Oncorelectricdeliverycollc 20021002 S4 0

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\pard\intbl\plain\brdrt\brsp48\brdrs\f3\fs12 Source: ONCOR ELECTRIC DELIVERY CO
LLC, S-4, October 02, 2002
\cell\pard\intbl\plain\brdrt\brsp48\brdrs\f3\fs12\qr Powered by Morningstar Docu
ment Research.
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The information contained herein may not be copied, adapted or distributed and i
s not warranted to be accurate, complete or timely. The user assumes all risks f
or any damages or losses arising from any use of this information, except to the
extent such damages or losses cannot be limited or excluded by applicable law.
Past financial performance is no guarantee of future results.\par}
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8f01e3c78f03ffd9}}\cell\row}
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lbrdrl\brdrs\brdrw5\brdrcf5 \clbrdrr\brdrs\brdrw5\brdrcf5 \cellx10700
\pard\intbl\plain \li400 \f3\fs60 Form S-4
\par\pard\intbl\plain \li400 \f3\fs20
\par\pard\intbl\plain \li400 \f3\fs34 ONCOR ELECTRIC DELIVERY CO LLC - N/A
\par\pard\intbl\plain \li400 \f3\fs26 Filed: October 02, 2002 (period: )

\par\pard\intbl\plain \li400 \f3\fs24 Registration of securities issued in busin
ess combination transactions\cell\row}
{\trowd \trbrdrl\brdrs\brdrw5\brdrcf5 \trbrdrr\brdrs\brdrw5\brdrcf5 \trbrdrb\trb
rdrs\trbrdrw5\brdrcf5 \trrh4050 \clbrdrl\brdrs\brdrw5\brdrcf5 \clbrdrr\brdrs\brd
rw5\brdrcf5 \clbrdrb\brdrs\brdrw5\brdrcf5 \cellx10700
\par\pard\plain\fs16\f3\b\i\sl300\slmult1 The information contained herein may n
ot be copied, adapted or distributed and is not warranted to be accurate, comple
te or timely. The user assumes all risks for any damages or losses arising from
any use of this information, except to the extent such damages or losses cannot
be limited or excluded by applicable law. Past financial performance is no guara
ntee of future results.
\par\pard
\page
{\trowd \trbrdrt\brdrs\brdrw5\brdrcf5 \trbrdrl\brdrs\brdrw5\brdrcf5 \trbrdrr\brd
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lbrdrl\brdrs\brdrw5\brdrcf5 \clbrdrr\brdrs\brdrw5\brdrcf5 \clvertalc\clshdng100\
clcfpat10\clcbpat10\cellx10700
\pard\intbl\plain \cf8\f3\fs60\qc Table of Contents\cell\row}
{\trowd \trbrdrl\brdrs\brdrw5\brdrcf5 \trbrdrr\brdrs\brdrw5\brdrcf5 \trbrdrb\brd
rs\brdrw5\brdrcf5 \trrh13200 \clbrdrl\brdrs\brdrw5\brdrcf5 \clbrdrr\brdrs\brdrw5
\brdrcf5 \clbrdrb\brdrs\brdrw5\brdrcf5 \clvertalt\cellx10700
\pard\intbl\plain \cf8\f3\fs14\ql
\par\pard\intbl\plain\f3\fs14\ql
\par\pard\intbl\plain\f3\fs20\ql\ul\li800{\field{\*\fldinst HYPERLINK \\l "doc_1
_1"}{\*\fldrslt S-4 - REGISTRATION STATEMENT}}\par\pard\intbl\plain \f3\fs14\ql
\par\pard\intbl\plain \f3\fs28\ql\ul \li800 {\field{\*\fldinst HYPERLINK \\l "pa
rt_1_2_1"}{\*\fldrslt PART II.}}\par\pard\intbl\plain\brdrb\brdrs\brdrcf5\f3\fs1
0\ql
\par\pard\intbl\plain\f3\fs20\ul\li800{\field{\*\fldinst HYPERLINK \\l "part_1_2
_2"}{\*\fldrslt SIGNATURES}}
\par\pard\intbl\plain\f3\fs20\ul\li800{\field{\*\fldinst HYPERLINK \\l "part_1_2
_3"}{\*\fldrslt INDEX TO EXHIBITS}}
_3"}{\*\fldrslt EX-3 (EX. 3(A) - ARTICLES OF INCORP. - TXU ELECTRIC)}}\par\pard\
intbl\plain\f3\fs14\ql
_4"}{\*\fldrslt EX-3 (EX. 3(B) - ARTICLES OF AMENDMENT - TXU ELECTRIC)}}\par\par
d\intbl\plain\f3\fs14\ql
_5"}{\*\fldrslt EX-3 (EX. 3(C) - ARTICLES OF AMENDMENT - ONCOR ELECTRIC)}}\par\p
ard\intbl\plain\f3\fs14\ql
_6"}{\*\fldrslt EX-3 (EX. 3(D) - AMENDED AND RESTATED BYLAWS OF ONCOR)}}\par\par
_7"}{\*\fldrslt EX-4 (EX. 4(A) - INDENTURE AND DEED OF TRUST)}}\par\pard\intbl\p
lain\f3\fs14\ql
_8"}{\*\fldrslt EX-4 (EX. 4(B) - ONCOR OFFICER'S CERTIFICATE)}}\par\pard\intbl\p
lain\f3\fs14\ql
_9"}{\*\fldrslt EX-4 (EX. 4(C) - FORM OF NEW 2012 NOTE)}}\par\pard\intbl\plain\f
3\fs14\ql

_10"}{\*\fldrslt EX-4 (EX. 4(D) - FORM OF NEW 2032 NOTE)}}\par\pard\intbl\plain\
f3\fs14\ql
_11"}{\*\fldrslt EX-4 (EX. 4(F) - REGISTERED BOND)}}\par\pard\intbl\plain\f3\fs1
4\ql
_12"}{\*\fldrslt EX-4 (EX. 4(G) - REGISTERED BOND)}}\par\pard\intbl\plain\f3\fs1
4\ql
_13"}{\*\fldrslt EX-4 (EX. 4(H) - REGISTRATION RIGHTS AGREEMENT)}}\par\pard\intb
l\plain\f3\fs14\ql
_14"}{\*\fldrslt EX-5 (EX. 5(A) - OPINION OF HUNTON & WILLIAMS)}}\par\pard\intbl
\plain\f3\fs14\ql
_15"}{\*\fldrslt EX-5 (EX. 5(B) - OPINION OF THELEN REID & PRIEST LLP)}}\par\par
_16"}{\*\fldrslt EX-10 (EX. 10(B) - CREDIT AGREEMENT)}}\par\pard\intbl\plain\f3
\fs14\ql
_17"}{\*\fldrslt EX-10 (EX. 10(C) GENERATION INTERCONNECTION AGREEMENT)}}\par\pa
rd\intbl\plain\f3\fs14\ql
_18"}{\*\fldrslt EX-10 (EX. 10(D) - GENERATION INTERCONNECTION AGREEMENT)}}\par\
pard\intbl\plain\f3\fs14\ql
_19"}{\*\fldrslt EX-10 (EX. 10(E) - AMDT 1 TO INTERCONNECTION AGR)}}\par\pard\in
tbl\plain\f3\fs14\ql
_20"}{\*\fldrslt EX-10 (EX. 10(F) - APPENDIX A)}}\par\pard\intbl\plain\f3\fs14\q
l
_21"}{\*\fldrslt EX-12 (EX. 12 - STATEMENT RE: COMPUTATION OF RATIOS)}}\par\pard
\intbl\plain\f3\fs14\ql
_22"}{\*\fldrslt EX-23 (EX. 23(A) - IND. AUD. CONSENT (DELOITTE & TOUCHE))}}\par
\pard\intbl\plain\f3\fs14\ql
_23"}{\*\fldrslt EX-25 (EX. 25 - FORM T-1 - STATEMENT OF ELIGIBILITY)}}\par\pard
\intbl\plain\f3\fs14\ql
_24"}{\*\fldrslt EX-99 (EX. 99(A) - FORM OF LETTER OF TRANSMITTAL)}}\par\pard\in
tbl\plain\f3\fs14\ql
_25"}{\*\fldrslt EX-99 (EX. 99(B) - FORM OF NOTICE OF GUARANTEED DELIVERY)}}\par
\pard\intbl\plain\f3\fs14\ql
_26"}{\*\fldrslt EX-99 (EX. 99(C) - FORM OF EXCHANGE AGENT AGREEMENT)}}\cell\row
}
\page
{\*\bkmkstart filing_1}{\*\bkmkend filing_1}{\*\bkmkstart doc_1_1}{\*\bkmkend do
c_1_1}\par\pard\plain\f0\fs16\par\pard\plain\cf1\f50\fs16\ql As filed with the S
ecurities and Exchange Commission on October 2, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement No. 333-_
_________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================
================================================
\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
ON
---\par\pard\plain\fs16
----\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
cified in Its Charter)
4911
75-2967830
Primary Standard
(I.R.S. Employer
trial Classification
Identification No.)
Code Number)
AS 75201
d Telephone Number, Including Area Code, of
Offices)
PETER B. TINKHAM, ESQ.
Secretary and
Assistant Treasurer
TXU Corp.
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600
ROBERT J. REGER, JR., ESQ.
Thelen Reid & Priest LLP
SECURITIES AND EXCHANGE COMMISSI

WASHINGTON, D.C. 20549
-------------------------------FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-------------------------------ONCOR ELECTRIC DELIVERY COMPANY
(Exact Name of Registrant as Spe
TEXAS
(State or Other
Jurisdiction of
Indus
Incorporation or
Organization)
500 N. AKARD STREET, DALLAS, TEX
(214) 486-2000
(Address, Including Zip Code, an
Registrant's Principal Executive
ERIC H. PETERSON, ESQ
Executive Vice President
and General Counsel
TXU Corp.
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600
ROBERT A. WOOLDRIDGE, ESQ.

Hunton & Williams
1601 Bryan Street
40 West 57th Street

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dallas, Texas 75201
New York, New York 10019
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (214) 979-3000
(212) 603-2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Names, Addresses, Including Zip
Codes, and Telephone Numbers,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Including Area Codes, of Agents
for Service)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It is respectfully requested tha
t the Securities and Exchange Commission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also send copies of all notices,
orders and communications to:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LUCAS F. TORRES, ESQ.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pillsbury Winthrop LLP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql One Battery Park Plaza
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York, New York 10004
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Approximate date of commencement
of proposed sale to the public: AS SOON AS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PRACTICABLE AFTER THIS REGISTRAT
ION STATEMENT BECOMES EFFECTIVE.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the securities being register
ed on this form are being offered in connection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the formation of a holding
company and there is compliance with General
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instruction G, check the followi
ng box. [ ]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If this form is filed to registe
r additional securities for an offering pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Rule 462(b) under the Securit
ies Act, check the following box and list the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act registration stat
ement number of the earlier effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement for the s
ame offering. [ ]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If this form is a post-effective
amendment filed pursuant to Rule 462(d) under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act, check the fo
llowing box and list the Securities Act
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement number of
the earlier effective registration statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the same offering. [ ]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql CALCULATION OF REGISTRATION FEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ----------------------------------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql PROPOSED
PROPOSED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql MAXIMUM
MAXIMUM
AMOUNT OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql TITLE OF EACH CLASS OF
AMOUNT TO BE
OFFERING PRICE
AGGREGATE
REGISTRATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql SECURITIES TO BE REGISTERED
REGISTERED
PER NOTE
OFFERING PRICE
FEE(1)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ----------------------------------------------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 6.375% Exchange Senior
$700,000,000
100%
$700,000,000
$64,400
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Secured Notes due 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ----------------------------------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 7.000% Exchange Senior
$500,000,000
100%
$500,000,000
$46,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Secured Notes due 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ----------------------------------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Total
$1,200
,000,000
-$1,200,000,000
$110,400
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ----------------------------------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql <FN>
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql (1) In accordance with Rule 457(
f)(2) under the Securities Act of 1933, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql registration fee is based on the
book value of the outstanding 6.375% Senior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Secured Notes due 2012 and 7.000
% Senior Secured Notes due 2032 of Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Electric Delivery Company to be
cancelled in the exchange transaction hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql </FN>
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE REGISTRANT HEREBY AMENDS THI
S REGISTRATION STATEMENT ON SUCH DATE OR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DATES AS MAY BE NECESSARY TO DEL
AY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILE A FURTHER AMENDMENT WHICH S
PECIFICALLY STATES THAT THIS REGISTRATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATEMENT SHALL THEREAFTER BECOM
E EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES ACT OF 1933 OR UN
TIL THIS REGISTRATION STATEMENT SHALL BECOME
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EFFECTIVE ON SUCH DATE AS THE SE
CURITIES AND EXCHANGE COMMISSION, ACTING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURSUANT TO SAID SECTION 8(a), M
AY DETERMINE.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBJECT TO COMPLETION, DATED OCT
OBER 2, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROSPECTUS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,200,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ONCOR ELECTRIC DELIVERY COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OFFER TO EXCHANGE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $700,000,000
$500,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.375% EXCHANGE SENIOR SECURED N
OTES
7.000% EXCHANGE SENIOR SECURED NOTES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DUE 2012
DUE 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR ANY AND ALL
FOR ANY AND ALL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.375% SENIOR SECURED NOTES
7.000% SENIOR SECURED NOTES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DUE 2012
DUE 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS EXCHANGE OFFER WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME,
,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, UNLESS EXTENDED.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CERTAIN TERMS OF THE NEW NOTES A
ND THIS EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o
The terms of the $700,000,0
00 6.375% Exchange Senior Secured Notes due 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the New 2012 Notes) are identic
al in all material respects to the terms of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the $700,000,000 6.375% Senior S
ecured Notes due 2012 (the Old 2012 Notes).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The terms of the $500,000,000 7.
000% Exchange Senior Secured Notes due 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the New 2032 Notes) are identic
al in all material respects to the terms of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the $500,000,000 7.000% Senior S
ecured Notes due 2032 (the Old 2032 Notes).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The New 2012 Notes and the New 2
032 Notes are collectively referred to in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this prospectus as the New Notes
. The Old 2012 Notes and the Old 2032 Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are collectively referred to in
this prospectus as the Old Notes. Unlike
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old Notes, however, the New
Notes are registered under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act of 1933, as amended (the Sec
urities Act), and the transfer restrictions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and registration rights and rela
ted additional interest provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable to the Old Notes do n
ot apply to the New Notes.
Like the Old Notes, the New
Notes will initially have the benefit of first
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liens on the tangible transmissi
on and distribution property of Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Delivery Company (Oncor
). The liens securing the New Notes (and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Old Notes not exchanged for
New Notes (the Remaining Old Notes)), may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be released in certain circumsta
nces and subject to certain conditions.
Oncor will accept any and a
ll Old Notes that are properly tendered and not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql validly withdrawn before the exp
iration of this exchange offer.
Tenders of Old Notes may be
validly withdrawn at any time prior to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration of this exchange offe
r.
You will not recognize any
income, gain or loss for United States federal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income tax purposes as a result
of this exchange.
Old Notes of each series ma
y be exchanged for New Notes of the respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series only in minimum denominat
ions of $1,000 and integral multiples of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,000 in excess thereof.
Oncor does not intend to ap
ply for listing of the New Notes on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities exchange or to arrang
e for the New Notes to be quoted on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql automated quotation system.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each broker-dealer that receives
New Notes for its own account pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this exchange offer must acknowl
edge that it will deliver a prospectus in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with any resale of su
ch New Notes. The related letter of transmittal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that is delivered with this pros
pectus (the Letter of Transmittal) states that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by so acknowledging and by deliv
ering a prospectus, a broker-dealer will not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to admit that it is an "u
nderwriter" within the meaning of the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act. This prospectus, as it may
be amended or supplemented from time to time,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be used by a broker-dealer i
n connection with resales of New Notes received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in exchange for Old Notes where
such Old Notes were acquired by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker-dealer as a result of mar
ket-making activities or other trading
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql activities. Oncor has agreed tha
t, for a period of 90 days after the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consummation of this exchange of
fer, Oncor will make this prospectus available
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any broker-dealer for use in
connection with any such resale. See PLAN OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DISTRIBUTION in this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLEASE SEE RISK FACTORS BEGINNIN
G ON PAGE 10 OF THIS PROSPECTUS FOR A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DISCUSSION OF FACTORS YOU SHOULD
CONSIDER IN CONNECTION WITH THIS EXCHANGE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OFFER.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither the Securities and Excha
nge Commission (SEC) nor any state
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities commission has approv
ed or disapproved of these securities or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined if this prospectus is
truthful or complete. Any representation to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contrary is a criminal offense.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The date of this prospectus is
, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RED HERRING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information in this prospect
us is not complete and may be changed. Oncor may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not sell these securities until
the registration statement filed with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and Exchange Commissi
on is effective. This prospectus is not an offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to sell or a solicitation of an
offer to buy these securities in any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction in which an offer,
solicitation or sale is not permitted.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAGE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUMMARY.........................
...............................................3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RISK FACTORS....................
..............................................10
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORWARD-LOOKING INFORMATION.....
..............................................13
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql USE OF PROCEEDS.................
..............................................14
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CAPITALIZATION AND SHORT-TERM DE
BT............................................14
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SELECTED FINANCIAL INFORMATION..
..............................................15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MANAGEMENT'S DISCUSSION AND ANAL
YSIS OF FINANCIAL CONDITION AND

