Exhibit 4(b)
ONCOR ELECTRIC DELIVERY COMPANY
OFFICER'S CERTIFICATE
1-S-1
Establishing the Form and Certain Terms of the 6.375%
Senior Secured Notes due 2012 and the 7.000% Senior Secured Notes due 2032.
The undersigned, Kirk R. Oliver, Vice President of Oncor Electric
Delivery Company (the "Company"), (all capitalized terms used herein which are
not defined herein but are defined in the Indenture referred to below, shall
have the meanings specified in the Indenture), pursuant to a Board Resolution
dated April 8, 2002 and Sections 201 and 301 of the Indenture, does hereby
certify to The Bank of New York (the "Trustee"), as Trustee under the Indenture
and Deed of Trust of the Company dated as of May 1, 2002 (as heretofore
supplemented, the "Indenture") that:
1. The Securities of the first series to be issued under the Indenture
(the "2012 Notes") shall be initially issued in a series designated
"6.375% Senior Secured Notes due 2012," and the Securities of the
second series to be issued under the Indenture (the "2032 Notes," and
together with the 2012 Notes, the "Notes") shall be initially issued in
a series designated "7.000% Senior Secured Notes due 2032"; the 2012
Notes shall be in substantially the form set forth in Exhibit A hereto,
and the 2032 Notes shall be in substantially the form set forth in
Exhibit B hereto;
2. The 2012 Notes shall mature and the principal shall be due and payable
together with all accrued and unpaid interest thereon on May 1, 2012,
and the 2032 Notes shall mature and the principal shall be due and
payable together with all accrued and unpaid interest thereon on May 1,
2032, and the Company shall not have any right to extend the Maturity
of the Notes as contemplated in Section 301(d) of the Indenture;
3. The Notes shall bear interest as provided in the applicable form
thereof set forth in Exhibits A and B hereto; the Interest Payment
Dates for the Notes shall be May 1 and November 1 of each year,
commencing November 1, 2002;
4. Each installment of interest on a Note shall be payable as provided in
the applicable form thereof set forth as Exhibits A and B hereto; the
Company shall not have any right to extend any interest payment periods
for the Notes as contemplated in Section 301(e) of the Indenture;
5. The principal of, premium, if any, and each installment of interest on
the Notes shall be payable and registration of transfers and exchanges
in respect of the Notes may be effected, at the office or agency of the
Company in The City of New York; and notices and demands to or upon the
Company in respect of the Notes may be served at the office or agency
of the Company in The City of New York; the Corporate Trust Office of
the Trustee will initially be the agency of the Company for such
payment, registration and registration of transfers and exchanges and
service of notices and demands, and the Company hereby appoints the
Trustee as its agent for all such purposes; and the Trustee will
initially be the Security Registrar and the Paying Agent for the Notes;
provided, however, that the Company reserves the right to change, by
one or more Officer's Certificates, any such office or agency and such
agent.
6. The Regular Record Dates for the interest payable on any given Interest
Payment Date with respect to the Notes shall be April 16 for the May 1
Interest Payment Date and October 17 for the November 1 Interest
Payment Date;
7. The Notes of each series are subject to redemption as provided in the
forms thereof set forth in Exhibits A and B hereto;
8. The Notes of each series are "Benefitted Securities" and shall have the
benefit of the covenant of the Company contained in Section 707 of the
Indenture;
9. No service charge shall be made for the registration of transfer or
exchange of the Notes; provided, however, that the Company may require
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with the exchange or transfer;
10. The Notes shall be initially issued in global form registered in the
name of Cede & Co. (as depository for The Depository Trust Company
("DTC"); provided, that the Company reserves the right to provide for
another depository, registered as a clearing agency under the Exchange
Act, to act as depository for the global Notes (DTC and any such
successor depository, the "Depository"); beneficial interests in Notes
issued in global form may not be exchanged in whole or in part for
individual certificated Notes in definitive form, and no transfer of a
global Note in whole or in part may be registered in the name of any
Person other than the Depository or its nominee except that (i) if the
Depository (A) has notified the Company that it is unwilling or unable
to continue as depository for the global Notes or (B) has ceased to be
a clearing agency registered under the Exchange Act and, in either
case, a successor depository for such global Notes has not been
appointed, the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Notes,
will authenticate and deliver Notes in definitive certificated form in
an aggregate principal amount equal to the principal amount of the
global Notes representing such Notes in exchange for such global Notes,
such definitive Notes to be registered in the names provided by the
Depository; each global Note (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of the
outstanding Notes to be represented by such global Note (ii) shall be
registered in the name of the Depository or its nominee, (iii) shall be
delivered by the Trustee to the Depository, its nominee, any custodian
for the Depository or otherwise pursuant to the Depository's
instruction and (iv) shall bear a legend restricting the transfer of
such global Note to any person other than the Depository or its
nominee; none of the Company, the Trustee, any Paying Agent or any
Authenticating Agent will have any responsibility or liability for any
aspect of the records relating to, or payments made on account of,
beneficial ownership interests in a global Note or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests; the Notes in global form will contain restrictions
on transfer, substantially as described in the form set forth in
Exhibit A and Exhibit B hereto;
11. The Notes will be initially issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"). Each Note,
whether in a global form or in a certificated form, shall bear the
non-registration legend and the registration rights legend in
substantially the form set forth in such form, unless otherwise agreed
by the Company, such agreement to be confirmed in writing to the
Trustee. Nothing in the Indenture, the Notes or this certificate shall
be construed to require the Company to register any Notes under the
Securities Act, unless otherwise expressly agreed by the Company,
confirmed in writing to the Trustee, or to make any transfer of such
Notes in violation of applicable law. The Company will enter into a
registration rights agreement with the initial purchasers of the Notes
pursuant to which, among other things, the Notes may be exchanged for
Notes registered under the Securities Act. The Notes registered under
the Securities Act shall be in substantially the form of Exhibit A,
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with respect to the 2012 Notes, and Exhibit B, with respect to the 2032
Notes, but in each case, without the non-registration legend, the
registration rights legend, the Certificate of Transfer and the form of
Accredited Investor Certificate. The Trustee, at the request of the
Company, shall authenticate and deliver notes registered under the
Securities Act in exchange for an equal principal amount of Notes of
such series that are not registered;
12. It is contemplated that beneficial interests in Notes owned by
qualified institutional buyers (as defined in Rule 144A under the
Securities Act) ("QIBs") or sold to QIBs in reliance upon Rule 144A
under the Securities Act will be represented by one or more separate
certificates in global form registered in the name of Cede & Co., as
registered owner and as nominee for DTC; beneficial interests in Notes
sold to foreign purchasers pursuant to Regulation S under the
Securities Act will be evidenced by one or more separate certificates
in global form (each a "Regulation S Global Certificate") and will be
registered in the name of Cede & Co., as registered owner and as
nominee for DTC for the accounts of Euroclear and Cedel Bank; prior to
the 40th day after the date of initial issuance of the Notes,
beneficial interests in a Regulation S Global Certificate may be held
only through Euroclear or Cedel Bank; Notes acquired by Institutional
Accredited Investors (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) ("IAIs") and other eligible transferees, who
are not QIBs and who are not foreign purchasers pursuant to Regulation
S under the Securities Act, will be in certificated form.
