of an event that requires an adjustment to the Settlement
Rate pursuant to Section 5.6 (or if the Company is not aware
of such occurrence, as soon as practicable after becoming so
aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement
in reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was determined and setting
forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether
any facts exist which may require any adjustment of the
Settlement Rate, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to
the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or
property, which may at the time be issued or delivered with
respect to any Purchase Contract; and the Agent makes no
representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock pursuant to a Purchase
Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment Payments
or Deferred Contract Adjustment Payments, if the Company shall
have such obligation, and the rights and obligations of Holders
to purchase Common Stock, shall immediately and automatically
terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have
occurred. Upon and after the occurrence of a Termination Event,
the Securities shall thereafter represent the right to receive
the Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming a
part of such Securities in the case of Type A Securities, or
Treasury Securities in the case of Type B Securities, in
accordance with the provisions of Section 4.3 of the Pledge
Agreement. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business
Days thereafter give written notice to the Agent, the Collateral
Agent and to the Holders, at their addresses as they appear in
the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of
this Section 5.9, at the option of the Holder thereof, Purchase
Contracts underlying Securities, having an aggregate Stated
Amount equal to $1,000 or an integral multiple thereof, may be
settled early ("Early Settlement") in the case of Type A
Securities (unless a Tax Event Redemption has occurred) on or
prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date and in the case of Type B
Securities on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, in each case, as
provided herein; provided however, that if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of
the Type A Securities, Purchase Contracts underlying Type A
Securities may be settled early, on or prior to the second
Business Day immediately preceding the Purchase Contract
Settlement Date, but only in an aggregate amount of $40,000,000
or in an integral multiple thereof. In order to exercise the
right to effect Early Settlement with respect to any Purchase
Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate
Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early on the reverse
thereof duly completed and accompanied by payment (payable to the
Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect to
which the Holder has elected to effect Early Settlement plus (ii)
if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date
next preceding any Payment Date to the opening of business on
such Payment Date, an amount equal to the sum of (x) the Contract
Adjustment Payments payable on such Payment Date with respect to
such Purchase Contracts plus (y) in the case of Type A
Certificate, the payment of interest on the related Debt
Securities payable on such Payment Date. Except as provided in
the immediately preceding sentence and subject to the second to
last paragraph of Section 5.2, no payment or adjustment shall be
made upon Early Settlement of any Purchase Contract on account of
any Contract Adjustment Payments accrued on such Purchase
Contract or on account of any dividends on the Common Stock
issued upon such Early Settlement. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying
any Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with
respect to such Securities and if such requirements are first
satisfied after 5:00 p.m., New York City time, on a Business Day
or on a day that is not a Business Day, the "Early Settlement
Date" with respect to such Securities shall be the next
succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder
of the related Securities, the Company shall issue, and the
Holder shall be entitled to receive, shares of Common Stock
on account of each Purchase Contract as to which Early Settlement
is effected (the "Early Settlement Rate"); provided, however,
that upon the Early Settlement of the Purchase Contracts, the
Holder of such related Securities will forfeit the right to
receive any Deferred Contract Adjustment Payments. The Early
Settlement Rate shall be adjusted in the same manner and at the
same time as the Settlement Rate is adjusted. As promptly as
practicable after Early Settlement of Purchase Contracts in
accordance with the provisions of this Section 5.9, the Company
shall issue and shall deliver to the Agent at the Corporate Trust
Office a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement
together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(c) No later than the third Business Day after the
applicable Early Settlement Date the Company shall cause (i) the
shares of Common Stock issuable upon Early Settlement of Purchase
Contracts to be issued and delivered, and (ii) the related Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, in the case of Type A Securities, or the
related Treasury Securities, in the case of Type B Securities, to
be released from the Pledge by the Collateral Agent and
transferred, in each case to the Agent for delivery to the Holder
thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and
the Debt Securities, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the
case may be, from the Collateral Agent, as applicable, the Agent
shall, in accordance with the instructions provided by the Holder
thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Securities, (i)
transfer to the Holder the Debt Securities, Treasury Portfolio or
Treasury Securities, as the case may be, forming a part of such
Securities, and (ii) deliver to the Holder a certificate or
certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu
of any fraction of a share, as provided in Section 5.10.
(e) In the event that Early Settlement is effected with
respect to Purchase Contracts underlying less than all the
Securities evidenced by a Certificate, upon such Early Settlement
the Company shall execute and the Agent shall authenticate,
countersign and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares
of Common Stock shall be issued or delivered upon settlement on
the Purchase Contract Settlement Date or upon Early Settlement of
any Purchase Contracts. If Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time
by the same Holder, the number of full shares of Common Stock
which shall be delivered upon settlement shall be computed on the
basis of the aggregate number of Purchase Contracts evidenced by
the Certificates so surrendered. Instead of any fractional share
of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Purchase Contract
Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value. The Company
shall provide the Agent from time to time with sufficient funds
to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares
of Common Stock pursuant to the Purchase Contracts and in payment
of any Deferred Contract Adjustment Payments; provided, however,
that the Company shall not be required to pay any such tax or
taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any
issuance of a share of Common Stock in a name other than that of
the registered Holder of a Certificate surrendered in respect of
the Securities evidenced thereby, other than in the name of the
Agent, as custodian for such Holder, and the Company shall not be
required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the
transfer or issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall
constitute a component of Type A Securities or Type B Securities,
the Holder of any Type A Security or Type B Security shall have
the right, which is absolute and unconditional (subject to the
right of the Company to defer payment thereof pursuant to Section
5.3, the prepayment of Contract Adjustment Payments pursuant to
Section 5.9(a) and to the forfeiture of any Deferred Contract
Adjustment Payments upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive
payment of each installment of the Contract Adjustment Payments
with respect to the Purchase Contract constituting a part of such
Security on the respective Payment Date for such Security and to
purchase Common Stock pursuant to such Purchase Contract and, in
each such case, to institute suit for the enforcement of any such
payment and right to purchase Common Stock, and such rights shall
not be impaired without the consent of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any
right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined
adversely to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company and such Holder
shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of
such Holder shall continue as though no such proceeding had been
instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates
in the last paragraph of Section 3.10, no right or remedy herein
conferred upon or reserved to the Holders is intended to be
exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or
remedy upon a default shall impair any such right or remedy or
constitute a waiver of any such right. Every right and remedy
given by this Article or by law to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by
such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Type
A Securities or Type B Securities, by its acceptance of such Type
A Securities or Type B Securities shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or
omitted by it as Agent, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent,
to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% of the Outstanding
Securities, or to any suit instituted by any Holder for the
enforcement of payment of interest on any Debt Securities or
Contract Adjustment Payments, if any, on any Purchase Contract on
or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE VII
THE AGENT
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to
the Securities, such duties and only such duties as are
specifically set forth in this Agreement and the Pledge
Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Agent; and
(2) The Agent may, with respect to the Securities,
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the
case of any certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Agent, the Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Agreement.