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESULTS OF OPERATION............
..........................................16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BUSINESS........................
..............................................26
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MANAGEMENT OF ONCOR.............
..............................................33
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RELATIONSHIPS AMONG ONCOR AND OT
HER TXU COMPANIES.............................36
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE EXCHANGE OFFER..............
..............................................37
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESCRIPTION OF THE NEW NOTES....
..............................................45
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESCRIPTION OF THE 1983 MORTGAGE
BONDS........................................62
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MATERIAL UNITED STATES FEDERAL I
NCOME TAX CONSIDERATIONS......................65
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLAN OF DISTRIBUTION............
..............................................68
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXPERTS.........................
..............................................69
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VALIDITY OF THE NEW NOTES.......
..............................................69
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL STATEMENTS............
.............................................F-1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YOU SHOULD RELY ONLY ON THE INFO
RMATION CONTAINED IN THIS PROSPECTUS OR TO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHICH ONCOR HAS REFERRED YOU. ON
COR HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH INFORMATION THAT IS DIFFERE
NT. THE INFORMATION IN THIS PROSPECTUS MAY ONLY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BE ACCURATE AS OF THE DATE OF TH
IS PROSPECTUS. THE BUSINESS PROFILE, FINANCIAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITION, RESULTS OF OPERATIONS
AND PROSPECTS OF ONCOR MAY HAVE CHANGED SINCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THAT DATE. THIS PROSPECTUS IS AN
OFFER TO EXCHANGE ONLY THE NOTES OFFERED BY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS PROSPECTUS, BUT ONLY UNDER
CIRCUMSTANCES AND IN JURISDICTIONS WHERE IT IS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LAWFUL TO DO SO.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHERE YOU CAN FIND MORE INFORMAT
ION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In connection with this exchange
offer, Oncor has filed with the SEC a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement under the
Securities Act relating to the New Notes to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued in this exchange offer. A
s permitted by SEC rules, this prospectus omits
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information included in the regi
stration statement. For a more complete
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql understanding of this exchange o
ffer, you should refer to the registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement, including its exhibit
s.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The public may read and copy any
reports or other information that Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql files with the SEC at the SEC's

Public Reference Room, 450 Fifth Street, N.W.,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Washington, D.C. 20549. The publ
ic may obtain information on the operation of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Public Reference Room by cal
ling the SEC at 1-800-SEC-0330. These documents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are also available to the public
at the web site maintained by the SEC at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql http://www.sec.gov. You may also
obtain a copy of the exchange offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement at no cos
t by writing or telephoning Oncor at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following address:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor Electric Delivery Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 500 N. Akard Street
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 214-486-2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN ORDER TO OBTAIN TIMELY DELIVE
RY, YOU MUST REQUEST DOCUMENTS FROM ONCOR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NO LATER THAN ______, 2002 WHICH
IS FIVE DAYS BEFORE THE EXPIRATION DATE (AS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFINED BELOW).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUMMARY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This summary highlights selected
information from this prospectus and does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not contain all the information
that may be important to you. This summary does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not contain all of the informati
on that you should consider before making any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decision concerning this exchang
e offer. For a more complete understanding of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this exchange offer, Oncor encou
rages you to read this entire prospectus and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents to which Oncor refers
you.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISSUANCE OF THE OLD NOTES.......
...... The following notes were issued and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sold on May 6, 2002 by Oncor in
a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction not requiring regist
ration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Securities Act:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o $700,000,000 6.375% Senior Se
cured
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes due 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o $500,000,000 7.000% Senior Se
cured
d Notes
Old
buyers
urities
nt to
ct. All
ed by
ly
.... Oncor is offering to exchange the New
s and
032
ies will
of the
their
hdraw
n Date
benefit
s of
New
nly in
and
excess
w Notes
ion Date
ANGE
Notes due 2032

The initial purchasers of the Ol
sold beneficial interests in the
Notes to qualified institutional
pursuant to Rule 144A of the Sec
Act and to non-US persons pursua
Regulation S of the Securities A
of the Old Notes originally issu
Oncor on May 6, 2002 are current
outstanding.
THE EXCHANGE OFFER; NEW NOTES...
2012 Notes for the Old 2012 Note
the New 2032 Notes for the Old 2
Notes. The New Notes of each ser
have been registered under the
Securities Act and be of a like
principal amount and like tenor
respective series of Old Notes.
Noteholders that properly tender
Old Notes and do not validly wit
such tender before the Expiratio
(as defined below) will have the
of this exchange offer. Old Note
each series may be exchanged for
Notes of the respective series o
minimum denominations of $1,000
integral multiples of $1,000 in
thereof. Oncor will issue the Ne
on or promptly after the Expirat
(as defined below). See THE EXCH
OFFER in this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXPIRATION DATE.................

...... This exchange offer will expire at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5:00 p.m., New York City time, o
n
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql __________, 2002 (the Expiration
Date),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless extended. If extended, th
e term
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date will mean the la
test
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date and time to which this exch
ange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer is extended. Oncor will ac
cept for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange any and all Old Notes w
hich are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properly tendered in this exchan
ge offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and not validly withdrawn before
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5:00 p.m., New York City time, o
n the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESALE OF NEW NOTES.............
...... Based on interpretive letters written by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the staff of the SEC to companie
s other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than Oncor, Oncor believes that,
subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to certain exceptions, the New N
otes may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally be offered for resale,
resold
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and otherwise transferred by you
,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without compliance with the regi
stration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and prospectus delivery provisio
ns of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act, if you:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o acquire the New Notes in the
ordinary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql course of your business;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o do not have an arrangement or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql understanding with any person to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participate in a distribution of
the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o are not an affiliate of Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within the meaning of Rule 405 u
nder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o are not a broker-dealer that
acquired
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old Notes directly from Onco
r.
\page
holders
r
may
Oncor
ders
account
ing
the New
at
w you to
pose for
fer.
R...
Oncor may terminate this exchange offer
roceed
e
ions,
ff of
tute,
If Oncor's belief is inaccurate,

of New Notes who offer, resell o
otherwise transfer New Notes in
violation of the Securities Act
incur liability under that Act.
will not assume or indemnify hol
against any such liability.
If you are a broker-dealer that
purchased Old Notes for your own
as part of market-making or trad
activities, you must deliver a
prospectus when you sell any of
Notes. Oncor has agreed under a
registration rights agreement th
relates to the Old Notes to allo
use this prospectus for this pur
a period of 90 days after the
consummation of this exchange of
CONDITIONS TO THIS EXCHANGE OFFE
before the Expiration Date if it
determines that its ability to p
with this exchange offer could b
materially impaired due to
o any legal or governmental act
o any new law, statute, rule or
regulation, or
o any interpretation by the sta
the SEC of any existing law, sta
rule or regulation.
TENDER PROCEDURES--
..
If you wish to tender Old Notes that are
er,
ompany
tact the
nstruct
on your
YOU
ECEIVED
RESPECT
ACT YOUR
..
If you are a registered holder of Old
this
e, sign
of
eof. If
ository
er, you
the
) a
e to be
of
nt's
),
ticipant
BENEFICIAL OWNER ...............

registered in the name of a brok
dealer, commercial bank, trust c
or other nominee, you should con
registered holder promptly and i
the registered holder to tender
behalf.
IF YOU ARE A BENEFICIAL HOLDER,
SHOULD FOLLOW THE INSTRUCTIONS R
FROM YOUR BROKER OR NOMINEE WITH
TO TENDERING PROCEDURES AND CONT
BROKER OR NOMINEE DIRECTLY.
TENDER PROCEDURES-REGISTERED HOLDERS AND
DTC PARTICIPANTS................
Notes and wish to participate in
exchange offer, you must complet
and date the accompanying Letter
Transmittal, or a facsimile ther
you are a participant in The Dep
Trust Company (DTC), and wish to
participate in this exchange off
must instruct DTC to transmit to
Exchange Agent (as defined below
message indicating that you agre
bound by the terms of the Letter
Transmittal. You should mail or
otherwise transmit the Letter of
Transmittal or facsimile (or age
message (as hereinafter defined)
together with your Old Notes (in
book-entry form if you are a par
in DTC) and any other required
York
....
If you are a holder of Old Notes and
ut such
ailable
otes or
ration
Old
See THE
s.
....
You may validly withdraw tenders of Old
m., New
n Date.
\page
VERY
..
Subject to the satisfaction or waiver of
offer,
ny and
tendered
n the
ill be
iration
..
The exchange of New Notes of each series
series
documentation to The Bank of New

(the Exchange Agent).
GUARANTEED DELIVERY PROCEDURES..
wish to tender such Old Notes, b
Old Notes are not immediately av
or you cannot deliver such Old N
the Letter of Transmittal to the
Exchange Agent prior to the Expi
Date, then you must tender your
Notes according to the special
guaranteed delivery procedures.
EXCHANGE OFFER in this prospectu
WITHDRAWAL RIGHTS...............
Notes at any time before 5:00 p.
York City time, on the Expiratio
ACCEPTANCE OF OLD NOTES AND DELI

OF NEW NOTES....................
the conditions to this exchange
Oncor will accept for exchange a
all Old Notes that are properly
and not validly withdrawn before
5:00 p.m., New York City time, o
Expiration Date. The New Notes w
delivered promptly after the Exp
Date.
CERTAIN MATERIAL UNITED STATES
FEDERAL INCOME TAX
CONSIDERATIONS..................
for Old Notes of the respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not be a taxable event for

United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States federal income tax purpos
es. As a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result, you will not recognize a
ny
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income, gain or loss with respec
t to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such exchange. See MATERIAL UNIT
ED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATES FEDERAL INCOME TAX CONSID
ERATIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EFFECT ON HOLDERS OF THE REMAINI
NG
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OLD NOTES.......................
..
All of the Remaining Old Notes will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue to be subject to restri
ctions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on their transfer in accordance
with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act. After this excha
nge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer, holders of the Remaining
Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes will not (with limited exc
eptions)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have any further registration ri
ghts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including, but not limited to,
the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related additional interest prov
isions)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to such notes. The
value of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Remaining Old Notes could be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adversely affected by the conclu
sion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this exchange offer. There could
be no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market for the Remaining Old Not
es and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thus you may be unable to sell s
uch
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE NEW NOTES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The terms of the New 2012 Notes
will be identical in all material respects
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the terms of the Old 2012 Not
es, and the terms of the New 2032 Notes will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql identical in all material respec
ts to the terms of the Old 2032 Notes. The New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, however, will be register
ed under the Securities Act and will not have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the registration rights (and rel
ated additional interest provisions) or transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restrictions which were applicab
le to the Old Notes. The New Notes of each