In connection with any transfer of Notes, the Trustee, the Security
Registrar and the Company shall be under no duty to inquire into, may
conclusively presume the correctness of, and shall be fully protected
in relying upon the certificates and other information (in the forms
attached hereto as Exhibits A and B, for use in connection with the
transfer of the Notes in certificated form, or Exhibit C, for use in
connection with the transfer of beneficial interests in one certificate
in global form to another certificate or to a Note in certificated
form, or otherwise) received from the Holders and any transferees of
any Notes regarding the validity, legality and due authorization of any
such transfer, the eligibility of the transferee to receive such Note
and any other facts and circumstances related to such transfer;
13. The Trustee, the Security Registrar and the Company will have no
responsibility under the Indenture for transfers of beneficial
interests in the Notes, for any depository records of beneficial
interests or for any transactions between the Depository and beneficial
owners;
14. If the Company shall make any deposit of money and/or Eligible
Obligations with respect to any Notes, or any portion of the principal
amount thereof, as contemplated by Section 801 of the Indenture, the
Company shall not deliver an Officer's Certificate described in clause
(z) in the first paragraph of said Section 801 unless the Company shall
also deliver to the Trustee, together with such Officer's Certificate,
either:
(A) an instrument wherein the Company, notwithstanding the satisfaction
and discharge of its indebtedness in respect of such Notes, shall
assume the obligation (which shall be absolute and unconditional) to
irrevocably deposit with the Trustee or Paying Agent such additional
sums of money, if any, or additional Eligible Obligations (meeting the
requirements of Section 801), if any, or any combination thereof, at
such time or times, as shall be necessary, together with the money
and/or Eligible Obligations theretofore so deposited, to pay when due
the principal of and premium, if any, and interest due and to become
due on such Notes or portions thereof, all in accordance with and
subject to the provisions of said Section 801; provided, however, that
such instrument may state that the obligation of the Company to make
additional deposits as aforesaid shall be subject to the delivery to
the Company by the Trustee of a notice asserting the deficiency
3
accompanied by an opinion of an independent public accountant of
nationally recognized standing, selected by the Trustee, showing the
calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a result of a change
in law occurring after the date of this certificate, the Holders of
such Notes, or portions of the principal amount thereof, will not
recognize income, gain or loss for United States federal income tax
purposes as a result of the satisfaction and discharge of the Company's
indebtedness in respect thereof and will be subject to United States
federal income tax on the same amounts, at the same times and in the
same manner as if such satisfaction and discharge had not been
effected.
15. The Eligible Obligations with respect to the Notes of each series shall
be Government Obligations.
16. So long as the 2012 Notes and the 2032 Notes are Outstanding, Section
707 of the Indenture shall read as set forth in Exhibit D hereto.
17. The 2012 Notes shall have such other terms and provisions as are
provided in the form set forth in Exhibit A hereto and the 2032 Notes
shall have such other terms and provisions as are provided in the form
set forth in Exhibit B hereto;
18. No Event of Default under the Indenture has occurred or is occurring;
19. The undersigned has read all of the covenants and conditions contained
in the Indenture relating to the issuance of the Notes and the
definitions in the Indenture relating thereto and in respect of
compliance with which this certificate is made;
20. The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents
accompanying this certificate, and upon discussions by the undersigned
with officers and employees of the Company familiar with the matters
set forth herein;
21. In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed
opinion as to whether or not such covenants and conditions have been
complied with; and
22. In the opinion of the undersigned, such conditions and covenants, and
conditions precedent, if any, provided for in the Indenture (including
any covenants compliance with which constitutes a condition precedent)
relating to the authentication and delivery of the Notes requested in
the accompanying Company Order have been complied with.
4
IN WITNESS WHEREOF, I have executed this Officer's Certificate this 6th
day of May, 2002 in New York, New York.
/s/ Kirk R. Oliver
-----------------------------------------
Name: Kirk R. Oliver
Title: Vice President
5
Exhibit A
[FORM OF 2012 NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
ONCOR ELECTRIC DELIVERY COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & Co. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[non-registration legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (A) (1) TO THE COMPANY, (2) IN A
TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (5)
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
A CERTIFICATE IN THE FORM ATTACHED TO THIS SECURITY IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (6) IN ACCORDANCE WITH ANOTHER
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (7) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF EACH STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
A-1
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER, REGULATION S UNDER THE
SECURITIES ACT."