(b) No provision of this Agreement shall be construed to
relieve the Agent from liability for its own negligent action,
its own negligent failure to act, or its own wilful misconduct,
except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Agent was negligent in
ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or
powers.
(c) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Agent shall be
subject to the provisions of this Section.
(d) The Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the
Company hereunder of which a Responsible Officer of the Agent has
actual knowledge, the Agent shall transmit by mail to the Company
and the Holders of Securities, as their names and addresses
appear in the Register, notice of such default hereunder, unless
such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party
or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of
Directors of the Company may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Agreement the
Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon a Company Certificate of the Company;
(d) the Agent may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(e) the Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Agent, in its
discretion, may make reasonable further inquiry or investigation
into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if
the Agent shall determine to make such further inquiry or
investigation, it shall be given a reasonable opportunity to
examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the Agent shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney or an Affiliate appointed with due care by it
hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Certificates shall
be taken as the statements of the Company and the Agent assumes
no responsibility for their accuracy. The Agent makes no
representations as to the validity or sufficiency of either this
Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the
Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the
Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company, the Collateral Agent or any
other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by
law or provided herein. The Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such
compensation for all services rendered by it hereunder as
the parties shall agree from time to time;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Agent in accordance with any provision of this Agreement
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Agent and any predecessor Agent
for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs
and expenses of defending itself against any claim or
liability in connection with the exercise or performance of
any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall
be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District
of Columbia, authorized under such laws to exercise corporate
trust powers, having (or being a member of a bank holding company
having) a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this
Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no
appointment of a successor Agent pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date
of such resignation. If the instrument of acceptance by a
successor Agent required by Section 7.10 shall not have been
delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any court
of competent jurisdiction for the appointment of a successor
Agent.
(c) The Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities
delivered to the Agent and the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of
the TIA, as if the Agent were an indenture trustee under an
indenture qualified under the TIA, after written request
therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section
7.8 and shall fail to resign after written request therefor by
the Company or by any such Holder, or
(3) the Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Agent or
of its property shall be appointed or any public officer shall
take charge or control of the Agent or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Agent, or (ii) any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Agent and the
appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Agent
shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder
who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the
Agent and each appointment of a successor Agent by mailing
written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in
the applicable Register. Each notice shall include the name of
the successor Agent and the address of its Corporate Trust
Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Agent, every such successor Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Agent
an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Agent; but, on the request of
the Company or the successor Agent, such retiring Agent shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and
deliver to such successor Agent all property and money held by
such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Agent all
such rights, powers and agencies referred to in paragraph (a) of
this Section.
(c) No successor Agent shall accept its appointment unless
at the time of such acceptance such successor Agent shall be
qualified and eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Agent, shall be the successor of the Agent
hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing
of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been authenticated
and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or
consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and
executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
received by the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the
Agent reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date
of such application, and such application states that the
applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Securities and
is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the
Agent shall mail to all the Holders copies of the form of proxy
or other communication which is specified in such request, with
reasonable promptness after a tender to the Agent of the
materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement,
the Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any
Purchase Contract in respect of the obligations of the Holder of
any Security thereunder. The Company agrees, and each Holder of a
Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf
of the Holders shall be solely as agent and attorney-in-fact for
the Holders, and that the Agent shall have no obligation to
perform such Purchase Contracts on behalf of the Holders, except
to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification,
information reporting and withholding (including "backup"
withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the
issuance, delivery, holding, transfer, redemption or exercise of
rights under the Securities. Such compliance shall include,
without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated
agent.