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series will evidence the same de
bt as the Old Notes of the respective series.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The New Notes will be governed b
y the same indenture as the Old Notes. For more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information about the New Notes,
see DESCRIPTION OF THE NEW NOTES in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISSUER..........................
....
Oncor Electric Delivery Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE NEW NOTES...................
....
$700,000,000 principal amount of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.375% Exchange Senior Secured N
otes due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2012 and $500,000,000 principal
amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's 7.000% Exchange Senio
r
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Notes due 2032, all of w
hich
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been registered under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RANKING.........................
....
Oncor will issue the New Notes under its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indenture and deed of trust (Ind
enture),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of May 1, 2002, from On
cor to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Bank of New York, as trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Trustee), which is the same ind
enture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under which the Old Notes were i
ssued.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Similar to the Old Notes, the Ne
w Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will initially be secured by (i)
the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien of a matching aggregate pri
ncipal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of Oncor's first mortgage
bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that Oncor issued to the Trustee
for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of the holders of the Ol
d Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (and New Notes exchanged for Old
Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with this exchange
offer)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (ii) a lien on Oncor's tangi
ble
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electric transmission and distri
bution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property. The first mortgage bon
ds were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued under Oncor's Mortgage an
d Deed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Trust, dated as of December 1
, 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1983 Mortgage) from Oncor (whic
h
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql succeeded to and was substituted
for TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Company) to The Bank of
New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York, as trustee (Mortgage Trust
ee).
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The lien of the Indenture and th
e first
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mortgage bonds may be released i
n
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain circumstances and subjec
t to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain conditions. Upon any suc
h
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql release, the New Notes (and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Remaining Old Notes) will cease
to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured obligations of Oncor and
will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become senior unsecured general
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of Oncor pari passu
with all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's other senior unsecure
d
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness. See DESCRIPTION OF
THE NEW
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTES - "Discharge of Lien; Rele
ase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date" in this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MATURITY........................
....
The New 2012 Notes mature on May 1, 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the New 2032 Notes mature on
May 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2032.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTEREST RATE...................
....
The New 2012 Notes will bear interest at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the annual rate of 6.375%. The N
ew 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes will bear interest at the
annual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate of 7.000%. Interest on each
New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note will accrue from the date o
f the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql last interest payment on the Old
Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If no interest has been paid on
the Old
May 6,
Notes
will be
-day
months,
ess than
e actual
ch
....
Oncor will pay interest on each series
n May 1
ember 1,
....
Oncor may at its option redeem all or
otes
at the
on
tus
ES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
ued and
n date.
....
If any New Notes (or any Remaining Old
incur
lien
cept for
unless
Old
lien,
Notes, interest will accrue from

2002, which is the date the Old
were originally issued. Interest
calculated on the basis of a 360
year consisting of twelve 30-day
and with respect to any period l
a full month, on the basis of th
number of days elapsed during su
period.
INTEREST PAYMENT DATES..........
of the New Notes semi-annually o
and November 1, beginning on Nov
2002.
REDEMPTION......................
part of each series of the New N
(and/or the Remaining Old Notes)
respective "make-whole" redempti
prices discussed in this prospec
under DESCRIPTION OF THE NEW NOT
"Optional Redemption," plus accr
unpaid interest to the redemptio
LIMITATION ON SECURED DEBT......
Notes) are outstanding under the
Indenture, Oncor will not issue,
or assume any debt secured by a
upon any of Oncor's property, ex
certain permitted secured debt,
the New Notes (and the Remaining
Notes) are also secured by that
without the consent of the holde
rs of a
rities
uding
Old
EW NOTES
n this
....
The New Notes are expected to be
the Old
tly
rvice,
&
anies,
ch),
tly
of a
hange or
tes. Any
downward
ting
ides
change.
nced
TXU
uding
rom
ew of
sidered
majority of all outstanding secu

issued under the Indenture, incl
the New Notes (and the Remaining
Notes). See DESCRIPTION OF THE N
- "Limitation on Secured Debt" i
prospectus.
RATINGS.........................
assigned ratings consistent with
Notes. The Old Notes are curren
rated A3 by Moody's Investors Se
Inc. (Moody's), BBB+ by Standard
Poor's Ratings Services (S&P), a
division of The McGraw Hill Comp
Inc., and A- by Fitch, Inc. (Fit
the same ratings as those curren
assigned to the Old Notes.
A rating reflects only the view
rating agency, and it is not a
recommendation to buy, sell, exc
hold the Old Notes or the New No
rating can be revised upward or
or withdrawn at any time by a ra
agency if such rating agency dec
that circumstances warrant that
On September 25, 2002, S&P annou
that it affirmed the ratings on
Corp. and its subsidiaries, incl
Oncor, but revised the outlook f
stable to negative. A full revi
such credit ratings is being con
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by S&P and could result in a dow

ngrade
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's credit ratings.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RISK FACTORS ...................
....
You should carefully consider each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the factors described in the sec
tion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this prospectus entitled RISK FA
CTORS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before participating in this exc
hange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM............................
....
The New Notes will be represented by one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or more permanent global notes i
n fully
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered form. Each global not
e will
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deposited with the Trustee as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql custodian for DTC, and registere
d in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name of DTC's nominee, except in
certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited circumstances described
in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus. See DESCRIPTION OF T
HE NEW
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTES -- "Book-Entry" in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRUSTEE AND PAYING AGENT........
....
The Bank of New York
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GOVERNING LAW...................
....
The Indenture is, and the New Notes will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be, governed by the laws of the
State of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BUSINESS
AND AFFILIATES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is a regulated utility eng
aged in the transmission and distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of electricity in the north-cent
ral, eastern and western parts of Texas. Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is an indirect, wholly-owned sub
sidiary of TXU Corp. In this prospectus, "TXU"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refers to TXU Corp. together wit
h its direct and indirect subsidiaries.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU is a global energy services
company that engages in electricity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation, wholesale energy tra
ding and risk management, retail energy sales,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql energy delivery, other energy-re
lated services and, through a joint venture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telecommunications services. TXU
is one of the largest energy services companies
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the world with $41.4 billion
of assets as of June 30, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU's principal operations curre
ntly are conducted through:
TXU US Holdings Company (US
Holdings), formerly TXU Electric Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of which Oncor and TXU Energy Co
mpany LLC (TXU Energy) are direct,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly-owned subsidiaries;
TXU Gas Company (TXU Gas);
TXU Europe Limited; and
TXU Australia Holdings (Par
tnership) Limited Partnership.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Within TXU, Oncor, TXU Gas and t
wo subsidiaries of TXU Gas are managed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collectively as the Oncor group
(Oncor Group) and are reported by TXU Corp. as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its energy delivery segment. TXU
Gas' two subsidiaries managed within the Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group are Oncor Utility Solution
s (Texas) Company and Oncor Utility Solutions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (North America) Company. While t
hese two entities share the Oncor name, they are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not subsidiaries of Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither TXU Corp. nor any of its
other subsidiaries or affiliates,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including members of the Oncor G
roup other than Oncor, will guarantee or provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other credit or funding support
for any of the New Notes or any of the Remaining
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor was formed as part of TXU'
s response to electric industry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restructuring in Texas. Through
December 31, 2001, US Holdings operated as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vertically-integrated electric u
tility subsidiary of TXU Corp., generating,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitting and distributing el
ectricity to customers in its service territory.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On January 1, 2002, with the adv
ent of the deregulation of the generation and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supply markets pursuant to certa
in legislation passed during the 1999 session of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Texas legislature (the 1999
Restructuring Legislation), US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred its:
regulated electric transmis
sion and distribution assets to Oncor;
unregulated electric power
generation assets to various subsidiaries
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of TXU Generation Holdings Compa
ny LLC (TXU Generation), an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unregulated, wholly-owned subsid
iary of TXU Energy; and
retail customers to TXU Ene
rgy Retail Company LP, also an unregulated,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly-owned subsidiary of TXU E
nergy that operates TXU Energy's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retail electric provider (REP) b
usiness.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Also, on January 1, 2002 the reg
ulated electric transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution business of TXU SES
CO Company (TXU SESCO), a subsidiary of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corp., was transferred to Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is managed as a single, in
tegrated electric delivery business;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consequently, there are no separ
ate reportable business segments. Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal operations are:
ELECTRIC TRANSMISSION - Onc
or's electric transmission business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides non-discriminatory whol
esale open access to Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission facilities. Oncor's
transmission facilities transverse
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql almost 200,000 square miles of T
exas and consist of 4,698 circuit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql miles of 345-kilovolt (kV) trans
mission lines, 9,859 circuit miles of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 138-kV and 69-kV transmission li
nes and over 900 substations.
ELECTRIC DISTRIBUTION - Onc
or's electric distribution business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributes electricity for REPs
in its certificated service area.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This service area includes 92 co
unties and 370 incorporated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql municipalities in the north-cent
ral, eastern and western parts of
through Oncor to over 2.7 million
residential customers and 350,000
sses). Oncor's distribution network
head primary conductors, 22,102 miles
light conductors, 11,624 miles of
nd 6,864 miles of underground
ctors. The majority of Oncor's
25-kV and 12.5-kV.
onsist of municipalities, electric
ion companies. Oncor's distribution customers
in Oncor's certificated service area. One of
ergy is by far the largest REP operating in
a. Oncor anticipates that approximately 90% of
e months ended December 31, 2002 will come from
e the production or sale of electricity,
ery of fuel for the production of electricity,
etail electric customers or service as a
distribution lines have been constructed
easements or along public highways and streets
ssion facilities and the distribution network
Oncor on January 1, 2002 are currently subject
. All of the transmission facilities and the
e currently subject to the lien of the
ownership, management and operation of
bution assets. This strategy seeks to
Texas. REPs provide electricity

customers (including 2.4 million
commercial and industrial busine
consists of 54,873 miles of over
of overhead secondary and street
underground primary conductors a
secondary and street light condu
distribution network operates at
Oncor's transmission customers c
cooperatives and other distribut
consist of approximately 35 REPs
these REPs is TXU Energy. TXU En
Oncor's certificated service are
its total revenues for the twelv
TXU Energy.
Oncor's operations do not includ
the procurement, supply or deliv
the solicitation or billing of r
provider of last resort.
Most of Oncor's transmission and
over lands of others pursuant to
as permitted by law. The transmi
transferred from US Holdings to
to the lien of the 1983 Mortgage
distribution network of Oncor ar
Indenture.
ONCOR'S STRATEGY
Oncor's strategy focuses on the
electric transmission and distri
aggressively manage operating co
sts and expenditures through efficiencies and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql best practices while continuing
to build on TXU's tradition of excellent service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and high performance.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGULATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is a rate-regulated electr
ic transmission and distribution utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operating wholly within the Stat
e of Texas and is subject to the jurisdiction of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Public Utility Commission of
Texas (PUCT) and certain municipalities with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to rates and service.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's current rates were estab
lished by an October 3, 2001 final order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued by the PUCT. On December
31, 2001, US Holdings filed a regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement plan (Settlement Plan
) with the PUCT, which was approved by the PUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on June 20, 2002 in Docket No. 2
5230. On August 5, 2002, the PUCT issued a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing order pursuant to the
Settlement Plan, authorizing the issuance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transition (securitization) bond
s of $1.3 billion. The PUCT's order approving
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Settlement Plan and the fina
ncing order were appealed in five separate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dockets in Travis County, Texas
District Court in August 2002. Oncor is unable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to predict when the appeal proce
ss related to the PUCT's approval of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Settlement Plan and the financin
g order will be concluded or the outcome of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appeal process. If the PUCT's ap
proval is upheld, the Settlement Plan resolves
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all major pending issues related
to US Holdings' transition to competition and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will supersede certain ongoing p
roceedings that are related to the 1999
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restructuring Legislation, inclu
ding Oncor's transmission and distribution rates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and regulatory asset securitizat
ion and Oncor's appeal of portions of the PUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order that deal with mitigation
of stranded costs. The Settlement Plan and these
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ongoing proceedings are discusse
d in this prospectus under the heading BUSINESS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - "Oncor's Business - Regulation
and Rates." The Settlement Plan does not remove
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory oversight of Oncor's
business. Oncor does not believe that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outcome of the appeal process wi
ll materially affect Oncor's net financial

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results, as TXU Energy has agree
d, under a master separation agreement executed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in December 2001 (Business Separ
ation Agreement), to hold Oncor harmless from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the results of any disallowance
of power generation-related items, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securitization of regulatory ass
ets, stranded costs and fuel reconciliation. See
HER TXU COMPANIES in this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is also subject to various
federal, state and local regulations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dealing with environmental matte
rs.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is a Texas corporation tha
t was formed in November 2001 and began
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations on January 1, 2002. T
he mailing address of Oncor's principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executive offices is 500 N. Akar
d Street, Dallas, Texas 75201; Oncor's telephone
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number is (214) 486-2000.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUMMARY FINANCIAL DATA
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql You should read the following su
mmary financial data together with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sections of this prospectus enti
tled SELECTED FINANCIAL INFORMATION and
YSIS OF FINANCIAL CONDITION AND RESULTS OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OPERATIONS and the historical fi
nancial statements and the related notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in this prospectus. The
financial information for the transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution operations included
within the combined financial statements for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the years ended December 31, 200
1, 2000 and 1999 and the six months ended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 30, 2001 was derived from t
he separate historical financial statements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql US Holdings and TXU SESCO. Vario
us unbundling and allocation methodologies were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used in combining this informati
on. While Oncor believes that such methodologies
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are reasonable, had Oncor actual
ly existed as a separate entity, its results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and financial positio
n could have differed materially from those
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in these combined finan
cial statements. In addition, the future results
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of operations and financial posi
tion of Oncor could differ materially from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results presented for periods pr
ior to 2002. The condensed consolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial information for the si
x months ended June 30, 2002 represents the

financial position for Oncor and may not be
cial information for the six months ended June
f the seasonal nature of Oncor's business,
s presented may not be indicative of results
re year.
YEAR ENDED DECEMBER 31,
---------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql
2001
2000
1999
IOS AND PERCENTAGES)
................
$
994
$1,005
81
$1,931
................
$
136
$ 64
26
$ 223
es(a) ..........
2.58
1.64
28
2.15
D):
................
$ 8,845
49
net.............
$ 5,940
45
currently:
...........
$ 2,342
...........
$
500(b)
--------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql
........
$ 2,842
.............
$ 2,762
--------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql
......
$ 5,604
$
========
========
actual results of operations and

comparable to the combined finan
30, 2001. In addition, because o
results for the six-month period
that may be expected for an enti
SIX MONTHS ENDED JUNE 30,

------------------------2002
2001
(MILLIONS OF DOLLARS, EXCEPT RAT

INCOME STATEMENT DATA:
Operating revenues..............
$ 2,314
$ 2,0
Net income......................
$
228
$
2
Ratio of earnings to fixed charg
2.24
2.
BALANCE SHEET DATA (END OF PERIO
Total assets....................
$ 8,495
$ 8,1
Property, plant and equipment $ 5,802
$ 5,4
Capitalization:
Long-term debt, less amounts due
Secured debt....................
$ 2,082
$ 2,671
Unsecured debt..................
$ 1,200
$
81
-------Total...........................
$ 3,282
$ 2,752
Shareholder's equity............
$ 2,701
$ 2,532
-------Total...........................
5,983
$ 5,284
========
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Capitalization ratios:

\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Long-term debt, less amounts due
currently:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Secured debt....................
...........
41.8%
34.8%
50.6%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Unsecured debt..................
...........
8.9%(b)
20.1%
1.5%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ---------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total...........................
........
50.7%
54.9%
52.1%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Shareholder's equity............
.............
49.3%
45.1%
47.9%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ---------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total...........................
......
100.0%
100.0%
100.0%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ========
========
========
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -----------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql <FN>
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql (a) Calculated by dividing pret
ax income, excluding extraordinary charges, plus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql fixed charges (interest expense
and estimated interest within rental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql expense) by fixed charges.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql (b) At June 30, 2002, $500 mill
ion of advances from affiliates were classified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql as long-term debt because Oncor
anticipated refinancing these borrowings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql with long-term debt. Oncor comp
leted this refinancing in August 2002.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RISK FACTORS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition to the other informa
tion in this prospectus, you should
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consider the factors described b
elow. The risks and uncertainties described
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below are not the only risks Onc
or may face. Additional risks and uncertainties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not presently known to Oncor or
that Oncor currently deems immaterial may impair
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its business operations. Each of
the risks described below could have a material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adverse effect on Oncor's busine
ss, financial condition or results of operations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and could result in a loss or a
decrease in the value of your New Notes (and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Remaining Old Notes).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RISKS RELATED TO ONCOR'S BUSINES
S -
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ONCOR IS OPERATING IN A NEW MARK
ET ENVIRONMENT IN WHICH ONCOR AND OTHERS HAVE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIMITED OPERATING EXPERIENCE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The competitive electric market
in Texas is new. Oncor, the PUCT, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Reliability Council of
Texas (ERCOT) and other market participants have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only limited operating history u
nder the market framework created by the 1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restructuring Legislation. ERCOT
is the independent system operator that is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsible for maintaining reli
able operations of the bulk electric power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supply system in the ERCOT regio
n. Its responsibilities include ensuring that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information relating to a custom
er's choice of REP is conveyed in a timely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner to anyone needing the inf
ormation. Some operational difficulties were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encountered in the pilot program
conducted last year and are currently being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql experienced. Problems in the flo
w of information between ERCOT, the transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and distribution utilities and t
he REPs have resulted in delays in switching
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers from one REP to anothe
r and have created uncertainty as to the amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of transmission and distribution
charges owed by each REP, which has resulted in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delays in billing and payment of
such amounts. While the flow of information is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improving, operational problems
in the new system and processes are still being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql worked out. These operating diff
iculties or structural changes adopted to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql address these difficulties could
materially adversely affect Oncor's results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and financial conditi
on.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Given the newness of the competi
tive market in Texas, existing laws and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations governing the market
structure could be reconsidered, revised or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reinterpreted or new laws or reg
ulations could be adopted. Any changes to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws or regulations could have a
detrimental effect on Oncor's business.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ONCOR'S REVENUES AND RESULTS OF
OPERATIONS ARE SEASONAL AND ARE SUBJECT TO RISKS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THAT ARE BEYOND ONCOR'S CONTROL.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A portion of Oncor's revenues is
derived from rates that Oncor collects
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from each REP based on the amoun
t of electricity Oncor distributes on behalf of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each such REP. Thus, Oncor's rev
enues and results of operations are subject to

and other changes in electricity usage. Also,
Oncor's facilities due to storms, natural
and other catastrophic events, in excess of
pairs, will adversely impact Oncor's revenues,
nd results of operations.
ESS MAY DELAY OR DENY ONCOR FULL RECOVERY OF
he PUCT based on an analysis of Oncor's
. As part of the Settlement Plan, which is
er the heading BUSINESS - "Oncor's Business \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
agreed not to seek to increase its distribution
ates Oncor is allowed to charge may or may not
ven time. While rate regulation in Texas is
prudently incurred costs and a reasonable rate
e no assurance that the PUCT will judge all of
ntly incurred or that the regulatory process in
always result in rates that will produce full
ON REVENUES IS CONCENTRATED IN A SMALL NUMBER
bution of electricity are collected from
Oncor distributes to such REPs' customers.
ith approximately 35 REPs. Oncor depends on
\page
revenues to Oncor. Oncor could experience
om these REPs, adversely affecting Oncor's cash
proximately 90% of its total revenues for the
seasonality, weather conditions

the cost of repairing damage to
disasters, wars, terrorist acts
reserves established for such re
operating and capital expenses a
RATE REGULATION OF ONCOR'S BUSIN
ONCOR'S COSTS.
Oncor's rates are regulated by t
expenses incurred in a test year
discussed in this prospectus und
Regulation and Rates" Oncor has
rates prior to 2004. Thus, the r
match Oncor's expenses at any gi
premised on the full recovery of
of return on equity, there can b
Oncor's costs to have been prude
which rates are determined will
recovery of Oncor's cost.
COLLECTION OF ONCOR'S DISTRIBUTI
OF REPS.
Oncor's revenues from the distri
REPs that supply the electricity
Currently, Oncor does business w
10
these REPs to timely remit these

delays or defaults in payment fr
flows. Oncor anticipates that ap
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql twelve months ended December 31,

2002 will come from TXU Energy.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TECHNOLOGICAL CHANGE MAY MAKE AL
TERNATIVE ENERGY SOURCES MORE ATTRACTIVE AND MAY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVERSELY AFFECT ONCOR'S REVENUE
S AND RESULTS OF OPERATIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The continuous process of techno
logical development may result in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql introduction to retail customers
of economically attractive alternatives to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasing electricity through O
ncor's distribution facilities. Manufacturers of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql self-generation facilities conti
nue to develop smaller-scale, more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fuel-efficient generating units
that can be cost- effective options for retail
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers with smaller electric
energy requirements. Any reduction in the amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of electric energy distributed b
y Oncor as a result of these technologies may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have an adverse impact on Oncor'
s revenues and results of operations in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql future.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROBLEMS WITH METERING THE ELECT
RICITY DISTRIBUTED BY ONCOR MAY MATERIALLY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AFFECT ONCOR'S REVENUES AND RESU
LTS OF OPERATIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Currently, and until January 200
4, Oncor provides all metering services to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPs for customers in its servic
e territory. Metering services will be provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on a competitive basis beginning
in January 2004 for commercial and industrial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers and by at least Septem
ber 2005 for residential customers. Third
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties will be permitted to per
form metering services and provide metering data
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Oncor. The PUCT has not yet e
stablished certification or performance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standards for third party meteri
ng entities. Since third parties will not have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously performed metering se
rvices in Oncor's service territory, there may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be unforeseen problems in conver
ting to the third party's metering system, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taking accurate meter readings a
nd in collecting and processing accurate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metering data following the conv
ersion to competitive metering. Failure by Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or these third parties to accura
tely meter the electricity sold by the REPs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could adversely impact the reven
ues received by Oncor from REPs.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RISKS RELATED TO THIS EXCHANGE O
FFER -
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IF YOU FAIL TO EXCHANGE OLD NOTE
S, THEY WILL REMAIN SUBJECT TO TRANSFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESTRICTIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any Old Notes that remain outsta
nding after the expiration of this exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer will continue to be subjec
t to restrictions on their transfer in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the Securities A
ct. After the expiration of this exchange offer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of Old Notes will not (w
ith limited exceptions) have any further rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to have their Old Notes register
ed under the Securities Act. The value of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Remaining Old Notes could be adv
ersely affected by the conclusion of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer. There may be no
market for the Remaining Old Notes and thus you
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be unable to sell such notes
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LATE DELIVERIES OF OLD NOTES AND
OTHER REQUIRED DOCUMENTS COULD PREVENT YOU FROM
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGING YOUR OLD NOTES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Noteholders are responsible for
complying with all exchange offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures. The issuance of New
Notes in exchange for Old Notes will only occur
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the proper and timely compl
etion by holders of Old Notes of the procedures
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in this prospectus und
er the heading THE EXCHANGE OFFER. Therefore,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of Old Notes that wish t
o exchange such Old Notes for New Notes should
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allow sufficient time for the ti
mely completion of the exchange procedure.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither Oncor nor the Exchange A
gent is obligated to notify you of any failure
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to follow the proper exchange pr
ocedure.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IF YOU ARE A BROKER-DEALER, YOUR
ABILITY TO TRANSFER THE NEW NOTES MAY BE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESTRICTED.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A broker-dealer that purchased O
ld Notes for its own account as part of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market-making or trading activit
ies must deliver a prospectus when it sells the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes. Oncor's obligation to
make this prospectus available to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker-dealers is limited. Conse
quently, Oncor cannot guarantee that a proper
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus will be available to
broker-dealers wishing to resell their New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RISKS RELATED TO THE NEW NOTES (
AND THE REMAINING OLD NOTES) \par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THERE IS NO EXISTING MARKET FOR
THE NEW NOTES (OR OLD NOTES) AND ONCOR CANNOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ASSURE YOU THAT AN ACTIVE TRADIN
G MARKET WILL DEVELOP.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There is no existing market for
the New Notes (or Old Notes) and Oncor does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not intend to apply for listing
of the New Notes (or Old Notes) on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities exchange. There can b
e no assurance as to the liquidity of any market
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that may develop for the New Not
es (or Old Notes), the ability of noteholders to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sell their New Notes (or Old Not
es) or the price at which the noteholders will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be able to sell their New Notes
(or Old Notes). Future trading prices of the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes (or Old Notes) will depend
on many factors including, among other things,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prevailing interest rates, Oncor
's operating results and the market for similar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities. If a market for the
New Notes (or Old Notes) does not develop,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasers may be unable to rese
ll the New Notes (or Old Notes) for an extended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of time. Consequently, a
noteholder may not be able to liquidate its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment readily.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE MARKET PRICE OF THE NEW NOTE
S (AND THE REMAINING OLD NOTES) MAY FLUCTUATE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's actual operating history
began January 1, 2002. The financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements of Oncor prior to Jan
uary 1, 2002 present the historical combined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial position, results of o
perations and cash flows of the unbundled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission and distribution op
erations of US Holdings and TXU SESCO. Thus, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material differences between Onc
or's actual results and the historical combined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results contained in this prospe
ctus could have a significant impact on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market price of the New Notes (a
nd the Remaining Old Notes), assuming any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market develops. Likewise, any d
owngrade of Oncor's credit ratings by Moody's,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql S&P or Fitch could have a signif
icant impact on the market price of the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes (and the Remaining Old Not
es), assuming any such market develops. On
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 25, 2002, S&P announce
d that it affirmed the ratings on TXU Corp. and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its subsidiaries, including Onco
r, but revised the outlook from stable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negative. A full review of such
credit ratings is being considered by S&P and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could result in a downgrade of O
ncor's credit ratings.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition, the fact that some
other participants in the energy industry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have engaged in questionable acc
ounting and business practices has adversely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impacted the market for securiti
es issued by those participants as well as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql others in the energy industry. W
hile neither Oncor nor any of its affiliates has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql engaged in such practices, the m
arket price of Oncor securities, including the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes (and the Remaining Old
Notes) (assuming such a market develops), may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also be adversely impacted by co
ntinuing developments and disclosures,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning other industry partic
ipants, over which Oncor has no control.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE NEW NOTES (AND THE REMAINING
OLD NOTES) ARE EXPECTED TO BECOME UNSECURED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OBLIGATIONS OF ONCOR IN THE FUTU
RE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Indenture provides that the
lien securing the New Notes (and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Remaining Old Notes) may be disc
harged and the first mortgage bonds and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Class A Bonds held by the
Trustee may be deemed satisfied and discharged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when all Class A Bonds, other th
an the Class A Bonds held by the Trustee, do not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceed the greater of 5% of the
net book value of Oncor's Electric Utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property or 5% of Oncor's Capita
lization. The retirement of Oncor's first
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mortgage bonds could be accompli
shed through the redemption, purchase or payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at maturity of first mortgage bo
nds. At the time of the discharge, there will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no collateral for the New Notes
(and the Remaining Old Notes) and the New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (and the Remaining Old Notes) wi
ll become senior unsecured general obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor pari passu with all oth
er senior unsecured indebtedness of Oncor. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql absence of collateral could mate
rially adversely affect the ability of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of the New Notes (and th
e Remaining Old Notes) to collect payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor in the event of the ban
kruptcy or liquidation of Oncor. After the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes (and the Remaining Old Not
es) become unsecured, Oncor may incur secured