[registration rights legend]
The Holder of this Security, by acceptance hereof, will be deemed to
have agreed to be bound by the provisions of the Registration Rights Agreement
dated May 6, 2002, among the Company and the initial purchasers of this
Security.
NO._______________ CUSIP NO.
ONCOR ELECTRIC DELIVERY COMPANY
6.375% SENIOR SECURED NOTES DUE 2012
ONCOR ELECTRIC DELIVERY COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (herein referred to as the
"Company", which term includes any successor Person under the Indenture referred
to below), for value received, hereby promises to pay to
or registered assigns, the principal sum of _____________________ ($_________)
Dollars on May 1, 2012, and to pay interest on said principal sum semi-annually
in arrears on May 1 and November 1 of each year commencing November 1, 2002
(each an "Interest Payment Date") at the rate of 6.375% per annum until the
principal hereof is paid or made available for payment. Interest on the
Securities of this series will accrue from and including May 6, 2002, to and
excluding the first Interest Payment Date, and thereafter will accrue from and
including the last Interest Payment Date to which interest has been paid or duly
provided for. No interest will accrue on the Securities with respect to the day
on which the Securities mature. In the event that any Interest Payment Date is
not a Business Day, then payment of interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of such delay) with the same force and effect as if
made on the Interest Payment Date. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the April 16
and October 17 (each a "Regular Record Date") immediately preceding such
Interest Payment Date, except that interest payable at Maturity will be payable
to the Person to whom principal shall be paid. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture referred to herein.
Payment of the principal of (and premium, if any) and interest at
Maturity on this Security shall be made upon presentation of this Security at
the office or agency of the Company maintained for that purpose in The City of
A-2
New York, in the State of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that, at the option of the Company,
interest on this Security (other than interest payable at Maturity) may be paid
by check mailed to the address of the person entitled thereto, as such address
shall appear on the Security Register, and provided, further, that if such
person is a securities depositary, such payment may be made by such other means
in lieu of check as shall be agreed upon by the Company, the Trustee and such
person.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture and in the
Officer's Certificate establishing the terms of the Securities of this series.
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture and Deed of Trust dated as of May 1, 2002
(herein, together with any amendments or supplements thereto, called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture, for a statement of
the property mortgaged, pledged and held in trust, the nature and extent of the
security, the conditions upon which the Lien of the Indenture may be released
and to the Indenture, Board Resolutions and Officer's Certificate creating the
series designated on the face hereof, for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The acceptance of
this Security shall be deemed to constitute the consent and agreement by the
Holder thereof to all of the terms and provisions of the Indenture. This
Security is one of the series designated on the face hereof.
This Security is subject to redemption at the election of the
Company, in whole at any time or in part from time to time, at a redemption
price as calculated by the Company equal to the greater of
100% of the principal amount of the Notes of this series being
redeemed, or
the sum of the present values of the remaining scheduled payments of
principal and interest on the Notes of this series being redeemed, discounted to
the redemption date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 25 basis points,
plus, in each case, accrued interest on those Notes of this
series to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.
A-3
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the H. 15
Daily Update of the Federal Reserve Bank or (ii) if such release (or any
successor release) is not published or does not contain prices on such business
day, the Reference Treasury Dealer Quotation actually obtained by the Trustee
for such redemption date.
"H.15(519)" means the weekly statistical release entitled "H.15
(519) Selected Interest Rates", or any successor publication, published by the
Board of Governors of the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519) available
through the worldwide website of the Board of Governors of the Federal Reserve
System or any successor site or publication.
"Independent Investment Banker" means the Reference Treasury
Dealer appointed by the Company.
"Reference Treasury Dealer" means Lehman Brothers Inc., and its
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means, with respect to the
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
Notice of redemption (other than at the option of the Holder)
shall be given by mail to Holders of Securities, not less than 30 days prior to
the date fixed for redemption, all as provided in the Indenture. As provided in
the Indenture, notice of redemption at the election of the Company as aforesaid
may state that such redemption shall be conditional upon the receipt by the
applicable Paying Agent or Agents of money sufficient to pay the principal of
and premium, if any, and interest, if any, on this Security on or prior to the
date fixed for such redemption; a notice of redemption so conditioned shall be
of no force or effect if such money is not so received and, in such event, the
Company shall not be required to redeem this Security.
In the event of redemption of this Security in part only, a new
Security or Securities of this series of like tenor representing the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of this Security upon compliance with certain conditions
set forth in the Indenture.
The Indenture contains provisions for release of the Lien thereof
upon compliance with certain conditions set forth therein.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
A-4
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of all series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of a majority in aggregate principal
amount of the Securities of all series at the time Outstanding in respect of
which an Event of Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of Securities of all series at the time Outstanding in respect
of which an Event of Default shall have occurred and be continuing a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and integral multiples of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein and herein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor and of authorized denominations, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company shall not be required to execute and the Security
Registrar shall not be required to register the transfer of or exchange of (a)
Securities of this series during a period of 15 days immediately preceding the
date notice is given identifying the serial numbers of the Securities of this
series called for redemption or (b) any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part. The Company shall not be required to make transfers or exchanges of the
Securities of this series for a period of 15 days next preceding an Interest
Payment Date.