(b) The Agent shall comply with any written direction
received from the Company with respect to the application of such
requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement
rely on any such direction in accordance with the provisions of
Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make
such records available, on written request, to the Company or its
authorized representative within a reasonable period of time
after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the
Agent, at any time and from time to time, may enter into one or
more agreements supplemental hereto, in form satisfactory to the
Company and the Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the
covenants of the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other
provisions herein, or to make any other provisions with respect
to such matters or questions arising under this Agreement,
provided such action shall not adversely affect the interests of
the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority
of the outstanding Purchase Contracts voting together as one
Class, by Act of said Holders delivered to the Company and the
Agent, the Company, when authorized by a Board Resolution, and
the Agent may enter into an agreement or agreements supplemental
hereto for the purpose of modifying in any manner the terms of
the Purchase Contracts, or the provisions of this Agreement or
the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder
of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral
required to be Pledged to secure a Holder's Obligations under the
Purchase Contract, impair the right of the Holder of any Purchase
Contract to receive distributions on the related Collateral
(except for the rights of Holders of Type A Securities to
substitute the Treasury Securities for the Pledged Debt
Securities or the rights of holders of Type B Securities to
substitute Debt Securities for the Pledged Treasury Securities)
or otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such
Collateral;
(3) reduce any Contract Adjustment Payments or any
Deferred Contract Adjustment Payment, or change any place where,
or the coin or currency in which, any Contract Adjustment Payment
is payable;
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price
to purchase shares of Common Stock upon settlement of any
Purchase Contract, change the Purchase Contract Settlement Date
or otherwise adversely affect the Holder's rights under any
Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to
above would adversely affect only the Type A Securities or
the Type B Securities, then only the affected class of
Holder as of the record date for the Holders entitled to
vote thereon will be entitled to vote on such amendment or
proposal, and such amendment or proposal shall not be
effective except with the consent of Holders of not less
than a majority of such class.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such
Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created
by, any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement,
the Agent shall be entitled to receive and (subject to Section
7.1) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but
shall not be obligated to, enter into any such supplemental
agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance
therewith, and such supplemental agreement shall form a part of
this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental
agreement pursuant to this Article may, and shall if required by
the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the
Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and
delivered by the Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate
with any other Person or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any
Person or group of affiliated Persons in one transaction or a
series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other
than the Company) shall be a corporation organized and existing
under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation shall expressly
assume all the obligations of the Company under the Purchase
Contracts, this Agreement and the Pledge Agreement by one or more
supplemental agreements in form reasonably satisfactory to the
Agent and the Collateral Agent, executed and delivered to the
Agent and the Collateral Agent by such corporation, and (ii) the
Company or such successor corporation, as the case may be, shall
not, immediately after such merger or consolidation, or such
sale, assignment, transfer, lease or conveyance, be in default in
the performance of any covenant or condition hereunder, under any
of the Securities or under the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.1, such
successor corporation shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as
the Company. Such successor corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of
Texas Utilities Company any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Agent; and, upon
the order of such successor corporation, instead of the Company,
and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Agent shall authenticate and execute on
behalf of the Holders and deliver any Certificates which
previously shall have been signed and delivered by the officers
of the Company to the Agent for authentication and execution, and
any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to
the Agent for that purpose. All the Certificates so issued shall
in all respects have the same legal rank and benefit under this
Agreement as the Certificates theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing
Securities thereafter to be issued as may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, assignment, transfer, lease or
conveyance, and any such assumption, complies with the provisions
of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the
Holders from time to time of the Securities that it will duly and
punctually perform its obligations under the Purchase Contracts
in accordance with the terms of the Purchase Contracts and this
Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be
presented or surrendered for acquisition of shares of Common
Stock upon settlement of the Purchase Contracts on the Purchase
Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or re-establishment of a
Type A Security and where notices and demands to or upon the
Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Agent
of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Agent
with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office,
and the Company hereby appoints the Agent as its agent to receive
all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough
of Manhattan, The City of New York for such purposes. The Company
will give prompt written notice to the Agent of any such
designation or rescission and of any change in the location of
any such other office or agency. The Company hereby designates as
the place of payment for the Securities the Corporate Trust
Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase
Contract Settlement Date reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common
Stock the full number of shares of Common Stock issuable against
tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding
Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which
may be issued against tender of payment in respect of any
Purchase Contract constituting a part of the Outstanding
Securities will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
TEXAS UTILITIES COMPANY
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
,
-------------------------
as Purchase Contract Agent
By:
----------------------------
Name:
Title:
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND
IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) to the Company or its agent for registration
of transfer, exchange or payment, and any Certificate issued is
registered in the name of Cede & Co., or such other name as
requested by an authorized representative of The Depository Trust
Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.
No. Cusip No.
----- -------
Number of Type A Securities
-------
Form of Face of Type A Certificate
% Type A Securities
----
This Type A Certificate certifies that is the
-----------
registered Holder of the number of Type A Securities set forth
above. Each Type A Security represents (i) either (a) one %
-----
Debt Security due (the "Debt Security") of Texas
------------
Utilities Company (the "Company"), in an aggregate principal
amount of $ , subject to the Pledge of such Debt Securities by
----
such Holder pursuant to the Pledge Agreement or (b) upon the
occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the appropriate Applicable Ownership
Interest of the Treasury Portfolio, subject to the Pledge of such
Applicable Ownership Interest of the Treasury Portfolio by such
Holder pursuant to the Pledge Agreement, and (ii) the rights and
obligations of the Holder under one Purchase Contract with the
Company. All capitalized terms used herein which are defined in
the Purchase Contract Agreement have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, constituting part of each Type A
Securities evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising a portion of
such Type A Securities.
The Pledge Agreement provides that all payments of the
Stated Amount of or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, as the case may be, or payments of
interest on, any (as defined in the Pledge Agreement) or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, constituting part of the Type A
Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the
case of (A) cash distributions with respect to Pledged Debt
Securities or the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of
the Stated Amount or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such
terms) of the Treasury Portfolio, as the case may be, with
respect to any Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
that have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent to the account designated by the Agent,
no later than 2:00 p.m., New York City time, on the Business Day
such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York
City time, on a Business Day, then such payment shall be made no
later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, of any Pledged Debt
Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, to the Company on the
Purchase Contract Settlement Date (as defined herein) in
accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the
Type A Securities of which such Pledged Debt Securities or the
Treasury Portfolio, as the case may be, are a part under the
Purchase Contracts forming a part of such Type A Securities.