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql debt without securing the New No
tes (and the Remaining Old Notes) to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted by the limitation on s
ecured debt in the Indenture. For a more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql detailed discussion and for cert
ain definitions used in this risk factor, see
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESCRIPTION OF THE NEW NOTES in
this prospectus.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORWARD-LOOKING INFORMATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This prospectus contains stateme
nts that are not historical fact and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute "forward-looking stat
ements". All statements, other than statements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of historical fact, that are inc
luded in this prospectus that address activity,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql events or developments that Onco
r expects or anticipates to occur in the future,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including such matters as projec
tions, future capital expenditures, business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql strategy, competitive strengths,
goals, future acquisitions, market and industry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql developments and the growth of O
ncor's businesses and operations, are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forward-looking statements. Alth
ough Oncor believes that in making any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forward-looking statement its ex
pectations are based on reasonable assumptions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such forward-looking stateme
nt involves uncertainties and is qualified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its entirety by reference to the
following important factors, among others, that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could cause Oncor's actual resul
ts to differ materially from those projected in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such forward-looking stateme
nt:
prevailing governmental pol
icies and regulatory actions, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those of the Federal Energy Regu
latory Commission (FERC) and the PUCT,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to:
allowed rates of return;
industry and rate structure
;
recovery of investments;
acquisitions and disposal o
f assets and facilities;
of facilities;
icies; and
ith environmental and safety laws and
Restructuring Legislation;
oceedings and settlements, including the
proval of the Settlement Plan
atural phenomena and acts of sabotage, wars
owth or decline, and changes in market
y, development plans or vendor
terest rates or rates of inflation;
erating expenses and capital expenditures;
capital market conditions;
s opportunities;
rparties to meet their obligations with
truments;
and services offered by Oncor;
r's relationship with its employees,
alified personnel, and the potential
s or grievances were to occur;
ical accounting policies material to Oncor;
operation and construction
changes in tax laws and pol
changes in and compliance w
policies;
o
implementation of the 1999
legal and administrative pr
pending appeals of the PUCT's ap

discussed herein;
o
weather conditions, other n
or other terrorist activities;

o
unanticipated population gr
demand and demographic patterns;

o
changes in business strateg
relationships;
o
unanticipated changes in in
unanticipated changes in op
commercial bank market and
competition for new busines
inability of various counte
respect to Oncor's financial ins

o
changes in technology used
significant changes in Onco
including the availability of qu

adverse effects if labor dispute
o
significant changes in crit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and
actions of rating agencies.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any forward-looking statement sp
eaks only as of the date on which it is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made, and Oncor undertakes no ob
ligation to update any forward-looking statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to reflect events or circumstanc
es after the date on which it is made or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflect the occurrence of unanti
cipated events. New factors emerge from time to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, and it is not possible for
Oncor to predict all of such factors. Also,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor can not assess the impact
of each such factor or the extent to which any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql factor, or combination of factor
s, may cause results to differ materially from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those contained in any forward-l
ooking statement.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql USE OF PROCEEDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The exchange offer contemplated
hereby is intended to satisfy some of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's obligations under the re
lated registration rights agreement. Oncor will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not receive any cash proceeds fr
om the issuance of the New Notes in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer. In exchange for
issuing the New Notes as described in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus, Oncor will receive a
n equal aggregate principal amount of Old Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which will be cancelled.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CAPITALIZATION AND SHORT-TERM DE
BT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following table shows Oncor'
s capitalization and short-term debt as of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 30, 2002, and as adjusted.
You should read the information in this table
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together with the sections of th
is offering memorandum entitled SELECTED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL INFORMATION and MANAGE
MENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITION AND RESULTS OF OPERATI
ONS and the financial statements and the related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notes included elsewhere in this
prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OUTSTANDING AT
ADJUST
ED(a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JUNE 30, 2002
--------------
---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------AMOUNT
PERCENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (IN MILLIONS)
(IN MILLIONS)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capitalization:
currently:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql First Mortgage Bonds ...........
.........
$1,142
$1,142
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Long-term advances from affiliat
es ......
500
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Secured Notes:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes ......................
.....
1,200
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes ......................
.....
-1,200
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debentures .....................
.........
-1,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total long-term debt ...........
......
2,842
3,342
54.8%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shareholder's equity ...........
...........
2,762
2,762
45.2%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total Capitalization ...........
.
$5,604
$6,104
100.0%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ======
======
=====
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Short-term Debt:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Short-term advances from affilia
tes .....
$ 128
$ 50
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes payable - commercial paper
........
$ 295
$ 294
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Long-term debt due currently(b)
.........
$ 950
$ 722
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql <FN>
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) To give effect to (i) the i
ssuance by Oncor of $1,000,000,000 of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debentures on August 30, 2002, a
nd the application of the net proceeds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof to fund the repayment of
$500 million of long-term advances from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliates and an aggregate of $
487 million of short-term advances from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliates and outstanding comme
rcial paper, (ii) net issuances of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial paper from June 30, 2
002 to August 30, 2002 of $408 million,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the redemption of Oncor's
first mortgage bonds (see footnote (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below) and (iv) the issuance of
the New Notes in exchange for the Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (assuming that all Old Notes are
exchanged for New Notes).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) On August 8, 2002, Oncor re
deemed all of its 8.5% First Mortgage Bonds due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 1, 2024 and all of its 8.

875% First Mortgage Bonds due February 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2022, in aggregate principal amo
unts of $115.4 million and $112.2 million,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively. Oncor funded the r
edemptions through the issuance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial paper, advances from
affiliates and cash from operations. These
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts were classified as longterm debt due currently at June 30, 2002.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SELECTED FINANCIAL INFORMATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following tables present Onc
or's selected financial information.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Although Oncor began operations
on January 1, 2002 (and is not a successor to US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings or TXU SESCO), it is vo
luntarily providing selected financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information for the years ended
2001, 2000 and 1999 based on the combined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql historical financial data for th
e transmission and distribution operations of US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings and TXU SESCO. Similar
selected financial data for years prior to 1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is not available without unreaso
nable or undue effort, expense or burden. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information set forth below shou
ld be read together with the section of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus titled MANAGEMENT'S D
ISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND RESULTS OF OPERATIONS and th
e historical financial statements and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related notes included in this p
rospectus. The financial information for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission and distribution op
erations included within the combined financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements for the years ended D
ecember 31, 2001, 2000 and 1999 and the six
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months ended June 30, 2001 was d
erived from the separate historical financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements of US Holdings and TX
U SESCO. Various unbundling and allocation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql methodologies were used in combi
ning this information. While Oncor believes that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such methodologies are reasonabl
e, had Oncor actually existed as a separate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entity, its results of operation
s and financial position could have differed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially from those included i
n these combined financial statements. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, the future results of
operations and financial position of Oncor could
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql differ materially from the resul
ts presented for periods prior to 2002. The

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condensed consolidated financial
information for the six months ended June 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002 represents the actual resul
ts of operations and financial position for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor and may not be comparable
to the combined financial information for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six months ended June 30, 2001.
In addition, because of the seasonal nature of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's business, results for th
e six-month periods presented may not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicative of results that may b
e expected for an entire year.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql SIX MONTHS ENDED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql JUNE 30,
YEAR ENDED DECEMBER 31,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -----------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql 2002
2001
2001
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql (MILLIONS OF DOLLARS EXCEPT RATI
OS AND PERCENTAGES)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql INCOME STATEMENT DATA:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Operating revenues .............
...........
$
994
$ 1,005
$ 2,314
$ 2,081
$ 1,931
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Operating expenses .............
...........
$
747
$
798
$ 1,820
$ 1,597
$ 1,444
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Operating income ...............
...........
$
247
$
207
$
494
$
484
$
487
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Net income .....................
...........
$
136
$
64
$
228
$
226
$
223
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Ratio of earnings to fixed charg
es(a)......
2.58
1.64
2.24
2.28
2.15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql BALANCE SHEET DATA (END OF PERIO
D):
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total assets ...................
...........
$ 8,845
$ 8,495
$ 8,149
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Property, plant and equipment-net .......
$ 5,940
$ 5,802
$ 5,445
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Capitalization:
currently:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Secured debt ...................
.......
$ 2,342
$ 2,082
$ 2,671
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Unsecured debt..................
.......
$
500(b)
$ 1,200
$
81
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total ..........................
......
$ 2,842
$ 3,282
$ 2,752
..........
2,762
2,701
2,532
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total Capitalization ...........
.....
$ 5,604
$ 5,983
$ 5,284
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql =========
=========
=========
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Capitalization ratios:
currently:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Secured debt ...................
.......
41.8%
34.8%
50.6%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Unsecured debt .................
.......
8.9%(b)
20.1%
1.5%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total ..........................
......
50.7%
54.9%
52.1%
..........
49.3%
45.1%
47.9%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total Capitalization ...........
.....
100.0%
100.0%
100.0%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql =========
=========
=========
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql OTHER FINANCIAL DATA:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Cash provided by (used in) opera
ting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql activities .....................
..........
$ (69)
$
199
$
675
$
441
$
623
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Capital expenditures ...........
...........
$ 265
$
356
$
635
$
517
$
489
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql (a) Calculated by dividing pret
ax income, excluding extraordinary charges, plus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql fixed charges (interest expense
and estimated interest within rental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql expense) by fixed charges.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql (b) At June 30, 2002, $500 mill
ion of advances from affiliates were classified
anticipated refinancing these borrowings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql with long-term debt. Oncor comp
leted this refinancing in August 2002.
\page

YSIS OF FINANCIAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITION AND RESULTS OF OPERATI
ON
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following discussion should
be read in conjunction with the sections of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this prospectus entitled RISK FA
CTORS and SELECTED FINANCIAL INFORMATION and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's historical financial sta
tements and related notes included in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus. For a discussion of
the entities that comprise Oncor and the use of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql historical data to prepare Oncor
's financial statements, see Notes 1 and 2 to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's combined financial state
ments for the years ended December 31, 2001,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2000 and 1999 and Note 1 to Onco
r's condensed consolidated financial statements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the six months ended June 30
, 2002 and 2001 in this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OVERVIEW
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor was formed as a Texas corp
oration in the fourth quarter of 2001,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originally as TXU Electric Deliv
ery Company, and was renamed effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 17, 2002. Oncor was crea
ted as a result of the restructuring of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electric utility industry in Tex
as, which became effective January 1, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor consists of the regulated
electric transmission and distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql businesses transferred from US H
oldings and TXU SESCO effective on January 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002. Oncor is a wholly-owned su
bsidiary of US Holdings, which is a wholly-owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary of TXU Corp.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of electric energy in the northcentral, eastern and western parts of Texas.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's transmission customers c
onsist of municipalities, electric cooperatives
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other distribution companies
. Oncor's distribution customers consist of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 35 REPs in Oncor's
certificated service area. Oncor's largest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution customer is TXU Ene
rgy, which is another wholly-owned subsidiary of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql US Holdings and which represents
the substantial majority of Oncor's revenues at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this time. Oncor is managed as a
single, integrated electric energy delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business; consequently, there ar
e no separate reportable business segments.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial statements of Onco
r prior to January 1, 2002 present the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql historical combined financial po
sition, results of operations and cash flows of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the unbundled transmission and d
istribution operations of US Holdings and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SESCO. These businesses were ope
rated by subsidiaries of TXU Corp. under common
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ownership and control for the pe
riods prior to January 1, 2002. The financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information of US Holdings' tran
smission and distribution business included in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the combined financial statement
s was derived from the historical financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements of US Holdings. US Ho
ldings maintained expense accounts for each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its component operations. Howeve
r, revenues of US Holdings consisted of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bundled rate for all operations
combined. Historical Oncor revenues were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by unbundling the tra
nsmission and distribution component of revenues
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from US Holdings' bundled rate c
harged to customers. Allocation of revenues
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between TXU Energy and Oncor als
o reflected consideration of return on invested
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital, which is regulated for
Oncor. Expenses related to operation and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintenance and depreciation and
amortization, as well as assets, such as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property, plant and equipment, m
aterials and supplies and fuel, were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically identified by compo
nent operation and disaggregated. Various
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocation methodologies were us
ed to disaggregate common expenses, assets and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities between US Holdings'
generation and transmission and distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations. Interest and other f
inancing costs were determined based upon debt
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql See Notes 1 and 2 to Oncor's com
bined financial statements for the years
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 31, 2001, 2000 an
d 1999 and Notes 1 and 2 to Oncor's condensed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated financial statement
s for the six months ended June 30, 2002 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001 in this prospectus for more
information regarding the business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restructuring and the basis of p
resentation for the financial information
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in this section of this
prospectus, which reflects certain assumptions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and estimates used in unbundling
US Holdings' historical financial information.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor believes that the allocati
on methodologies used are reasonable. Had Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actually existed as a separate e
ntity prior to January 1, 2002, its results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and financial positio
n could have differed materially from those

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in the combined financi
al statements included herein. In addition,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql future results of Oncor's operat
ions and financial position could differ
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially from the historical r
esults presented herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial information for th
e three and six months ended June 30, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represents the actual results of
operations and financial position of Oncor and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may not be comparable to the com
bined financial information for the three and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six months ended June 30, 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CRITICAL ACCOUNTING POLICIES
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's significant accounting p
olicies are detailed in Note 2 to Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined financial statements fo
r the years ended December 31, 2001, 2000 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1999 and Note 2 to Oncor's conde
nsed consolidated financial statements for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six months ended June 30, 2002 a
nd 2001 in this prospectus. Oncor follows
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting principles generally
accepted in the United States of America. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applying these accounting polici
es in the preparation of its financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements, Oncor is required to
make estimates and assumptions about future
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql events that affect the reporting
and disclosure of assets and liabilities at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balance sheet dates and revenues
and expenses during the periods covered. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following is a summary of certai
n critical accounting policies of Oncor that are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected by judgments and uncert
ainties and for which different amounts might be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reported under a different set o
f conditions or using different assumptions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulatory Assets and Liabilitie
s -- The combined financial statements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor reflect regulatory assets
and liabilities under cost-based rate regulation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with Statement of
Financial Accounting Standards (SFAS) No. 71,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Accounting for the Effects of C
ertain Types of Regulation." The regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets and liabilities include t
hose that arose from Oncor's transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution operations and thos
e assigned from US Holdings that arose from US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings' generation operations.