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The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the
absolute owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
Each Holder shall be deemed to understand that the offer and sale
of the Securities of this series have not been registered under the Securities
Act and that the Securities of this series may not be offered or sold except as
permitted in the following sentence. Each Holder shall be deemed to agree, on
its own behalf and on behalf of any accounts for which it is acting as
hereinafter stated, that if such Holder sells any Securities of this series,
such Holder will do so only (A) to the Company, (B) to a person whom it
reasonably believes is a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, (C) to an
institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) that, prior to such transfer, furnishes to the
Trustee a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Securities of this series, (D)
in an offshore transaction in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (F) pursuant to an effective
registration statement under the Securities Act, and each Holder is further
deemed to agree to provide to any person purchasing any of the Securities of
this series from it a notice advising such purchaser that resales of the
Securities of this series are restricted as stated herein.
Each Holder shall be deemed to understand that, on any proposed
resale of any Securities of this series pursuant to the exemption from
registration under Rule 144 under the Securities Act, any Holder making any such
proposed resale will be required to furnish to the Trustee and Company such
certifications, legal opinions and other information as the Trustee and Company
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions.
This Security shall be governed by and construed in accordance
with the laws of the State of New York (including without limitation Section
5-1401 of the New York General Obligations Law or any successor to such
statute), except to the extent that the Trust Indenture Act shall be applicable
and except to the extent that the laws of the State of Texas shall mandatorily
govern.
As provided in the Indenture, no recourse shall be had for the
payment of the principal of or premium, if any, or interest on any Securities,
or any part thereof, or for any claim based thereon or otherwise in respect
thereof, or of the indebtedness represented thereby, or upon any obligation,
covenant or agreement under the Indenture, against, and no personal liability
whatsoever shall attach to, or be incurred by, any incorporator, stockholder,
member, officer or director, as such, past, present or future of the Company or
of any predecessor or successor corporation (either directly or through the
Company or a predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that the Indenture and all the Securities are solely corporate obligations and
that any such personal liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the execution of the
Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to herein by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
A-6
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed in New York, New York.
ONCOR ELECTRIC DELIVERY COMPANY
By:______________________________________
Vice President
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK, as Trustee
By:______________________________________
Authorized Signatory
A-7
[CERTIFICATE OF TRANSFER]
6.375% Senior Secured Notes due 2012
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Name and address of assignee must be printed or typewritten.
the within Security of the Company and does hereby irrevocably constitute and
appoint
to transfer the said Security on the books of the within-named Company, with
full power of substitution in the premises.
The undersigned certifies that said Security is being resold, pledged or
otherwise transferred as follows: (check one)
/ / to the Company;
/ / to a Person whom the undersigned reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act") purchasing
for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or other transfer
is being made in reliance on Rule 144A;
/ / in an offshore transaction in accordance with Rule 904 of Regulation
S under the Securities Act;
/ / to an institution that is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring
this Security for investment purposes and not for distribution; (attach
a copy of an Accredited Investor Certificate in the form annexed signed
by an authorized officer of the transferee)
/ / as otherwise permitted by the non-registration legend appearing on
this Security; or
/ / as otherwise agreed by the Company, confirmed in writing to the
Trustee, as follows: [describe]
Dated:
--------------------------------------------------------------------------
A-8
[FORM OF ACCREDITED INVESTOR CERTIFICATE]
[Transferor Name and Address]
Ladies and Gentlemen:
In connection with our proposed purchase of 6.375% Senior Secured Notes due
2012 (the "Senior Notes") issued by Oncor Electric Delivery Company ("Issuer"),
we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum") relating to the Senior Notes and such other
information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agree to the matters
stated under the caption NOTICE TO INVESTORS in such Offering
Memorandum, and the restrictions on duplication or circulation of, or
disclosure relating to, such Offering Memorandum.
2. We understand that any subsequent transfer of the Senior
Notes is subject to certain restrictions and conditions set forth in
the Indenture relating to Senior Notes (the "Indenture") and that any
subsequent transfer of the Senior Notes is subject to certain
restrictions and conditions set forth under NOTICE TO INVESTORS in the
Offering Memorandum and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Senior Notes except in
compliance with such restrictions and conditions and the Securities Act
of 1933, as amended ("Securities Act").
3. We understand that the offer and sale of the Senior Notes
have not been registered under the Securities Act, and that the Senior
Notes may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we sell any Senior
Notes, we will do so only (A) to the Company, (B) to a person whom we
reasonably believe is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act that purchases for its
own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, (C) to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes to the
Trustee (as defined in the Indenture) a signed letter containing
certain representations and agreements relating to the restrictions on
transfer of the Senior Notes (substantially in the form of this
letter), (D) in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act (if
available), (F) in accordance with another applicable exemption from
the registration requirements of the Securities Act, or (G) pursuant to
an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing any of the Senior
Notes from us a notice advising such purchaser that resales of the
Senior Notes are restricted as stated herein.
4. We understand that, on any proposed resale of any Senior
Note, we will be required to furnish to the Trustee and Issuer such
certifications, legal opinions and other information as the Trustee and
Issuer may reasonably require to confirm that the proposed sale
A-9
complies with the foregoing restrictions. We further understand that
the Senior Notes purchased by us will bear a legend to the foregoing
effect.
5. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Senior Notes, and we and any accounts for which are
acting are each able to bear the economic risk of our or its
investment.
6. We are acquiring the Senior Notes purchased by us for our
own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You, the Issuer and the Trustee are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
By:___________________________
Name:
Title:
A-10
Exhibit B
[FORM OF 2032 NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
ONCOR ELECTRIC DELIVERY COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[non-registration legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (A) (1) TO THE COMPANY, (2) IN A
TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (5)
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
A CERTIFICATE IN THE FORM ATTACHED TO THIS SECURITY IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (6) IN ACCORDANCE WITH ANOTHER
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (7) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF EACH STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
B-1
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER, REGULATION S UNDER THE
SECURITIES ACT."
[registration rights legend]
The Holder of this Security, by acceptance hereof, will be deemed to
have agreed to be bound by the provisions of the Registration Rights Agreement
dated May 6, 2002, among the Company and the initial purchasers of this
Security.