Payment of interest on any Debt Security or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case
may be, forming part of a Type A Security evidenced hereby which
are payable quarterly in arrears on
-----------------------------
and each year, commencing , 1998
---------------- ----------------
(a "Payment Date"), shall, subject to receipt thereof by the
Agent from the Collateral Agent, be paid to the Person in whose
name this Type A Certificate (or a Predecessor Type A
Certificate) is registered at the close of business on the Record
Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder
of this Type A Certificate to purchase, and the Company to sell,
on (the "Purchase Contract Settlement Date"), at a
----------
price equal to $10 (the "Stated Amount"), a number of shares of
Common Stock, no par value ("Common Stock"), of the Company,
equal to the Settlement Rate, unless on or prior to the Purchase
Contract Settlement Date there shall have occurred a Termination
Event or an Early Settlement with respect to the Type A
Securities of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the
"Purchase Price") for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date
by application of payment received in respect of the Stated
Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, of the Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, pledged to secure the
obligations under such Purchase Contract of the Holder of the
Type A Security of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of
each Purchase Contract forming part of a Type A Security
evidenced hereby an amount (the "Contract Adjustment Payments")
equal to % per annum of the Stated Amount, computed on the
--
basis of a 360 day year of twelve 30 day months, subject to
deferral at the option of the Company as provided in the Purchase
Contract Agreement and more fully described on the reverse
hereof. Such Contract Adjustment Payments shall be payable to the
Person in whose name this Type A Certificate (or a Predecessor
Type A Certificate) is registered at the close of business on the
Record Date for such Payment Date.
Payment of interest on the Debt Securities or the
appropriate Applicable Ownership Interest (as specified in clause
(B) of the definition of such term) of the Treasury Portfolio, as
the case may be, and Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York or, at the
option of the Company, by check mailed to the address of the
Person entitled thereto as such address appears on the Type A
Register.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Type A
Certificate shall not be entitled to any benefit under the Pledge
Agreement or the Purchase Contract Agreement or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
TEXAS UTILITIES COMPANY
By:
-------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By:
-------------------------------------
not individually but solely as
Attorney-in-Fact of such Holder
By:
-------------------------------------
Name:
Title:
Dated: , 1998
---------
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Type A Certificates referred to in the
within mentioned Purchase Contract Agreement.
By:
-------------------------------------
as Purchase Contract Agent
By:
-------------------------------------
Authorized Officer
(Form of Reverse of Type A Certificate)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of , 1998 (as may
---------
be supplemented from time to time, the "Purchase Contract
Agreement"), between the Company and ,
---------------------------
as Purchase Contract Agent (herein called the "Agent"), to which
Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company, and the Holders and of the
terms upon which the Type A Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder
of this Type A Certificate to purchase, and the Company to sell,
on the Purchase Contract Settlement Date at a price equal to the
Stated Amount (the "Purchase Price"), a number of shares of
Common Stock of the Company equal to the Settlement Rate, unless,
on or prior to the Purchase Contract Settlement Date, there shall
have occurred a Termination Event or Early Settlement with
respect to the Security of which such Purchase Contract is a
part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is equal to or greater than $
----
(the "Threshold Appreciation Price"), shares of Common
-----
Stock per Purchase Contract, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price but is greater than
$ , the number of shares of Common Stock per Purchase
-------
Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than
or equal to $ , shares of Common Stock per Purchase
----- -------
Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock
will be issued upon settlement of Purchase Contracts, as provided
in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related Type A Securities to purchase
at the Purchase Price, and the Company to sell, a number of newly
issued shares of Common Stock equal to the Early Settlement Rate
or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the
Closing Price per share of Common Stock on each of the 20
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. The
"Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal
United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported on the NYSE, if such bid price is not available, the
market value of the Common Stock on such. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading
on any national or regional securities exchange or association at
the close of business and (B) has traded at least once on the
national or regional securities exchange or association that is
the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Type A Certificate shall pay the
Purchase Price for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby by effecting a Cash
Settlement, an Early Settlement or from the proceeds of a
remarketing of the related Pledged Debt Securities of such
holders. A Holder of Type A Securities who does not elect, on or
prior to 5:00 p.m. New York City time on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, to
make an effective Cash Settlement or an Early Settlement, shall
pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of
the sale of the related Pledged Debt Securities held by the
Collateral Agent. Such sale will be made by the Remarketing Agent
pursuant to the terms of the Remarketing Agreement and the
Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If,
as provided in the Purchase Contract Agreement, upon the
occurrence of a Failed Remarketing the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured
creditor with respect to the Pledged Debt Securities related to
this Type A Certificate, any accrued and unpaid interest
(including deferred interest) on such Pledged Debt Securities
will become payable by the Company to the holder of this Type A
Security Certificate in the manner provided for in the Purchase
Contract Agreement.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received
payment in full of the aggregate purchase price for the shares of
Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall
terminate if a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written
notice to the Agent and to the Holders, at their addresses as
they appear in the Type A Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the
Pledged Debt Security (as defined in the Pledge Agreement) or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio forming a part of each Type A Security from the Pledge.
A Type A Security shall thereafter represent the right to receive
the Debt Security or the appropriate Applicable Ownership
Interest of the Treasury Portfolio forming a part of such Type A
Security in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Debt Securities. Upon receipt of notice
of any meeting at which holders of Debt Securities are entitled
to vote or upon the solicitation of consents, waivers or proxies
of holders of Debt Securities, the Agent shall, as soon as
practicable thereafter, mail to the Type A Security holders a
notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Type A Security
holder on the record date set by the Agent therefor (which, to
the extent possible, shall be the same date as the record date
for determining the holders of Debt Securities entitled to vote)
shall be entitled to instruct the Agent as to the exercise of the
voting rights pertaining to the Debt Securities constituting a
part of such holder's Type A Securities and (c) stating the
manner in which such instructions may be given. Upon the written
request of the Type A Security Holders on such record date, the
Agent shall endeavor insofar as practicable to vote or cause to
be voted, in accordance with the instructions set forth in such
requests, the maximum number of Debt Securities as to which any
particular voting instructions are received. In the absence of
specific instructions from the Holder of a Type A Security, the
Agent shall abstain from voting the Debt Security evidenced by
such Type A Securities.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable
on the Tax Event Redemption Date with respect to the Debt
Securities shall be delivered to the Collateral Agent in exchange
for the Pledged Debt Securities. Thereafter, pursuant to the
terms of the Pledge Agreement, the Collateral Agent for the
benefit of the Company will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase, the
Treasury Portfolio and promptly remit the remaining portion of
such Redemption Price to the Agent for payment to the Holders of
such Type A Securities.