For more information, see Note 3 to Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined financial statements fo
r the years ended December 31, 2001, 2000 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1999 and Note 3 to Oncor's conde
nsed consolidated financial statements for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six months ended June 30, 2002 a
nd 2001 in this prospectus. TXU Energy has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed under the Business Separa
tion Agreement to hold Oncor harmless from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results of any disallowance of g
eneration-related items, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securitization of regulatory ass
ets, stranded costs and fuel reconciliation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Revenue Recognition -- Electric
transmission and distribution revenues are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recognized when services are pro
vided to customers on the basis of periodic
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cycle meter readings and include
an estimated accrual for the value of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electricity delivery fees from t
he meter reading date to the end of the period.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESULTS OF OPERATIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THREE MONTHS ENDED JUNE 30, 2002
VERSUS THREE MONTHS ENDED JUNE 30, 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's operating revenues decre
ased $29 million, or 5%, to $500 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the second quarter of 2002,
due primarily to lower transmission revenues and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the absence of off system sales
and other revenues that are earned by the REPs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning in 2002 and therefore
reported by TXU Energy in 2002. The decline in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission revenues was due pr
imarily to lower regulatory rates.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operation and maintenance expens
e decreased $28 million, or 13%, to $189
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million for the second quarter o
f 2002. Lower expense in 2002 primarily
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflected decreases in customer
support expenses and lower bad debt expense,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulting from the changed chara
cter of Oncor's customers. Since January 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, most of the 2.7 million el
ectricity consumers of US Holdings whose service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was formerly regulated have been
free to choose from REPs who compete for their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business. These competing REPs,
including TXU Energy, are now Oncor's primary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers. Accordingly, the tran
sfer of certain customer-related functions from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor to TXU Energy resulted in
decreased operation and maintenance expense for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor. Total net pension and pos
tretirement benefit expense increased $5 million
iation and amortization and taxes other
on, or 13%, to $159 million for the second
n income taxes accounted for $33 million of the
ily attributable to state gross receipts taxes
are now incurred by REPs rather than by Oncor.
nue to be reported in Oncor's results. This
the $9 million increase in depreciation and
rom property, plant and equipment additions,
ments and improvements to prepare for the
ricity markets and other capital projects to
liability.
or the second quarter of 2002 represents
ergy on regulatory-related receivables and
siness Separation Agreement. For more
r's combined financial statements for the years
d 1999.
\page
es decreased $5 million, or 7%, to $65
f 2002. This decrease was due to the retirement
ighted average interest rates than new debt
ed $14 million, or 74%, to $33 million for
mainly to higher pretax earnings. Income tax
rating income, after interest expense and other
items in order to present the operating results
ective tax rate on regulated activities
in 2002.
Other operating expenses (deprec
than income) decreased $24 milli
quarter of 2002. Taxes other tha
total decrease, which was primar
and regulatory assessments that
Local gross receipts taxes conti
decrease was partially offset by
amortization expense resulting f
including infrastructure develop
restructuring of the Texas elect
upgrade system capability and re
Interest income of $11 million f
carrying charges due from TXU En
assets in accordance with the Bu
information, see Note 11 to Onco
ended December 31, 2001, 2000 an
17
Interest expense and other charg

million for the second quarter o
of long-term debt with higher we
issued.
Total income tax expense increas
the second quarter of 2002, due
expense is allocated between ope
charges, and other nonoperating
of regulated activities. The eff
increased from 32.2% in 2001 to
33.3% in 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net income increased $25 million
, or 63%, to $65 million for the second
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarter of 2002. The improvement
was driven by lower taxes other than income,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql higher interest income and reduc
ed interest expense. Net pension and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql postretirement benefit expense r
educed net income by $5 million in 2002 and $2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million in 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIX MONTHS ENDED JUNE 30, 2002 V
ERSUS SIX MONTHS ENDED JUNE 30, 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's operating revenues decre
ased $11 million, or 1%, to $994 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the first six months of 2002
. Excluding the impact of lower transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revenues, as well as the absence
of off system sales and other revenues that are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earned by the REPs beginning in
2002, electric distribution revenues rose 4%, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql line with a 3% increase in elect
ric volumes delivered in the distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations. The decline in trans
mission revenues was due primarily to lower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory rates.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operation and maintenance expens
e decreased $35 million, or 9%, to $367
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million for the first six months
of 2002. Lower expense in 2002 primarily
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflected decreases in customer
support expenses and lower bad debt expense,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulting from the changed chara
cter of Oncor's customers as discussed above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total net pension and postretire
ment benefit expense increased $7 million in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other operating expenses decreas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first six months of 2002. Ta
xes other than income taxes accounted for $62
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million of the total decrease, w
hich was primarily attributable to reduced
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses for state gross receipt
s taxes and regulatory assessments that are now
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurred by REPs rather than by
Oncor. This decrease was partially offset by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $13 million increase in deprecia
tion and amortization expense resulting from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property, plant and equipment ad
ditions, including infrastructure developments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and improvements to prepare for
the restructuring of the Texas electricity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql markets and other capital projec
ts to upgrade system capability and reliability.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest income of $23 million f

or the first six months of 2002 represents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql carrying charges due from TXU En
ergy on regulatory-related receivables and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets in accordance with the Bu
siness Separation Agreement. For more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information, see Note 11 to Onco
r's combined financial statements for the years
d 1999 in this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest expense and other charg
es decreased $16 million, or 11%, to $127
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million for the first six months
of 2002. This decrease was due primarily to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retirement of long-term debt wit
h higher weighted average interest rates than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql new debt issued.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total income tax expense increas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first six months of 2002, du
e mainly to higher pretax earnings. Income tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense is allocated between ope
rating income, after interest and other charges,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other nonoperating items in
order to present the operating results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulated activities. The effect
ive tax rate on regulated activities increased
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from 31.2% in 2001 to 34.1% in 2
002 due primarily to nonrecurring adjustments to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deferred tax balances recorded i
n 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net income increased by $72 mill
ion, or 113%, to $136 million for the first
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six months of 2002. The improvem
ent was driven by lower taxes other than income,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql higher interest income and reduc
ed interest expense. Net pension and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql postretirement benefit expense r
educed net income by $9 million in 2002 and $4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million in 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 31, 2001 VER
SUS 2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's historical revenues allo
cated from US Holdings were determined by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unbundling the transmission and
distribution component of revenues from US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings' bundled rate charged t
o customers for all operations combined. The
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql historical revenues of TXU SESCO
's transmission and distribution business

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in Oncor's historical c
ombined financial statements were derived from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the separate historical financia
l statements of TXU SESCO. Allocation of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revenues between TXU Energy and
Oncor also reflected consideration of return on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invested capital, which is regul
ated for Oncor. Under continuing regulation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will have the opportunity
to recover increases in operating costs and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other expenses through adjustmen
ts to its regulated transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution rates.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's operating revenues incre
ased by $233 million, or 11%, to $2.3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion in 2001, primarily as a
result of higher recoverable costs in 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric energy deliveries in gi
gawatt-hours declined 1% in 2001 due to milder,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more normal weather and a slowin
g economy, partially offset by the effect of 2%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql growth in the number of end-use
consumers within Oncor's service territory.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total operating expenses increas
ed $223 million, or 14%, to $1.8 billion in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001. Operation and maintenance
expense increased $109 million, or 13%, to $920
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million. Higher operation and ma
intenance expense in 2001 reflected several
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql factors, including: increased ba
d debt expense, which was driven by the rise in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fuel-related charges; increases
in transmission costs; and systems-related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses incurred in preparing f
or the restructuring of the Texas electricity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql markets. Operation and maintenan
ce expense in both years included certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recoverable charges (accelerated
recovery of regulatory assets of $73 million in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001 and $52 million in 2000). P
roperty, plant and equipment additions in 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 2000 to upgrade system capab
ility and reliability resulted in the $7 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increase in depreciation and amo
rtization expense in 2001. Taxes other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income taxes increased $107 mill
ion in 2001, primarily due to higher state and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql local gross receipts taxes and h
igher regulatory assessments as a result of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rise in revenues upon which such
taxes are based in late 2000 and early 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest expense, net of interes
t income, increased $11 million, or 4%, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $274 million in 2001, due to hig
her average debt balances, including advances
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from affiliates, during 2001 com
pared to 2000.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income tax expense was $119 mill
ion in 2001 (including $118 million charged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to operating expenses and $1 mil
lion charged to other income (deductions)),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulting in an effective tax ra
te of 34% in 2001 compared to 35% in 2000. Net
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income increased by $2 million,
or 1%, to $228 million in 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 31, 2000 VER
SUS 1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operating revenues increased $15
0 million, or 8%, to $2.1 billion in 2000,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql largely in line with growth in e
lectric energy delivery volumes, which for 2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were 6% higher than in 1999. Thi
s increase was due to the effects of warmer than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql normal summer weather and an ext
remely cold fourth quarter of 2000, as well as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2% increase in end-use consumers
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total operating expenses increas
ed $153 million, or 11%, to $1.6 billion.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Higher operation and maintenance
expense accounted for $101 million of the total
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increase in operating expenses,
which reflected a $52 million recoverable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql write-off of certain restructuri
ng expenses and other regulatory assets, as well
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as increased regulated third-par
ty transmission rates. Depreciation and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amortization expense was $21 mil
lion higher in 2000 compared to 1999. 2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflects a full year of deprecia
tion expense, whereas prior to July 1, 1999,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql depreciation expense had been re
directed from transmission and distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets to nuclear production ass
ets in accordance with regulatory orders. This
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory practice ceased follo
wing the 1999 Restructuring Legislation. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, depreciation expense i
ncreased due to property, plant and equipment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additions to improve system capa
bility and reliability. Taxes other than income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes, primarily representing gr
oss receipts taxes, increased $13 million.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other income (deductions) - net
decreased to $3 million in income in 2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from $17 million in 1999. Result
s in 1999 were affected by a $12 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (pre-tax) gain on a settlement r
elated to a transmission services agreement with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another utility company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest expense, net of interes

t income, decreased $16 million, or 6%, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $263 million in 2000, primarily
due to the remarketing of certain debt at lower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest rates.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income tax expense increased $14
million, or 13%, to $120 million in 2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including $118 million charged
to operating expenses and $2 million charged to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other income (deductions)), resu
lting in an effective tax rate of 35% in 2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compared to 32% in 1999. The eff
ective tax rate in 2000 was affected by higher
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql state income taxes, while 1999 w
as affected by the resolution of a tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contingency. Net income increase
d by $3 million, or 1%, to $226 million in 2000.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL CONDITION, LIQUIDITY A
ND CAPITAL RESOURCES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash Flows -- Cash flows used in
operating activities during the first six
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months of 2002 were $69 million
compared to cash flows provided by operating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql activities of $199 million for 2
001. The decrease of $268 million reflected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql higher accounts receivable in 20
02, largely from TXU Energy, due to the start-up
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of billing REPs for transmission
and distribution charges effective January 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, partially offset by higher
cash income (net income adjusted for noncash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income and expense items).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows provided by operating
activities were $675 million in 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compared to $441 million and $62
3 million in 2000 and 1999, respectively. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increase in cash flows provided
by operating activities in 2001 was due largely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to significant increases in acco
unts payable to affiliates and lower cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments for income taxes. The i
ncrease in accounts payable relates to billings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from affiliates for professional
services incurred primarily to address
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance issues associated wit
h the restructuring of the Texas electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql industry effective January 1, 20
02. Cash payments allocated from US Holdings to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor for income taxes decreased
to $33 million in 2001 from $125 million in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2000. This decrease was attribut

able to several factors, including a tax refund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received during 2001, as well as
the impact of higher deductions for expenses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such as bad debts and software d
evelopment. In 2000, the decrease in cash flows
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from operating activities was al
so largely due to cash payments for income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes, which were $125 million i
n 2000 versus a refund of $33 million in 1999.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows provided by financing
activities during the first six months of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002 were $339 million, an incre
ase of $190 million, or 128%, compared to $149
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million for 2001. In 2002, Oncor
issued $295 million in commercial paper and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1.2 billion of Old Notes, which
was offset by debt retirements of $352 million,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $50 million of stock repurchases
and net repayments of $734 million of advances
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from affiliates, including amoun
ts classified in long-term debt.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows used in financing act
ivities were $66 million in 2001 compared
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to cash flows provided by financ
ing activities of $81 million in 2000 and cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flows used in financing activiti
es of $114 million in 1999. As a result of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restructuring of US Holdings and
related refinancings, there were substantial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql early retirements and issuances
of long-term debt in 2001. Financing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transactions during the year end
ed December 31, 2001 associated with debt
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocated from US Holdings inclu
ded the following:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ISSUANCES
REPURCHASES
/
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql RETIREMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (MILLIONS OF DOLLARS)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql First mortgage bonds............
...........
$400
$848
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Advances from affiliates - net..
...........
964
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Other debt......................
...........
72
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total...........................
$1,364
$920
====
on of advances from affiliates was
ause Oncor anticipated refinancing these
be issued during 2002. In May 2002, Oncor
ong-term debt.
ivities, which primarily consisted of
million and $361 million for the six months
spectively. Investing activities in 2002 also
sbursed to settle interest rate swaps as
ondensed consolidated financial statements for
02 and 2001 in this prospectus.
ivities for 2001 totaled $596 million
$509 million for 1999. Capital expenditures
and $489 million for 2001, 2000 and 1999,
al expenditures were primarily associated with
frastructure development and improvements to
the Texas electricity markets. Capital
26 million for 2002, including spending for
\page
ng operations as well as discretionary spending
s, and are expected to be funded by cash flows
ing the six months ended June 30, 2002,
ed or made scheduled principal payments on
At December 31, 2001, $1.2 billi

classified as long-term debt bec
advances with long-term debt to
refinanced these advances with l
Cash flows used in investing act
capital expenditures, were $304
ended June 30, 2002 and 2001, re
reflected $39 million in cash di
discussed in Note 7 to Oncor's c
the six months ended June 30, 20
Cash flows used in investing act
versus $505 million for 2000 and
were $635 million, $517 million
respectively. Increases in capit
transmission and distribution in
prepare for the restructuring of
expenditures are estimated at $5
20
maintenance and growth of existi

on potential development project
from operations.
Issuances and Retirements -- Dur
Oncor issued, redeemed, reacquir
long-term debt as follows:
ISSUANCES
RETIREMENTS
------------------(MILLIONS OF DOLLARS)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql First mortgage bonds............