NO._______________ CUSIP NO.
ONCOR ELECTRIC DELIVERY COMPANY
7.000% SENIOR SECURED NOTES DUE 2032
ONCOR ELECTRIC DELIVERY COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (herein referred to as the
"Company", which term includes any successor Person under the Indenture referred
to below), for value received, hereby promises to pay to
or registered assigns, the principal sum of _____________________ ($_________)
Dollars on May 1, 2032, and to pay interest on said principal sum semi-annually
in arrears on May 1 and November 1 of each year commencing November 1, 2002
(each an "Interest Payment Date") at the rate of 7.000% per annum until the
principal hereof is paid or made available for payment. Interest on the
Securities of this series will accrue from and including May 6, 2002, to and
excluding the first Interest Payment Date, and thereafter will accrue from and
including the last Interest Payment Date to which interest has been paid or duly
provided for. No interest will accrue on the Securities with respect to the day
on which the Securities mature. In the event that any Interest Payment Date is
not a Business Day, then payment of interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of such delay) with the same force and effect as if
made on the Interest Payment Date. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on April 16 and
October 17 (each a "Regular Record Date") immediately preceding such Interest
Payment Date, except that interest payable at Maturity will be payable to the
Person to whom principal shall be paid. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture referred to herein.
B-2
Payment of the principal of (and premium, if any) and interest at
Maturity on this Security shall be made upon presentation of this Security at
the office or agency of the Company maintained for that purpose in The City of
New York, in the State of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, provided, however, that, at the option of the Company,
interest on this Security (other than interest payable at Maturity) may be paid
by check mailed to the address of the person entitled thereto, as such address
shall appear on the Security Register, and provided, further, that if such
person is a securities depositary, such payment may be made by such other means
in lieu of check as shall be agreed upon by the Company, the Trustee and such
person.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture and in the
Officer's Certificate establishing the terms of the Securities of this series.
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture and Deed of Trust dated as of May 1, 2002
(herein, together with any amendments or supplements thereto, called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture, for a statement of
the property mortgaged, pledged and held in trust, the nature and extent of the
security, the conditions upon which the Lien of the Indenture may be released
and to the Indenture, Board Resolutions and Officer's Certificate creating the
series designated on the face hereof, for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The acceptance of
this Security shall be deemed to constitute the consent and agreement by the
Holder thereof to all of the terms and provisions of the Indenture. This
Security is one of the series designated on the face hereof.
This Security is subject to redemption at the election of the
Company, in whole at any time or in part from time to time, at a redemption
price equal to the greater of
100% of the principal amount of the Notes of this series being redeemed, or
the sum of the present values of the remaining scheduled payments of
principal and interest on the Notes of this series being redeemed, discounted to
the redemption date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 30 basis points,
plus, in each case, accrued interest on those Notes of this
series to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.
B-3
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the H. 15
Daily Update of the Federal Reserve Bank or (ii) if such release (or any
successor release) is not published or does not contain prices on such business
day, the Reference Treasury Dealer Quotation actually obtained by the Trustee
for such redemption date.
"H.15(519)" means the weekly statistical release entitled "H.15
(519) Selected Interest Rates", or any successor publication, published by the
Board of Governors of the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519) available
through the worldwide website of the Board of Governors of the Federal Reserve
System or any successor site or publication.
"Independent Investment Banker" means the Reference Treasury
Dealer appointed by the Company.
"Reference Treasury Dealer" means Lehman Brothers Inc., and its
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means, with respect to the
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
Notice of redemption (other than at the option of the Holder)
shall be given by mail to Holders of Securities, not less than 30 days prior to
the date fixed for redemption, all as provided in the Indenture. As provided in
the Indenture, notice of redemption at the election of the Company as aforesaid
may state that such redemption shall be conditional upon the receipt by the
applicable Paying Agent or Agents of money sufficient to pay the principal of
and premium, if any, and interest, if any, on this Security on or prior to the
date fixed for such redemption; a notice of redemption so conditioned shall be
of no force or effect if such money is not so received and, in such event, the
Company shall not be required to redeem this Security.
In the event of redemption of this Security in part only, a new
Security or Securities of this series of like tenor representing the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of this Security upon compliance with certain conditions
set forth in the Indenture.
The Indenture contains provisions for release of the Lien thereof
upon compliance with certain conditions set forth therein.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
B-4
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of all series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of a majority in aggregate principal
amount of the Securities of all series at the time Outstanding in respect of
which an Event of Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of Securities of all series at the time Outstanding in respect
of which an Event of Default shall have occurred and be continuing a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and integral multiples of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein and herein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor and of authorized denominations, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company shall not be required to execute and the Security
Registrar shall not be required to register the transfer of or exchange of (a)
Securities of this series during a period of 15 days immediately preceding the
date notice is given identifying the serial numbers of the Securities of this
series called for redemption or (b) any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part. The Company shall not be required to make transfers or exchanges of the
Securities of this series for a period of 15 days next preceding an Interest
Payment Date.
B-5
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the
absolute owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
Each Holder shall be deemed to understand that the offer and sale
of the Securities of this series have not been registered under the Securities
Act and that the Securities of this series may not be offered or sold except as
permitted in the following sentence. Each Holder shall be deemed to agree, on
its own behalf and on behalf of any accounts for which it is acting as
hereinafter stated, that if such Holder sells any Securities of this series,
such Holder will do so only (A) to the Company, (B) to a person whom it
reasonably believes is a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, (C) to an
institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) that, prior to such transfer, furnishes to the
Trustee a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Securities of this series, (D)
in an offshore transaction in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (F) pursuant to an effective
registration statement under the Securities Act, and each Holder is further
deemed to agree to provide to any person purchasing any of the Securities of
this series from it a notice advising such purchaser that resales of the
Securities of this series are restricted as stated herein.
