Exhibit 4(c)
ONCOR ELECTRIC DELIVERY COMPANY
OFFICER'S CERTIFICATE
2-S-2
ESTABLISHING THE FORM AND CERTAIN TERMS OF THE 6.375% SENIOR SECURED NOTES
DUE 2015 AND THE 7.250% SENIOR SECURED NOTES DUE 2033.
The undersigned, John M. Casey, Assistant Treasurer 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 November 12, 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 third series to be issued under the Indenture (the
"2015 Notes") shall be initially issued in a series designated "6.375%
Senior Secured Notes due 2015," and the Securities of the fourth series to
be issued under the Indenture (the "2033 Notes," and together with the 2015
Notes, the "Notes") shall be initially issued in a series designated
"7.250% Senior Secured Notes due 2033"; the 2015 Notes shall be in
substantially the form set forth in Exhibit A hereto, and the 2033 Notes
shall be in substantially the form set forth in Exhibit B hereto;
2. The 2015 Notes shall mature and the principal shall be due and payable
together with all accrued and unpaid interest thereon on January 15, 2015,
and the 2033 Notes shall mature and the principal shall be due and payable
together with all accrued and unpaid interest thereon on January 15, 2033,
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 January 15 and July 15 of each year, commencing July 15,
2003;
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 December 31 for the January
15 Interest Payment Date and July 1 for the July 15 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
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Exhibit A, with respect to the 2015 Notes, and Exhibit B, with respect to
the 2033 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
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deficiency accompanied by an opinion of an independent public accountant of
nationally recognized standing, selected by the Trustee, showing the
calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a result of a change in
law occurring after the date of this certificate, the Holders of such
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 2015 Notes and the 2033 Notes are Outstanding, Section 707
of the Indenture shall read as set forth in Exhibit D hereto;
17. The 2015 Notes shall have such other terms and provisions as are provided
in the form set forth in Exhibit A hereto and the 2033 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.
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IN WITNESS WHEREOF, I have executed this Officer's Certificate this 20th
day of December, 2002.
/s/ John M. Casey
---------------------------------
Name: John M. Casey
Title: Assistant Treasurer
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Exhibit A
[FORM OF 2015 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 ONCOR ELECTRIC DELIVERY COMPANY ("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
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IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(k)(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
December 20, 2002, among the Company and the initial purchasers of this
Security.
NO._______________ CUSIP NO.
ONCOR ELECTRIC DELIVERY COMPANY
6.375% SENIOR SECURED NOTES DUE 2015
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 January 15, 2015, and to pay interest on said principal sum
semi-annually in arrears on January 15 and July 15 of each year commencing July
15, 2003 (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 December 20, 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 of this series with
respect to the day on which the Securities of this series 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 December 31 for the January 15 Interest Payment Date and on July
1 for the July 15 Interest Payment Date (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.
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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 as
calculated by the Company equal to the greater of
o 100% of the principal amount of the Securities of this series
being redeemed, or
o the sum of the present values of the remaining scheduled payments
of principal and interest on the Securities 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 Securities 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 Securities to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
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pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Securities.
"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 Merrill Lynch Government Securities,
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.
The Company shall deliver to the Trustee before any Redemption Date
for the Securities of this series its calculation of the Redemption Price
applicable to such redemption. Except with respect to the obligations of the
Trustee expressly set forth in the foregoing definitions of "Comparable Treasury
Issue" and "Comparable Treasury Price," the Trustee shall be under no duty to
inquire into, may presume the correctness of, and shall be fully protected in
acting upon the Company's calculation of any Redemption Price of the Securities
of this series.
In lieu of stating the Redemption Price, notices of redemption of the
Securities of this series shall state substantially the following: "The
Redemption Price of the Securities of this series to be redeemed shall equal the
sum of (a) the greater of (i) 100% of the principal amount of such Securities of
this series, or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on the Senior Notes 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 accrued interest on the principal amount hereof to the 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
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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.
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.
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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.
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.
A-6
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-7
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
ONCOR ELECTRIC DELIVERY COMPANY
By:____________________________________
[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-8
[CERTIFICATE OF TRANSFER]
6.375% SENIOR SECURED NOTES DUE 2015
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-9
[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 2015 (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 complies with the
A-10
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-11
EXHIBIT B
[FORM OF 2033 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 ONCOR ELECTRIC DELIVERY COMPANY ("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
B-1
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(k)(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
December 20, 2002, among the Company and the initial purchasers of this
Security.
NO._______________ CUSIP NO.
ONCOR ELECTRIC DELIVERY COMPANY
7.250% SENIOR SECURED NOTES DUE 2033
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 January 15, 2033, and to pay interest on said principal sum
semi-annually in arrears on January 15 and July 15 of each year commencing July
15, 2003 (each an "Interest Payment Date") at the rate of 7.250% 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 December 20, 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 December 31 for the January 15 Interest Payment Date and on July 1 for the
July 15 Interest Payment Date (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
B-2
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
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
o 100% of the principal amount of the Securities of this series
being redeemed, or
o the sum of the present values of the remaining scheduled payments
of principal and interest on the Securities 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 35 basis points,
plus, in each case, accrued interest on those Securities 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.
B-3
"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.
"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 Merrill Lynch Government Securities,
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.
The Company shall deliver to the Trustee before any Redemption Date
for the Securities of this series its calculation of the Redemption Price
applicable to such redemption. Except with respect to the obligations of the
Trustee expressly set forth in the foregoing definitions of "Comparable Treasury
Issue" and "Comparable Treasury Price," the Trustee shall be under no duty to
inquire into, may presume the correctness of, and shall be fully protected in
acting upon the Company's calculation of any Redemption Price of the Securities
of this series.
In lieu of stating the Redemption Price, notices of redemption of the
Securities of this series shall state substantially the following: "The
Redemption Price of the Securities of this series to be redeemed shall equal the
sum of (a) the greater of (i) 100% of the principal amount of such Securities of
this series, or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on the Securities 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 35
basis points, plus accrued interest on the principal amount hereof to the
Redemption Date."
B-4
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.
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.
B-5
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.
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.
B-6
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-7
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
ONCOR ELECTRIC DELIVERY COMPANY
By:____________________________________
[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-8
[CERTIFICATE OF TRANSFER]
7.250% SENIOR SECURED NOTES DUE 2033
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: _________________________
B-9
[FORM OF ACCREDITED INVESTOR CERTIFICATE]
[Transferor Name and Address]
Ladies and Gentlemen:
In connection with our proposed purchase of 7.250% Senior Secured
Notes due 2033 (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-10
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-11
EXHIBIT C
[CERTIFICATE OF TRANSFER]
ONCOR ELECTRIC DELIVERY COMPANY
______% SENIOR SECURED NOTES DUE 20__
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 20__ (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
D-1
and (y) no event has occurred and is continuing 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, replacements and substitutions of or for
D-2
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.
D-4