Following the occurrence of a Tax Event Redemption prior to
the Purchase Contract Settlement Date, the Holders of Type A
Securities and the Collateral Agent shall have such security
interests rights and obligations with respect to the Treasury
Portfolio as the Holder of Type A Securities and the Collateral
Agent had in respect of the Debt Securities, as the case may be,
subject to the Pledge thereof as provided in Articles II, III,
IV, V and VI, of the Pledge Agreement and any reference herein to
the Debt Securities shall be deemed to be reference to such
Treasury Portfolio.
The Type A Certificates are issuable only in registered form
and only in denominations of a single Type A Security and any
integral multiple thereof. The transfer of any Type A Certificate
will be registered and Type A Certificates may be exchanged as
provided in the Purchase Contract Agreement. The Type A Registrar
may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
A holder who elects to substitute Treasury Securities for Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, thereby creating Type B Securities, shall
be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement,
for so long as the Purchase Contract underlying a Type A Security
remains in effect, such Type A Security shall not be separable
into its constituent parts, and the rights and obligations of the
Holder of such Type A Security in respect of Debt Securities or
the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and Purchase Contract constituting
such Type A Security may be transferred and exchanged only as a
Type A Security. The holder of an Type A Securities may
substitute for the Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio securing
its obligation under the related Purchase Contract, Treasury
Securities in an aggregate principal amount equal to the
aggregate Stated Amount of the Pledged Debt Securities or the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio in
accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. From and after such Collateral
Substitution, the Security for which such Pledged Treasury
Securities secures the holder's obligation under the Purchase
Contract shall be referred to as a "Type B Security." A Holder
may make such Collateral Substitution only in integral multiples
of 100 Type A Securities for 100 Type B Securities; provided,
however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Type A
Securities, a Holder may make such Collateral Substitutions only
in integral multiples of 4,000,000 Type A Securities for
4,000,000 Type B Securities. Such Collateral Substitution may
cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Type
A Certificate shall not exceed $103,500,000. All such adjustments
to the equivalent aggregate principal amount of this Type A
Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of Type B Securities may create or recreate Type A
Securities by delivering to the Collateral Agent Debt Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, with a Stated Amount, in the case of such Debt
Securities, or with the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, in the case of such appropriate
Applicable Ownership Interest of the Treasury Portfolio, equal to
the aggregate principal amount of the Pledged Treasury Securities
in exchange for the release of such Pledged Treasury Securities
in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments
payable in respect of each Purchase Contract to the Person in
whose name the Type A Certificate evidencing such Purchase
Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York or, at
the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Type
A Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or
all of the Contract Adjustment Payments otherwise payable on any
Payment Date, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so
deferred shall bear additional Contract Adjustment Payments
thereon at the rate of % per annum (computed on the basis of a
---
360 day year of twelve 30 day months), compounding on each
succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together
with the additional Contract Adjustment Payments accrued thereon,
are referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any, shall
be due on the next succeeding Payment Date except to the extent
that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date, the Holder of this Type A
Certificate will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of shares of Common
Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Type A
Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then until the Deferred
Contract Adjustment Payments have been paid, the Company shall
not declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases
or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on
the date of such event requiring the Company to purchase capital
stock of the Company, (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one
class or series of the Company's capital stock for another class
or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or a declaration thereunder of a
dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment Payments
or any Deferred Contract Adjustment Payments, shall immediately
and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or
prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Type A Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof,
Purchase Contracts underlying Securities having an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof may
be settled early ("Early Settlement") as provided in the Purchase
Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a
component of the Type A Securities, Holders may early settle Type
A Securities only in integral multiples of 4,000,000 Type A
Securities. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by
this Type A Certificate, the Holder of this Type A Certificate
shall deliver this Type A Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early set forth
below duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to (i) the
product of (A) the Stated Amount times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect
Early Settlement, plus (ii) if such delivery is made with respect
to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening
of business on such Payment Date, an amount equal to the Contract
Adjustment Payments payable on such Payment Date with respect to
such Purchase Contracts. Upon Early Settlement of Purchase
Contracts by a Holder of the related Securities, the Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and
the Holder shall be entitled to receive a number of shares of
Common Stock on account of each Purchase Contract forming part of
a Type A Security as to which Early Settlement is effected equal
to the Early Settlement Rate; provided however, that upon the
Early Settlement of the Purchase Contracts, the Holder thereof
will forfeit the right to receive any Deferred Contract
Adjustment Payments, if any, on such Purchase Contracts. The
Early Settlement Rate shall initially be equal to shares of
Common Stock and shall be adjusted in the same manner and at the
same time as the Settlement Rate is adjusted as provided in the
Purchase Contract Agreement.