Each Holder shall be deemed to understand that, on any proposed
resale of any Securities of this series pursuant to the exemption from
registration under Rule 144 under the Securities Act, any Holder making any such
proposed resale will be required to furnish to the Trustee and Company such
certifications, legal opinions and other information as the Trustee and Company
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions.
This Security shall be governed by and construed in accordance
with the laws of the State of New York (including without limitation Section
5-1401 of the New York General Obligations Law or any successor to such
statute), except to the extent that the Trust Indenture Act shall be applicable
and except to the extent that the laws of the State of Texas shall mandatorily
govern.
As provided in the Indenture, no recourse shall be had for the
payment of the principal of or premium, if any, or interest on any Securities,
or any part thereof, or for any claim based thereon or otherwise in respect
thereof, or of the indebtedness represented thereby, or upon any obligation,
covenant or agreement under the Indenture, against, and no personal liability
whatsoever shall attach to, or be incurred by, any incorporator, stockholder,
member, officer or director, as such, past, present or future of the Company or
of any predecessor or successor corporation (either directly or through the
Company or a predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that the Indenture and all the Securities are solely corporate obligations and
that any such personal liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the execution of the
Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to herein by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
B-6
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed in New York, New York.
ONCOR ELECTRIC DELIVERY COMPANY
By:_____________________________________
Vice President
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK, as Trustee
By:_____________________________________
Authorized Signatory
B-7
[CERTIFICATE OF TRANSFER]
7.000% Senior Secured Notes due 2032
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Name and address of assignee must be printed or typewritten.
the within Security of the Company and does hereby irrevocably constitute and
appoint
to transfer the said Security on the books of the within-named Company, with
full power of substitution in the premises.
The undersigned certifies that said Security is being resold, pledged or
otherwise transferred as follows: (check one)
/ / to the Company;
/ / to a Person whom the undersigned reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act") purchasing
for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or other transfer
is being made in reliance on Rule 144A;
/ / in an offshore transaction in accordance with Rule 904 of Regulation
S under the Securities Act;
/ / to an institution that is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring
this Security for investment purposes and not for distribution; (attach
a copy of an Accredited Investor Certificate in the form annexed signed
by an authorized officer of the transferee)
/ / as otherwise permitted by the non-registration legend appearing on
this Security; or
/ / as otherwise agreed by the Company, confirmed in writing to the
Trustee, as follows: [describe]
Dated:
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B-8
[FORM OF ACCREDITED INVESTOR CERTIFICATE]
[Transferor Name and Address]
Ladies and Gentlemen:
In connection with our proposed purchase of 7.000% Senior Secured Notes due
2032 (the "Senior Notes") issued by Oncor Electric Delivery Company ("Issuer"),
we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum") relating to the Senior Notes and such other
information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agree to the matters
stated under the caption NOTICE TO INVESTORS in such Offering
Memorandum, and the restrictions on duplication or circulation of, or
disclosure relating to, such Offering Memorandum.
2. We understand that any subsequent transfer of the Senior
Notes is subject to certain restrictions and conditions set forth in
the Indenture relating to Senior Notes (the "Indenture") and that any
subsequent transfer of the Senior Notes is subject to certain
restrictions and conditions set forth under NOTICE TO INVESTORS in the
Offering Memorandum and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Senior Notes except in
compliance with such restrictions and conditions and the Securities Act
of 1933, as amended ("Securities Act").
3. We understand that the offer and sale of the Senior Notes
have not been registered under the Securities Act, and that the Senior
Notes may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we sell any Senior
Notes, we will do so only (A) to the Company, (B) to a person whom we
reasonably believe is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act that purchases for its
own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, (C) to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes to the
Trustee (as defined in the Indenture) a signed letter containing
certain representations and agreements relating to the restrictions on
transfer of the Senior Notes (substantially in the form of this
letter), (D) in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act (if
available), or (F) in accordance with another applicable exemption from
the registration requirements of the Securities Act, and we further
agree to provide to any person purchasing any of the Senior Notes from
us a notice advising such purchaser that resales of the Senior Notes
are restricted as stated herein.
4. We understand that, on any proposed resale of any Senior
Note, we will be required to furnish to the Trustee and Issuer such
certifications, legal opinions and other information as the Trustee and
Issuer may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that
the Senior Notes purchased by us will bear a legend to the foregoing
effect.
B-9
5. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Senior Notes, and we and any accounts for which are
acting are each able to bear the economic risk of our or its
investment.
6. We are acquiring the Senior Notes purchased by us for our
own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You, the Issuer and the Trustee are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
By:___________________________
Name:
Title:
B-10
EXHIBIT C
[CERTIFICATE OF TRANSFER]
ONCOR ELECTRIC DELIVERY COMPANY
__% Senior Secured Notes due ____
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Name and address of assignee must be printed or typewritten.
$-------------------------------------------------------------------------------
principal amount of beneficial interest in the referenced Security of the
Company and does hereby irrevocably constitute and appoint
to transfer the said beneficial interest in such Security, with full power of
substitution in the premises.
The undersigned certifies that said beneficial interest in said Security is
being resold, pledged or otherwise transferred as follows: (check one)
/ / to the Company;
/ / to a Person whom the undersigned reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act") purchasing
for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or other transfer
is being made in reliance on Rule 144A;
/ / in an offshore transaction in accordance with Rule 904 of Regulation
S under the Securities Act;
/ / to an institution that is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring
this Security for investment purposes and not for distribution; (attach
a copy of an Accredited Investor Certificate in the form annexed signed
by an authorized officer of the transferee)
/ / as otherwise permitted by the non-registration legend appearing on
this Security; or
/ / as otherwise agreed by the Company, confirmed in writing to the
Trustee, as follows: [describe]
Dated:____________________________
All terms used in this certificate which are defined in the
Indenture pursuant to which said Security was issued shall have the meanings
assigned to them in the Indenture.