....................
$
$297
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Medium term notes...............
....................
55
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Senior secured notes (Old Notes)
....................
1,200
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql --------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total...........................
..........
$1,200
$352
====
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At June 30, 2002, $500 million o
f advances from affiliates was classified
anticipated refinancing these borrowings with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long-term debt. Oncor completed
this refinancing in August 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On August 8, 2002, Oncor redeeme
d all of its 8.5% first mortgage bonds due
875% first mortgage bonds due February 1, 2022,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in aggregate principal amounts o
f approximately $115 million and $112 million,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively. Oncor funded the r
edemptions through the issuance of commercial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paper, advances from affiliates
and cash from operations. These amounts were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql classified as long-term debt due
currently as of June 30, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In May 2002, Oncor issued the Ol
d Notes. One series, the Old 2012 Notes, of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $700 million is due May 1, 2012
and bears interest at the rate of 6.375%, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other series, the Old 2032 N
otes, of $500 million is due May 1, 2032 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bears interest at the rate of 7.
0%. The Old Notes are initially secured by an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal principal amount of Oncor'
s first mortgage bonds; however, the lien of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those bonds may be released in c
ertain circumstances. Proceeds from the issuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were used by Oncor to repay long
-term advances from affiliates. In March and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 2002, Oncor entered into a
series of forward interest rate swaps with a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql group of banks to effectively fi
x the interest rates prior to the issuance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old Notes. As a result of th
e forward interest rate swaps, the effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rates of interest of the Old 201
2 Notes and the Old 2032 Notes are approximately
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.65% and 7.26%, respectively. F
or more information, see Note 7 to Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condensed consolidated financial
statements for the six months ended June 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002 and 2001 in this prospectus
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On August 30, 2002, Oncor issued

two series of its debentures in a private
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql placement. One series of $200 mi
llion is due September 1, 2007 and bears
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest at the rate of 5.0%, an
d the other series of $800 million is due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 1, 2022 and bears inte
rest at the rate of 7.0%. Proceeds from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance were used by Oncor to r
epay advances from affiliates and to repay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding commercial paper.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As of June 30, 2002, the secured
long-term debt of Oncor consisted of $3.3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion of first mortgage bonds
and Old Notes that are secured by a lien on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantially all of its tangibl
e electric transmission and distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property. US Holdings remains ob
ligated on Oncor's first mortgage bonds. None of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the long-term debt obligations o
f TXU Corp. or US Holdings are guaranteed or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured by Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's mortgage restricts the p
ayment of dividends to the amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's retained earnings. At Ju
ne 30, 2002, there were no restrictions on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of dividends under these
provisions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql During the remainder of 2002, On
cor will have financing needs to fund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ongoing working capital requirem
ents, maturities of long-term debt and repayment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of advances from affiliates. Onc
or intends to fund these financing needs through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the issuance of commercial paper
, issuance of long-term debt or other securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and bank borrowings.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capitalization -- As part of its
restructuring, US Holdings determined that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the initial capitalization of On
cor at January 1, 2002 would consist of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 40% shareholder's
equity and 60% debt (total short-term and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long-term debt and advances from
affiliates) to match the capital structure upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the transmission and distr
ibution rates approved by the PUCT are based. At
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 30, 2002, Oncor's capitaliz
ation ratio was consistent with this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In April 2002, Oncor repurchased
69,000 shares of its common stock
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (adjusted for stock split) from
US Holdings for $50 million. In July 2002, Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql repurchased another 69,000 share
s (adjusted for stock split) of its common stock

\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for $50 million. US Holdings use
d the proceeds from the share repurchases to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql repay advances from TXU Corp.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Short-term Financing and Liquidi
ty Facilities -- Short-term liquidity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements are expected to be
met through advances from US Holdings and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance of commercial paper.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In April 2002, US Holdings, TXU
Energy and Oncor entered into a joint $1.0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion 364-day revolving credit
facility with a group of banks that terminates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 22, 2003. This facility wi
ll be used for working capital and general
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporate purposes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql During the second quarter of 200
2, Oncor began issuing commercial paper to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fund its short-term liquidity re
quirements. The new commercial paper programs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allow each of TXU Energy and Onc
or to issue up to $2.4 billion and $1.0 billion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of commercial paper, respectivel
y.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The new $1.0 billion 364-day rev
olving credit facility, TXU Corp.'s and US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings' existing $1.4 billion
credit facility that expires in February 2005,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and TXU Corp.'s $500 million thr
ee-year revolving credit facility with a group
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of banks that terminates in May
2005 provide back-up for outstanding commercial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paper under the TXU Corp., TXU E
nergy and Oncor programs. As of June 30, 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql total outstanding commercial pap
er under these programs was $1.1 billion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which Oncor's portion was $295 m
illion. As of June 30, 2002, TXU Corp. had $186
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million outstanding under its co
mmercial paper program, which was discontinued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in July 2002. At that time, TXU
Corp. was removed as a borrower under the $1.4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion credit facility. Commerc
ial paper issuances are limited to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql availability under the back-up c
redit facilities, which was $2.2 billion at June
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 30, 2002, after deducting outsta
nding letters of credit and outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql borrowings. In July 2002, US Hol
dings entered into a $400 million credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facility that terminates no late

r than November 30, 2002, that will also provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql back-up for outstanding commerci
al paper. On August 30, 2002, US Holdings, TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy and Oncor entered into a
joint $400 million credit facility that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminates November 30, 2002, th
at will also provide back-up for outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial paper.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is also provided short-ter
m financing by TXU Corp. and affiliated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql companies. Oncor had short-term
advances from affiliates of $128 million and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $108 million outstanding as of J
une 30, 2002 and December 31, 2001,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor also from time to time may
utilize short-term facilities to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql temporarily fund maturities and
early redemptions of long-term debt, as well as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql short-term requirements. If thes
e facilities become unavailable for any reason,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other liquidity sources would be
needed.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Covenants -- The terms
of certain financing arrangements of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corp. and its consolidated subsi
diaries contain financial covenants that require
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintenance of specified fixed c
harge coverage ratios, shareholders equity to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql total capitalization ratios and
leverage ratios and/or contain minimum net worth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants. TXU Corp. and its con
solidated subsidiaries have credit rating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants in certain other finan
cing arrangements and commercial agreements that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would affect Oncor's liquidity i
n the event of a downgrade to below investment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grade status. As of June 30, 200
2, TXU Corp. and its consolidated subsidiaries
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were in compliance with all such
applicable covenants.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The goal of TXU Corp. and its su
bsidiaries is to continue to maintain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit ratings necessary to allo
w Oncor and other subsidiaries of TXU Corp. to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql access the commercial paper mark
et. Oncor is unable to predict what impact a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql downgrade of the credit ratings
of TXU Corp. and its other subsidiaries would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have on the credit ratings of On
cor. If TXU Corp. and/or certain of TXU Corp.'s
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries were to experience
a substantial downgrade of their credit ratings,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which none of them anticipate, O
ncor's access to the commercial paper markets
ulting in the need to seek other liquidity
above, contain terms pursuant to which the
agreements may be adjusted depending on the
d also contain cross default provisions with a
h of the $1.0 billion 364-day revolving credit
lion credit facility entered into on August 30,
any subsidiary thereof that exceeds the
ty of outstanding balances under such facility
gy and US Holdings, but not as to Oncor. Also,
a default by Oncor or any subsidiary thereof
cause the maturity of outstanding balances to
ty as to Oncor and US Holdings, but not as to
of these facilities, a default by US Holdings
cause the maturity of outstanding balances
\page
rated as to US Holdings, but not as to Oncor or
.4 billion credit facility and the recent $400
into in July 2002, a default by US Holdings or
eds the threshold would cause the maturity of
facility to be accelerated. Under the $500
dit facility, a default by TXU Corp. or any
the threshold would cause the maturity of
facility to be accelerated.
, through its subsidiaries, has certain
through sales of customer accounts receivable.
of accounts receivable are funded by sales of
might no longer be possible, res

sources.
The credit facilities, discussed
interest rates charged under the
credit rating of the borrower an
$50 million threshold. Under eac
facility and the recent $400 mil
2002, a default by TXU Energy or
threshold would cause the maturi
to be accelerated as to TXU Ener
under each of these facilities,
that exceeds the threshold would
be accelerated under such facili
TXU Energy. Further, under each
that exceeds the threshold would
22
under such facility to be accele

TXU Energy. Under each of the $1
million credit facility entered
any subsidiary thereof that exce
outstanding balances under such
million three-year revolving cre
subsidiary thereof that exceeds
outstanding balances under such
Sale of Receivables -- TXU Corp.
facilities to provide financing
Under the facilities, purchases
undivided interests therein to f
inancial institutions. Accounts receivable are

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continually sold to replace thos
e accounts receivable that have been collected.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certain US subsidiaries of TXU C
orp. sell customer accounts receivable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Receivables Company, a wholl
y-owned bankruptcy remote indirect subsidiary of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Corp., which sells undivided
interests in accounts receivable it purchases
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to financial institutions. As of
January 1, 2002, the facility includes TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy Retail, TXU SESCO Energy
Services Company, Oncor and TXU Gas as qualified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originators of accounts receivab
le under the program. TXU Receivables Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may sell up to an aggregate of $
600 million in undivided interests in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receivables purchased from the o
riginators under the program. As of June 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, Oncor had sold $76 million
face amount of receivables to TXU Receivables
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company under the program in exc
hange for cash of $36 million and $39 million in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subordinated notes, with $1 mill
ion of losses on sales for the six months ended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 30, 2002, principally repre
senting the interest on the underlying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing. These losses approxim
ated 4% of the cash proceeds from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receivables sales on an annualiz
ed basis. If the program terminates, cash flows
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Oncor would temporarily stop
until the undivided interests of the financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql institutions were repurchased. T
he level of cash flows would normalize in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 16 to 31 days. TXU
Business Services, an affiliate of Oncor,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services the purchased receivabl
es and is paid a market-based servicing fee by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Receivables Company. The sub
ordinated notes receivable from TXU Receivables
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company represent Oncor's retain
ed interest in the transferred receivables and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are recorded at book value, net
of allowances for bad debts, which approximates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair value due to the short-term
nature of the subordinated notes, and are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in accounts receivable
in the consolidated balance sheet.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulatory Asset Securitization
-- The Settlement Plan approved by the PUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides Oncor with a financing
order authorizing it to issue securitization
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonds in the aggregate amount of
$1.3 billion to monetize and recover
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation-related regulatory as
sets. The Settlement Plan provides that there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be an initial issuance of t
he bonds in the amount of up to $500 million

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql followed by a second issuance fo
r the remainder after 2003. For more information
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning securitization of reg
ulatory assets, see Note 3 to Oncor's combined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements for the yea
rs ended December 31, 2001, 2000 and 1999 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note 3 to Oncor's condensed cons
olidated financial statements for the six months
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended June 30, 2002 and 2001 in
this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONTINGENCIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legal Proceedings -- On November
21, 2000, the City of Denton, Texas and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Texas cities filed suit in
the 134th Judicial District Court of Dallas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql County, Texas against US Holding
s, TXU Gas and TXU Corp. The petition alleges
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims for breach of contract, n
egligent representation, fraudulent inducement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of contract, breach of duty of g
ood faith and fair dealing and unjust enrichment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related to the defendants' alleg
ed exclusion of certain revenues from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cities' franchise fee base. Onco
r assumed the obligations of US Holdings in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with this lawsuit pur
suant to the Business Separation Agreement. No
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified damages have been alle
ged. On January 31, 2002, US Holdings, TXU Gas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and TXU Corp. entered into a Mem
orandum of Understanding with the plaintiffs to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settle this lawsuit, subject to
the execution of a definitive settlement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement. Final versions of the
settlement document have been provided to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plaintiff cities for execution.
If any plaintiff cities decline to execute the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement, the suit will contin
ue as to those cities. Oncor believes the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allegations in this suit are wit
hout merit and intends to vigorously defend this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suit against any plaintiff citie
s that do not execute the settlement. Oncor does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not believe the ultimate resolut
ion of this suit will have a material effect on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its financial position, results
of operations or cash flows.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General -- Oncor is involved in
various other legal and administrative
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, the ultimate resolu
tion of which, in the opinion of management, is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not expected to have a material
effect upon its financial position, results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations or cash flows.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGULATION AND RATES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulatory Settlement Plan -- On
December 31, 2001, US Holdings filed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Settlement Plan with the PUCT, a
nd it was approved by the PUCT on June 20, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Docket No. 25230. On August 5
, 2002, the PUCT issued a financing order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the Settlement Plan,
authorizing the issuance of transition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (securitization) bonds of $1.3 b
illion. The PUCT's order approving the
g order were appealed in five separate dockets
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Travis County, Texas District
Court in August 2002. Oncor is unable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql predict when the appeal process
related to the PUCT's approval of the Settlement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan and the financing order wil
l be concluded or the outcome of the appeal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql process. If the PUCT's approval
is upheld, the Settlement Plan resolves all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql major pending issues related to
US Holdings' transition to competition and will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supersede certain ongoing procee
dings that are related to the 1999 Restructuring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legislation. The Settlement Plan
does not remove regulatory oversight of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business. Oncor does not believe
that the outcome will materially affect Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql net financial results, as TXU En
ergy has agreed, under the Business Separation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, to hold Oncor harmles
s from the results of any disallowance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation-related items, includ
ing securitization of regulatory assets,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stranded costs and fuel reconcil
iation. For additional discussion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Settlement Plan and related item
s, see Note 3 to Oncor's condensed consolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements for the six
months ended June 30, 2002 and 2001 in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Open-Access Transmission -- At t
he federal level, FERC Order No. 888
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires all FERC-jurisdictional
electric public utilities to offer third
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties wholesale transmission s
ervices under an open-access tariff.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On January 3, 2002, the Supreme
Court of Texas issued a mandate affirming
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the judgment of the Court of App
eals that held that the pricing provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the PUCT's open access wholesale
transmission rules, which had mandated the use

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a particular rate setting met
hodology, were invalid because they exceeded the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statutory authority of the PUCT.
On January 10, 2002, Reliant Energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporated and the City Public
Service Board of San Antonio each filed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lawsuits in the Travis County, T
exas District Court against the PUCT and each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the entities to whom they had ma
de payments for transmission service under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invalidated pricing rules for th
e period January 1, 1997 through August 31,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1999, seeking declaratory orders
that, as a result of the application of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invalid pricing rules, the defen
dants owe unspecified amounts. US Holdings and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU SESCO are named defendants i
n both suits. Oncor is unable to predict the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outcome of this litigation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Summary -- Although Oncor cannot
predict future regulatory or legislative
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actions or any changes in econom
ic and securities market conditions, no changes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are expected in trends or commit
ments, other than those discussed in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus, which might signific
antly alter its basic financial position,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results of operations or cash fl
ows.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql QUANTITATIVE AND QUALITATIVE DIS
CLOSURE ABOUT MARKET RISK
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Market risk is the potential los
s Oncor may incur as a result of changes in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the market or fair value of a pa
rticular instrument. As a result of regulation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's business, Oncor has m
inimal exposure to energy price risk. To manage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql risks related to changes in inte
rest rates, Oncor may enter into derivative
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments and other contractua
l commitments for non-trading purposes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Rate Risk -- Oncor mana
ges its exposure to interest rate risk
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql primarily through its balance of
fixed and variable rate instruments. The table
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below provides information conce
rning Oncor's annual debt obligations as of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 31, 2002 that are sensitiv
e to changes in interest rates. Comparable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information as of June 30, 2002
is not significantly different from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 31, 2002 information provi
ded below. Weighted average variable rates are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql based on rates in effect at the
reporting date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql EXPECTED MATURITY DATE
MARCH 31, 2002
DECEMBER 31, 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql --------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql (MILLIONS OF DOLLARS, EXCEPT PER
CENTS)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql THEREFAIR
FAIR
2003
2004
2005
2006
AFTER
TOTAL
VALUE
TOTAL
VALUE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Long-term Debt
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql (including current
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql maturities)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Fixed Rate................ $ 17
6
$ 293
$ 220
$ 92
$ -$1,066
$1,847
$1,876
$2,052
$2,082
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Average interest rate.. 7.96%
6.78%
7.16%
6.75%
-8.10%
7.70%
-7
.78%
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Variable Rate ............ $ $ 400
$ -$ -$ -$1,200*
$1,600
$1,600
$1,600
$1,600
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Average interest rate..
-2.60%
---3.08%*
2.99%
-2
.93%
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql <FN>
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql *
Includes $1.2 billion of ad
vances from affiliates that Oncor refinanced in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql May 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Credit Risk -- Credit risk relat
es to the risk of loss that Oncor would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incur as a result of nonpayment
by its customers. Following deregulation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's primary customers are RE
Ps. As a requisite for obtaining and maintaining
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certification, a REP must meet t
he financial resource standards established by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the PUCT. REP certificates grant
ed by the PUCT are subject to suspension and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revocation for significant viola
tion of the Public Utility Regulatory Act and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PUCT rules. Significant violatio
ns include failure to timely remit payments for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invoiced charges to a transmissi
on and distribution utility pursuant to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of tariffs adopted by the
PUCT. Additionally, the PUCT's ratemaking