Upon registration of transfer of this Type A Certificate,
the transferee shall be bound (without the necessity of any other
action on the part of such transferee, except as may be required
by the Agent pursuant to the Purchase Contract Agreement), under
the terms of the Purchase Contract Agreement and the Purchase
Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by
this Type A Certificate. The Company covenants and agrees, and
the Holder, by its acceptance thereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Type A Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the
related Purchase Contracts forming part of the Type A Securities
evidenced hereby on his behalf as his attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the
Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under
such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into
and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, underlying this Type
A Certificate pursuant to the Pledge Agreement. The Holder
further covenants and agrees, that, to the extent and in the
manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect
to the Stated Amount of the Pledged Debt Securities, or the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, on
the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of
New York.
The Company, the Agent and its Affiliates and any agent of
the Company or the Agent may treat the Person in whose name this
Type A Certificate is registered as the owner of the Type A
Securities evidenced hereby for the purpose of receiving payments
of interest payable quarterly on the Debt Securities, receiving
payments of Contract Adjustment Payments and any Deferred
Contract Adjustment Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not
any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder of
shares of Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - -------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
----------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above
list.
------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
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(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
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(Please Print or Type Name and Address Including Postal Zip Code
of Assignee) the within Type A Certificates and all rights
thereunder, hereby irrevocably constituting and appointing
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attorney to transfer said Type A Certificates on the books of
Texas Utilities Company with full power of substitution in the
premises.
Dated:
----------------- ------------------------------
Signature
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Type A Certificates in every
particular, without alteration
or enlargement or any change
whatsoever.
Signature Guarantee:
------------------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the
Purchase Contract Settlement Date of the Purchase Contracts
underlying the number of Type A Securities evidenced by this Type
A Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident
thereto.
Dated:
------------------ -----------------------------------
Signature
Signature Guarantee:
--------------
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
If shares are to be registered REGISTERED HOLDER
in the name of and delivered
to a Person other than the
Holder, please (i) print such
Person's name and address and
(ii) provide a guarantee of
your signature:
Please print name and address
of Registered Holder:
------------------------------
------------------------------
Name Name
------------------------------
------------------------------
Address Address
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
Social Security or other
Taxpayer Identification
Number, if any -----------------------------
ELECTION TO SETTLE EARLY
The undersigned Holder of this Type A Certificate hereby
irrevocably exercises the option to effect Early Settlement in
accordance with the terms of the Purchase Contract Agreement with
respect to the Purchase Contracts underlying the number of Type A
Securities evidenced by this Type A Certificate specified below.
The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment
for any fractional share and any Type A Certificate representing
any Type A evidenced hereby as to which Early Settlement of the
related Purchase Contracts is not effected, to the undersigned at
the address indicated below unless a different name and address
have been indicated below. Pledged Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, deliverable upon such Early
Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in
the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated:
---------------------- ----------------------------------
Signature
Signature Guarantee:
--------------------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock or
Type A Certificates are to be
registered in the name of and
delivered to and Pledged Debt
Securities, or the Treasury REGISTERED HOLDER
Portfolio, as the case may be,
are to be transferred to a
Person other than the Holder,
please print such Person's
name and address:
Please print name and address
of Registered Holder:
------------------------------
------------------------------
Name Name
------------------------------
------------------------------
Address Address
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
Social Security or other
Taxpayer Identification
Number, if any
------------------------------
Transfer Instructions for Pledged Debt Securities, or the
Treasury Portfolio, as the case may be, Transferable Upon Early
Settlement or a Termination Event:
---------------------------------------------------------------
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[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
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Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Principal Certificate officer of
Amount Amount following such Trustee or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
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EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF.
THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, AND ANY PAYMENT THEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST THEREIN.
No. Number of Type B Securities Cusip No.
--------- ------ ---------
Form of Face of Type B Certificate
This Type B Certificate certifies that
-----------------------
is the registered Holder of the number of Type B Securities set
forth above. Each Type B Security represents (i) a 1/100
undivided beneficial ownership interest, of a Treasury Security
having a principal amount at maturity equal to $1,000, subject to
the Pledge of such Treasury Security by such Holder pursuant to
the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Texas Utilities Company,
a Texas corporation (the "Company"). All capitalized terms used
herein which are defined in the Purchase Contract Agreement have
the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Type B Securities evidenced hereby have
been pledged to the Collateral Agent, for the benefit of the
Company, to secure the obligations of the Holder under the
Purchase Contract comprising a portion of such Type B Securities.
Each Purchase Contract evidenced hereby obligates the Holder
of this Type B Certificate to purchase, and the Company, to sell,
on (the "Purchase Contract Settlement Date"), at a
-------------
price equal to $10 (the "Stated Amount"), a number of shares of
Common stock, no par value per share ("Common Stock"), of the
Company equal to the Settlement Rate, unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Type
B Securities of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price for the
shares of Common Stock purchased pursuant to each Purchase
Contract evidenced hereby will be paid by application of the
Proceeds from the Treasury Securities pledged to secure the
obligations under such Purchase Contract in accordance with the
terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract evidenced hereby an amount (the "Contract
Adjustment Payments") equal to % per annum of the Stated
--
Amount, computed on the basis of the actual number of days
elapsed in a year of 360 day year of twelve 30 day months, as the
case may be, subject to deferral at the option of the Company as
provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. Such Contract Adjustment
Payments shall be payable to the Person in whose name this Type B
Certificate (or a Predecessor Type B Certificate) is registered
at the close of business on the Record Date for such Payment
Date.
Contract Adjustment Payments will be payable at the office of
the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled
thereto as such address appears on the Type B Register.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Type B
Certificate shall not be entitled to any benefit under the Pledge
Agreement or the Purchase Contract Agreement or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
TEXAS UTILITIES COMPANY
By:
------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under
the Purchase Contracts)
By: ,
-----------------------------
not individually but solely as
Attorney-in-Fact of such
Holder
By:
-----------------------------
Name:
Title:
Dated: , 1998
--------------
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Type B Securities referred to in the
within-mentioned Purchase Contract Agreement.