C-1
[FORM OF ACCREDITED INVESTOR CERTIFICATE]
[Transferor Name and Address]
Ladies and Gentlemen:
In connection with our proposed purchase of __% Senior Secured Notes due ___
(the "Senior Notes") issued by Oncor Electric Delivery Company ("Issuer"), we
confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum") relating to the Senior Notes and such other
information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agree to the matters
stated under the caption NOTICE TO INVESTORS in such Offering
Memorandum, and the restrictions on duplication or circulation of, or
disclosure relating to, such Offering Memorandum.
2. We understand that any subsequent transfer of the Senior
Notes is subject to certain restrictions and conditions set forth in
the Indenture relating to Senior Notes (the "Indenture") and that any
subsequent transfer of the Senior Notes is subject to certain
restrictions and conditions set forth under NOTICE TO INVESTORS in the
Offering Memorandum and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Senior Notes except in
compliance with such restrictions and conditions and the Securities Act
of 1933, as amended ("Securities Act").
3. We understand that the offer and sale of the Senior Notes
have not been registered under the Securities Act, and that the Senior
Notes may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we sell any Senior
Notes, we will do so only (A) to the Company, (B) to a person whom we
reasonably believe is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act that purchases for its
own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, (C) to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes to the
Trustee (as defined in the Indenture) a signed letter containing
certain representations and agreements relating to the restrictions on
transfer of the Senior Notes (substantially in the form of this
letter), (D) in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act (if
available), (F) in accordance with another applicable exemption from
the registration requirements of the Securities Act, or (G) pursuant to
an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing any of the Senior
Notes from us a notice advising such purchaser that resales of the
Senior Notes are restricted as stated herein.
4. We understand that, on any proposed resale of any Senior
Notes, we will be required to furnish to the Trustee and Issuer such
certifications, legal opinions and other information as the Trustee and
Issuer may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that
the Senior Notes purchased by us will bear a legend to the foregoing
effect.
C-2
5. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Senior Notes, and we and any accounts for which are
acting are each able to bear the economic risk of our or its
investment.
6. We are acquiring the Senior Notes purchased by us for our
own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You, the Issuer and the Trustee are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
By:__________________________
Name:
Title:
C-3
EXHIBIT D
SECTION 707. Limitation on Secured Debt.
(a) Except as otherwise specified as contemplated by Section 301
for Securities of any series, so long as any Securities of any series are
Outstanding, the Company shall not issue any Secured Debt (other than Permitted
Secured Debt), without the consent of the Holders of a majority in principal
amount of all the Outstanding Securities of all series and Tranches with respect
to which this covenant is specified as contemplated by Section 301 (the
"Benefitted Securities"), considered as one class, except as expressly
contemplated in subsections (b) and (c) of this Section.
(b) The provisions of subsection (a) shall not prohibit the
creation or existence of any Secured Debt if either:
(i) the Company shall make effective provision whereby the
Benefitted Securities shall be secured at least equally and
ratably with such Secured Debt; or
(ii) the Company shall deliver to the Trustee bonds, notes
or other evidences of indebtedness secured by the Lien which
secures such Secured Debt (hereinafter called "Secured
Obligations") (i) in an aggregate principal amount equal to the
aggregate principal amount of each series then Outstanding, (ii)
maturing (or being subject to mandatory redemption) on the Stated
Maturities of such series and (iii) containing, in addition to
any mandatory redemption provisions applicable to all Secured
Obligations outstanding under such Lien and any mandatory
redemption provisions contained therein pursuant to clause (ii)
above, mandatory redemption provisions correlative to the
provisions, if any, for the mandatory redemption (pursuant to a
sinking fund or otherwise) of the Securities of such series or
for the redemption thereof at the option of the Holder, as well
as a provision for mandatory redemption upon an acceleration of
the maturity of all Outstanding Securities of such series
following an Event of Default (such mandatory redemption to be
rescinded upon the rescission of such acceleration); it being
expressly understood that such Secured Obligations (x) may, but
need not, bear interest, (y) may, but need not, contain
provisions for the redemption thereof at the option of the
issuer, any such redemption to be made at a redemption price or
prices not less than the principal amount thereof and (z) shall
be held by the Trustee for the benefit of the Holders of all
Securities of such series from time to time Outstanding subject
to such terms and conditions relating to surrender to the
Company, transfer restrictions, voting, application of payments
of principal and interest and other matters as shall be set forth
in an indenture supplemental hereto specifically providing for
the delivery to the Trustee of such Secured Obligations.
(c) If the Company shall elect either of the alternatives
described in subsection (b), the Company shall deliver to the Trustee:.
(i) an indenture supplemental to this Indenture (i)
together with evidence of appropriate inter-creditor
arrangements, whereby this Indenture shall be secured by the Lien
referred to in subsection (b) equally and ratably with all other
indebtedness secured by such Lien or (ii) providing for the
delivery to the Trustee of Secured Obligations;
(ii) an Officer's Certificate (i) stating that, to the
knowledge of the signer, (x) no Event of Default has occurred
and is continuing and (y) no event has occurred and is continuing
D-1
which entitles the secured party under such Lien to accelerate
the maturity of the indebtedness outstanding thereunder and (y)
stating the aggregate principal amount of indebtedness issuable,
and then proposed to be issued, under and secured by such Lien;
(iii) an Opinion of Counsel (i) if the Outstanding
Securities under this Indenture are to be secured by such Lien,
to the effect that all Securities then Outstanding are entitled
to the benefit of such Lien equally and ratably with all other
indebtedness outstanding secured by such Lien or (ii) if Secured
Obligations are to be delivered to the Trustee, to the effect
that such Secured Obligations have been duly issued under such
Lien and constitute valid obligations, entitled to the benefit of
such Lien equally and ratably with all other indebtedness then
outstanding secured by such Lien.