By: ,
--------------------------
as Purchase Contract Agent
By:
--------------------------
Authorized Signatory
(Reverse of
Type B Certificate)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of , 1998 (as may be
-------
supplemented from time to time, the "Purchase Contract
Agreement") between the Company and The First National Bank of
Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference
is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the
terms upon which the Type B Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder
of this Type B Certificate to purchase, and the Company to sell,
on the Purchase Contract Settlement Date at a price equal to the
Stated Amount (the "Purchase Price") a number of shares of Common
Stock of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event or an Early Settlement with respect
to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $ (the
------
"Threshold Appreciation Price"), shares of Common Stock per
---
Purchase Contract, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price but is greater than
$ , the number of shares of Common Stock per Purchase
-------
Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than
or equal to $ , then shares of Common Stock per
------- ----
Purchase Contract, in each case subject to adjustment as provided
in the Purchase Contract Agreement. No fractional shares of
Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing
Prices per share of Common Stock on each of the twenty
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. The
"Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal
United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market
value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading
on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Type B Certificate shall pay the
Purchase Price for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby by effecting either an
Early Settlement of each such Purchase Contract or by applying a
principal amount of the Pledged Treasury Securities underlying
such Holder's Type B Securities equal to the Stated Amount of
such Purchase Contract to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received
payment in full of the aggregate purchase price for the shares of
Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall
terminate if a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written
notice to the Agent and to the Holders, at their addresses as
they appear in the Type B Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the
Pledged Treasury Securities (as defined in the Pledge Agreement)
forming a part of each Type B Certificate.
The Type B Certificates are issuable only in registered form
and only in denominations of a single Type B Security and any
integral multiple thereof. The transfer of any Type B Certificate
will be registered and Type B Certificates may be exchanged as
provided in the Purchase Contract Agreement. The Type B Registrar
may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
A Holder who elects to substitute Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby
recreating Type A Securities, shall be responsible for any fees
or expenses associated therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying a Type B Security remains in effect, such Type B
Security shall not be separable into its constituent parts, and
the rights and obligations of the Holder of such Type B Security
in respect of the Treasury Security and the Purchase Contract
constituting such Type B Security may be transferred and
exchanged only as a Type B Security. A Holder of Type B
Securities may create or recreate Type A Securities by delivering
to the Collateral Agent Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a
Stated Amount, in the case of such Debt Securities, or with the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, in
the case of such appropriate Applicable Ownership Interest of the
Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in exchange for the release of
such Pledged Treasury Securities in accordance with the terms of
the Purchase Contract Agreement and the Pledge Agreement. From
and after such substitution, the Holder's Security shall be
referred to as a "Type A Security." Such substitution may cause
the equivalent aggregate principal amount of this Certificate to
be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Type B
Certificate shall not exceed $103,500,000. All such adjustments
to the equivalent aggregate principal amount of this Type B
Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of a Type A Security may create or recreate a Type B
Security by delivering to the Collateral Agent Treasury
Securities in an aggregate principal amount equal to the
aggregate principal amount of the Pledged Debt Securities or the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as
the case may be, in exchange for the release of such Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, in accordance with
the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Type B Security may be
effected only in multiples of 100 Type A Securities for 100 Type
B Securities; provided, however, if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the
Type A Securities, a Holder may make such Collateral Substitution
in integral multiples of 4,000,000 Type A Securities for
4,000,000 Type B Securities.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments
payable in respect of each Purchase Contract to the Person in
whose name the Type B Certificate evidencing such Purchase
Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York or, at
the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Type
B Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or
all of the Contract Adjustment Payments otherwise payable on any
Payment Date, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so
deferred shall bear additional Contract Adjustment Payments
thereon at the rate of % per annum (computed on the basis of
----
a 360 day year of twelve 30 day months), compounding on each
succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments together with the
additional Contract Adjustment Payments accrued thereon, are
referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any, shall
be due on the next succeeding Payment Date except to the extent
that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date, the Holder of this Type B
Certificate will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of Shares of Common
Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Type B
Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred
Contract Adjustment Payments have been paid, the Company shall
not declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases
or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to
the conversion or exchange provisions of the Company's capital
stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or the declaration thereunder of
a dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay Contract Adjustment Payments or
any Deferred Contract Adjustment Payments, shall immediately and
automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior
to the Purchase Contract Settlement Date, a Termination Event
shall have occurred. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two
business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Type B Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the
Treasury Securities from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof,
Purchase Contracts underlying Securities having an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof may
be settled early ("Early Settlement") as provided in the Purchase
Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced
by this Type B Certificate, the Holder of this Type B Certificate
shall deliver this Type B Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early set forth
below duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to (i) the
product of (A) the Stated Amount times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect
Early Settlement, plus (ii) if such delivery is made with respect
to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening
of business on such Payment Date, an amount equal to the Contract
Adjustment Payments payable, if any, on such Payment Date with
respect to such Purchase Contracts. Upon Early Settlement of
Purchase Contracts by a Holder of the related Securities, the
Pledged Treasury Securities underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and
the Holder shall be entitled to receive, a number of shares of
Common Stock on account of each Purchase Contract forming part of
a Type B Security as to which Early Settlement is effected equal
to shares of Common Stock per Purchase Contract (the "Early
-----
Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, the Holder thereof will
forfeit the right to receive any Deferred Contract Adjustment
Payments on such Purchase Contracts. The Early Settlement Rate
shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
Upon registration of transfer of this Type B Certificate, the
transferee shall be bound (without the necessity of any other
action on the part of such transferee, except as may be required
by the Agent pursuant to the Purchase Contract Agreement), under
the terms of the Purchase Contract Agreement and the Purchase
Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by
this Type B Certificate. The Company covenants and agrees, and
the Holder, by his acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Type B Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the
related Purchase Contracts forming part of the Type B Securities
evidenced hereby on his behalf as its attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the
Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under
such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into
and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this Type B Certificate pursuant to the
Pledge Agreement. The Holder further covenants and agrees, that,
to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged
Treasury Securities on the Purchase Contract Settlement Date
shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or
interest in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders
of a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by,
and construed in accordance with, the laws of the State of New
York.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Type
B Certificate is registered as the owner of the Type B Securities
evidenced hereby for the purpose of receiving payments of
interest on the Treasury Securities, receiving payments of
Contract Adjustment Payments and any Deferred Contract Adjustment
Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent nor any such agent
shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder of
shares of Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - --------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
-----------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above
list.
--------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
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(Please insert Social Security or Taxpayer I.D. or
other Identifying Number of Assignee)
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(Please Print or Type Name and Address Including
Postal Zip Code of Assignee)
the within Type B Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
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attorney to transfer said Type B Certificates on the books of
Texas Utilities Company with full power of substitution in the
premises.
Dated:
--------------------- -----------------------------------
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Type B Certificates in
every particular, without
alteration or enlargement or any
change whatsoever.
Signature Guarantee:
--------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the
Purchase Contract Settlement Date of the Purchase Contracts
underlying the number of Type B Securities evidenced by this Type
B Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident
thereto.
Dated:
------------------- -----------------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
If shares are to be registered REGISTERED HOLDER
in the name of and delivered
to a Person other than the
Holder, please print such
Person's name and address: Please print name and address
of Registered Holder:
----------------------------- -----------------------------
Name Name
----------------------------- -----------------------------
Address Address
Social Security or other
Taxpayer Identification
Number, if any
-----------------------------
ELECTION TO SETTLE EARLY
The undersigned Holder of this Type B Certificate hereby
irrevocably exercises the option to effect Early Settlement in
accordance with the terms of the Purchase Contract Agreement with
respect to the Purchase Contracts underlying the number of Type B
Securities evidenced by this Type B Certificate specified below.
The option to effect Early Settlement may be exercised only with
respect to Purchase Contracts underlying Type B Securities with
an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such
Early Settlement be registered in the name of, and delivered,
together with a check in payment for any fractional share and any
Type B Certificate representing any Type B Securities evidenced
hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been
indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the
transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident
thereto.
Dated:
---------------------- -------------------------
Signature
Signature Guarantee:
-----------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock of REGISTERED HOLDER
Type B Certificates are to be
registered in the name of and
delivered to and Pledged
Treasury Securities are to be
transferred to a Person other
than the Holder, please print
such Person's name and
address: Please print name and address
of Registered Holder:
------------------------------ ------------------------------
Name Name
------------------------------ ------------------------------
Address Address
Social Security or other
Taxpayer Identification
Number, if any
------------------------------
Transfer Instructions for Pledged Treasury Securities
Transferable Upon Early Settlement or a Termination Event:
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[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
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Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Principal Certificate officer of
Amount Amount following such Trustee or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
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EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
Attention:
Re: Securities of Texas Utilities Company (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2]
of the Pledge Agreement, dated as of , 1998, among the
------- ---
Company, yourselves, as Collateral Agent, and ourselves, as
Purchase Contract Agent and as attorney-in-fact for the holders
of [Type A Securities] [Type B Securities] from time to time,
that the holder of securities listed below (the "Holder") has
elected to substitute [$ aggregate [principal amount] of
-----
Treasury Securities] [$ aggregate principal amount of Debt
-------
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] in exchange for the
[Pledged Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged
Treasury Securities] held by you in accordance with the Pledge
Agreement and has delivered to us a notice stating that the
Holder has Transferred [Treasury Securities] [Debt Securities or
the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] to you, as Collateral Agent. We
hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be], and upon the payment by such Holder of any
applicable fees, to release the [Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to
such [Type A Securities] [Type B Securities] to us in accordance
with the Holder's instructions.
Date: By:
------------------------ -------------------------------
Name:
Title:
Signature Guarantee:
--------- ------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] for the [Pledged Debt Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
--------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------
---------------------------
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Attention:
Re: Securities of Texas Utilities Company (the "Company")
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent,
$ aggregate principal amount of [Treasury Securities]
-------
[Debt Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] in exchange for
the [Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] held by the Collateral Agent,
in accordance with Section [4.1][4.2] of the Pledge Agreement,
dated , 1998, between you, the Company and the
------- ---
Collateral Agent. The undersigned Holder has paid the Collateral
Agent all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] related to such [Type A
Securities] [Type B Securities].
Dated: By:
------------------ -------------------------------
Name:
Title:
Signature Guarantee:
------------
Please print name and address of Registered Holder:
-------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------
---------------------------
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
Attention:
Re: Securities of Texas Utilities Company (the "Company")
The undersigned Holder hereby irrevocably notifies you
in accordance with Section 5.4 of the Purchase Contract
Agreement, dated as of , 1998 among the Company,
------ ---
yourselves, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00 a.m.
New York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date, (in lawful money of the United
States by [certified or cashiers check or] wire transfer, in each
case in immediately available funds), $ as the Purchase
---------
Price for the shares of Common Stock issuable to such Holder by
the Company under the related Purchase Contract on the Purchase
Contract Settlement Date. The undersigned Holder hereby instructs
you to notify promptly the Collateral Agent of the undersigned
Holders election to make such cash settlement with respect to the
Purchase Contracts related to such Holder's [Type A Securities]
[Type B Securities].
Dated:
----------------------- -----------------------------
Signature
Signature Guarantee:
--------- ------------------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
-------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------
---------------------------