(d) For purposes of this Section, except as otherwise expressly
provided or unless the context otherwise requires:
(i) "DEBT", with respect to any Person, means (A)
indebtedness of such Person for borrowed money evidenced by a
bond, debenture, note or other written instrument or agreement by
which such Person is obligated to repay such borrowed money, (B)
any guaranty by such Person of any such indebtedness of another
Person, and (C) any Capitalized Lease Liabilities of the Company.
"Debt" does not include, among other things, (w) indebtedness of
such person under any installment sale or conditional sale
agreement or any other agreement relating to indebtedness for the
deferred purchase price of property or services, (x) any trade
obligation (including obligations under power or other commodity
purchase agreements and any hedges or derivatives associated
therewith), or other obligations of such Person in the ordinary
course of business, (y) obligations of such Person under any
lease agreement that are not Capitalized Lease Liabilities, or
(z) any Liens securing indebtedness, neither assumed nor
guaranteed by the Company nor on which it customarily pays
interest, existing upon real estate or rights in or relating to
real estate acquired by the Company for substation, transmission
line, transportation line, distribution line or right of way
purposes.
(ii) "PERMITTED SECURED DEBT" means, as of any particular
time, any of the following:
(A) Class A Bonds and Securities issued prior to the
Release Date;
(B) Secured Debt which matures less than one year from
the date of the issuance or incurrence thereof and is not
extendible at the option of the issuer; and any refundings,
refinancings and/or replacements of any such Secured Debt by
or with similar Secured Debt which matures less than one
year from the date of such refunding, refinancing and/or
replacement and is not extendible at the option of the
issuer;
(C) Secured Debt secured by Purchase Money Liens or any
other Liens existing or placed upon property at the time of,
or within one hundred eighty (180) days after, the
acquisition thereof by the Company, and any refundings,
refinancings and/or replacements of any such Secured Debt;
provided, however, that no such Purchase Money Lien or other
Lien shall extend to or cover any property of the Company
other than (i) the property so acquired and improvements,
extensions and additions to such property and renewals,
D-2
replacements and substitutions of or for such property or
any part or parts thereof and (ii) with respect to Purchase
Money Liens, other property subsequently acquired by the
Company;
(D) Secured Debt relating to governmental obligations
the interest on which is not included in gross income for
purpose of federal income taxation pursuant to Section 103
of the Internal Revenue Code of 1986, as amended (or any
successor provision of law), for the purpose of financing or
refinancing, in whole or in part, costs of acquisition or
construction of property to be used by the Company, to the
extent that the Lien which secures such Secured Debt is
required either by applicable law or by the issuer of such
governmental obligations or is otherwise necessary in order
to establish or maintain such exclusion from gross income;
and any refundings, refinancings and/or replacements of any
such Secured Debt by or with similar Secured Debt;
(E) Secured Debt (i) which is related to the
construction or acquisition of property not previously
owned by the Company or (ii) which is related to the
financing of a project involving the development or
expansion of property of the Company and (iii) in either
case, the obligee in respect of which has no recourse to the
Company or any property of the Company other than the
property constructed or acquired with the proceeds of such
transaction or the project financed with the proceeds of
such transaction (or the proceeds of such property or such
project); and any refundings, refinancings and/or
replacements of any Secured Debt by or with Secured Debt
described in clause (iii) above; and
(F) in addition to the Permitted Secured Debt described
in clauses (A) through (E) above, Secured Debt not otherwise
so permitted in this Section 707 in an aggregate principal
amount not exceeding the greater of 10% of the Company's Net
Tangible Assets or 10% of Capitalization.
"CAPITALIZATION" means the total of all the following
items appearing on, or included in, the Company's
unconsolidated balance sheet; (i) liabilities for
indebtedness maturing more than 12 months from the date of
determination, and (ii) common stock, common stock expense,
accumulated other comprehensive income or loss, preferred
stock, preference stock, premium on common stock and
retained earnings (however the foregoing may be designated),
less, to the extent not otherwise deducted, the cost of
shares of the Company's capital stock held in the Company's
treasury, if any. Capitalization shall be determined in
accordance with generally accepted accounting principles and
practices applicable to the type of business in which the
Company is engaged, and may be determined as of the date not
more than 60 days prior to the happening of the event for
which the determination is being made.
"CAPITALIZED LEASE LIABILITIES" means the amount, if
any, shown as liabilities on the Company's unconsolidated
balance sheet for capitalized leases of electric
transmission and distribution property not owned by the
Company, which amount shall be determined in accordance with
generally accepted accounting principles and practices
applicable to the type of business in which the Company is
engaged.
D-3
"NET TANGIBLE ASSETS" means the amount shown as total
assets on the Company's unconsolidated balance sheet, less
(i) intangible assets including, but without limitation,
such items as goodwill, trademarks, trade names, patents,
unamortized debt discount and expense and other regulatory
assets carried as an asset on the Company's unconsolidated
balance sheet, (ii) appropriate adjustments, if any, on
account of minority interests. Net Tangible Assets shall be
determined in accordance with generally accepted accounting
principles and practices applicable to the type of business
in which the Company is engaged.
(iii) "SECURED DEBT" means Debt created, issued, incurred
or assumed by the Company which is secured by a Lien upon any
property (other than Excepted Property) of the Company, real,
personal or mixed, of whatever kind or nature and wherever
located. For purposes of this Section, any Capitalized Lease
Liabilities of the Company will be deemed to be Debt secured by a
Lien on the Company's property.