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql policies and practices permit re
covery of annual bad debt charge-offs through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved tariffs. Since most of
the transmission and distribution services
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided and invoiced by Oncor a
re to its affiliated REP, a material loss to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor arising from nonpayment by
its customers is considered unlikely.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CHANGES IN ACCOUNTING STANDARDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 142, "Goodwill and Othe
r Intangible Assets", became effective for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor on January 1, 2002. SFAS N
o. 142 requires, among other things, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocation of goodwill to report
ing units based upon the current fair value of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the reporting units and the disc
ontinuance of goodwill amortization. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amortization of Oncor's existing
goodwill ($0.8 million annually) ceased
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective January 1, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition, SFAS No. 142 requir
es completion of a transitional goodwill
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impairment test within six month
s from the date of adoption. It establishes a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql new method of testing goodwill f
or impairment on an annual basis, or on an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interim basis if an event occurs
or circumstances change that would reduce the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair value of a reporting unit b
elow its carrying value. Oncor has completed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transitional impairment test, th
e results of which indicated no impairment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql goodwill. If goodwill amortizati
on had ceased effective January 1, 2001, there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would not have been a material e
ffect on net income for the three or six months
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended June 30, 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 143, "Accounting for As
set Retirement Obligations", will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective for Oncor on January 1
, 2003. SFAS No. 143 requires the recognition of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a fair value liability for any r
etirement obligation associated with long-lived
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets. SFAS No. 143 also requir
es additional disclosures. Oncor will conform
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its accounting for asset retirem
ent obligations to the new standard.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 144, "Accounting for th
e Impairment or Disposal of Long-Lived
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assets", became effective for On
cor on January 1, 2002. SFAS No. 144 establishes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a single accounting model, based
on the framework established in SFAS No. 121,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Accounting for the Impairment o
f Long-Lived Assets and for Long-Lived Assets to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Be Disposed Of", for long-lived
assets to be disposed of by sale and resolves
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql significant implementation issue
s related to SFAS No. 121. The adoption of SFAS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 144 by Oncor has not affecte
d its financial position or results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 145, "Rescission of FAS
B Statements No. 4, 44 and 64, Amendment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FASB Statement No. 13, and Techn
ical Corrections", was issued in April 2002 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be effective for Oncor on J
anuary 1, 2003. One of the provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement is the rescission of S
FAS No. 4, "Reporting Gains and Losses from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Extinguishment of Debt", whereby
any gain or loss on the early extinguishment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql debt that was classified as an e
xtraordinary item in prior periods in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with SFAS No. 4, shall be reclas
sified if it does not meet the criteria of an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extraordinary item as defined by
Accounting Principles Board Opinion 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Reporting the Results of Operat
ions - Reporting the Effects of Disposal of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Segment of a Business, and Extra
ordinary, Unusual and Infrequently Occurring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Events and Transactions."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 146, "Accounting for Co
sts Associated with Exit or Disposal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Activities", was issued in June
2002 and will be effective for Oncor on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2003. SFAS No. 146 re
quires that a liability for costs associated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with an exit or disposal activit
y be recognized only when the liability is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurred and measured initially
at fair value.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For accounting standards not yet
adopted or implemented, Oncor is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evaluating the potential impact
on its financial position and results of
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BUSINESS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OVERVIEW OF ONCOR ELECTRIC DELIV
ERY COMPANY AND AFFILIATES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor was formed in the fourth q
uarter of 2001 and began operations on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2002. On that date, t
he regulated transmission and distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets of US Holdings and TXU SE
SCO were transferred to Oncor in connection with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the "unbundling" of those assets
required by the 1999 Restructuring Legislation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql See - "Overview of the Restructu
ring" below. Oncor is a wholly owned subsidiary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of US Holdings. Prior to January
1, 2002, US Holdings was an integrated electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utility directly engaged in the
production, purchase, transmission, distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and sale of electric energy in t
he north-central, eastern and western parts of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas. US Holdings is a wholly-o
wned subsidiary of TXU Corp.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU is a global energy services
company that engages in electricity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation, wholesale energy tra
ding and risk management, retail energy sales,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql energy delivery, other energy-re
lated services and, through a joint venture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telecommunications services. TXU
is one of the largest energy services companies
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the world with $41.4 billion
of assets as of June 30, 2002. As of June 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, TXU owned approximately 23
,000 megawatts of power generation. In the year
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 31, 2001, TXU sol
d 335 terawatt hours of electricity and 2.8
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trillion cubic feet of natural g
as. TXU delivers or sells energy to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 11 million residen
tial, commercial and industrial customers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql primarily in the United States,
Europe and Australia.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Within TXU, Oncor, TXU Gas and t
wo subsidiaries of TXU Gas are managed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collectively as the Oncor Group
and reported by TXU Corp. as its energy delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql segment. TXU Gas' two subsidiari
es managed within the Oncor Group are Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Utility Solutions (Texas) Compan
y and Oncor Utility Solutions (North America)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. While these two entitie
s share the Oncor name, they are not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries of Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither TXU Corp. nor any of its
other subsidiaries or affiliates,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including members of the Oncor G
roup other than Oncor, will guarantee or provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other credit or funding support
for any of the New Notes or any of the Remaining
tegrated electric delivery business;
ate reportable business segments.
:
or's electric transmission business
esale open access to Oncor's
transmission facilities transverse
exas and consist of 4,698 circuit
es and 9,859 circuit miles of 138-kV
over 900 substations.
or's electric distribution business
in its certificated service area.
counties and 370 incorporated
ral, eastern and western parts of
icity through Oncor to over
2.4 million residential customers and
l businesses). Oncor's distribution
of overhead primary conductors,
ry and street light conductors, 11,624
ductors and 6,864 miles of underground
ctors. The majority of Oncor's
25-kV and 12.5-kV.
ergy is by far the largest REP operating in
a. Oncor anticipates that approximately 90% of
welve months ended December 31, 2002 will come
Old Notes.
Oncor is managed as a single, in
consequently, there are no separ
Oncor's principal operations are
o
ELECTRIC TRANSMISSION - Onc
provides non-discriminatory whol

transmission facilities. Oncor's
almost 200,000 square miles of T
miles of 345-kV transmission lin
and 69-kV transmission lines and
o
ELECTRIC DISTRIBUTION - Onc
distributes electricity for REPs

Oncor's service area includes 92
municipalities in the north-cent
Texas. These REPs provide electr
2.7 million customers (including
350,000 commercial and industria
network consists of 54,873 miles
22,102 miles of overhead seconda
miles of underground primary con
secondary and street light condu
distribution network operates at
Oncor's transmission customers c
cooperatives and other distribut
consist of approximately 35 REPs
these REPs is TXU Energy. TXU En
Oncor's certificated service are
Oncor's total revenues for the t
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from TXU Energy.

\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's operations do not includ
e the generation or sale of electricity,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the procurement, supply or deliv
ery of fuel for the generation of electricity or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the solicitation or billing of r
etail electric customers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For a more detailed discussion o
f Oncor's principal operations see "Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business" below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OVERVIEW OF THE RESTRUCTURING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legislation was passed during th
e 1999 session of the Texas Legislature
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that restructured the electric u
tility industry in Texas. Among other matters,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the l999 Restructuring Legislati
on provided that by January 1, 2002, each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electric utility was required to
separate (unbundle) its business into the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: power generation oper
ations, a REP and a transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution company or separate
transmission and distribution companies. As a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result, TXU restructured certain
of its businesses effective January 1, 2002 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql began to participate in retail c
ompetition in the Texas electricity market on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Until December 31, 2001, US Hold
ings operated as a vertically-integrated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electric utility subsidiary of T
XU Corp., generating, transmitting and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributing electricity to cust
omers in its service territory. On January 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, US Holdings transferred to
Oncor its regulated transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution business and transf
erred to various subsidiaries of TXU Energy its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation assets and retail cus
tomers. Also, on January 1, 2002, the regulated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission and distribution bu
siness of TXU SESCO was transferred to Oncor. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, as of January 1, 2002,
TXU Energy acquired the following businesses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from within the TXU system: the
REP business of TXU SESCO; the energy trading
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business and the unregulated com
mercial/industrial retail gas operations of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Gas; and the energy management s
ervices businesses and other affiliates of TXU
ement and coal mining businesses that service
ldings and its subsidiaries possess all
nd certificates to enable them to conduct their
's principal US legal entities and their
he restructuring of TXU required by the 1999
s
efore Restructuring
Corp.
eft to right) - TXU Gas, TXU Electric Company
ox), labeled - TXU Energy Trading
fter Restructuring
Corp.
ft to right) - TXU Gas, US Holdings*
d box, labeled (left to right) - TXU Energy,
box, labeled (left to right) - TXU Generation,
etail
ch of Oncor's principal operations follows.
area is located in the north-central,
as, with a population in excess of 7 million \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
n of Texas. Electric service is provided to
Corp., including the fuel procur

the generation operations. US Ho
necessary franchises, licenses a
businesses.
The diagrams below summarize TXU
relationships before and after t
Restructuring Legislation:
CHART
Organization Chart wtih 2 column
Left Column
Title (centered over column) - B
Top Box, centered, labeled - TXU
Next level - 2 boxes, labeled (l
Next level - 1 box (under frst b
Right Column
Title (centered over column) - A
Top box, centered, labeled - TXU
Next level - 2 boes, labeled (le
Next level - 2 boxes under secon
Oncor
Next level - 3 boxes under first
TXU Energy Trading, TXU Energy R
___________________
*Formerly TXU Electric Company
[GRAPHIC OMITTED]
A more detailed discussion of ea
ONCOR'S BUSINESS
SERVICE AREA -- Oncor's service
eastern and western parts of Tex
about one-third of the populatio
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 2.7 million custom
ers in 92 counties and 370 incorporated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql municipalities, including the Da
llas-Fort Worth metropolitan area. The area is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql diversified commercial and indus
trial center with substantial banking,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance, telecommunications, e
lectronics, aerospace, petrochemical and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specialized steel manufacturing,
and automotive and aircraft assembly. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql territory served includes major
portions of the oil and gas fields in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Permian Basin and East Texas, as
well as substantial farming and ranching
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sections of the state.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ELECTRIC TRANSMISSION -- Oncor's
electric transmission business provides
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-discriminatory wholesale ope
n access to Oncor's transmission facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through business practices consi
stent with the standard of conduct rules enacted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the PUCT. The transmission sy
stem transverses almost 200,000 square miles of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas and consists of 4,698 circ
uit miles of 345-kilovolt (kV) transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lines, 9,859 circuit miles of 13
8- and 69-kV transmission line and over 900
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substations. Oncor is connected
by eight 345-kV lines to Reliant Energy Inc.; by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql three 345-kV, eight 138-kV and n
ine 69-kV lines to American Electric Power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company; by two 345-kV and eight
138-kV lines to the Lower Colorado River
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority; by four 345-kV and ni
ne 138-kV lines to the Texas Municipal Power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agency; by two asynchronous High
Voltage Direct Current interconnections to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utilities in the Southwest Power
Pool; and at several points with smaller
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql systems operating wholly within
Texas. Approximately 29,800 megawatts of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation capacity owned by ERC
OT market participants, including TXU Energy, is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connected to the Oncor transmiss
ion system.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is a member of ERCOT, an i
ntrastate network of investor-owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entities, cooperatives, public e
ntities, non-utility generators and power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql marketers. ERCOT is the regional
reliability coordinating organization for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql member electric power systems in
Texas, the Independent System Operator (ISO) of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interconnected transmission
system of those systems, and is responsible for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ensuring equal access to transmi
ssion service by all wholesale market
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants in the ERCOT region
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's electric transmission bu
siness supports the operation of the ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISO and all ERCOT members. The t
ransmission business has planning, design,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction, operation and main
tenance responsibility for the transmission grid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and for the load serving substat
ions. The transmission business is participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the ISO and other ERCOT uti
lities to plan, design and obtain regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval for and construct new t
ransmission lines necessary to increase bulk
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power transfer capability and to
remove existing limitations on the ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission grid. (See "Constru
ction Program" below)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmission services are provid
ed under tariffs approved by the PUCT and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the FERC. Transmission service o
ffers the use of the transmission system for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of power over facilitie
s operating at 60,000 volts and above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transformation service offers th
e use of substation assets to transform voltage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to below 60,000 volts. Other ser
vices offered by the transmission business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include system impact studies, f
acilities studies, and maintenance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substations and transmission lin
es owned by other parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ELECTRIC DISTRIBUTION -- Oncor's
electric distribution business distributes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electricity for REPs in its cert
ificated service area. These REPs provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electricity through Oncor to ove
r 2.7 million end-use consumers (including 2.4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million residential consumers an
d 350,000 commercial and industrial businesses).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's electric distribution bu
siness consists of the ownership, management,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction, maintenance and op
eration of the distribution network within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's certificated service are
a. The number of distribution network
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connections within Oncor's servi
ce territory has been growing an average of more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than 2% a year over the past sev
eral years. Operations include metering
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services, outage response servic
es and call center operations. In some
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql municipalities, operations also

include operation of the street lighting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql systems. As part of the restruct
uring of the Texas electric utility market,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metering services will be provid
ed on a competitive basis beginning in January
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2004 for commercial and industri
al customers and at the latest by September 2005
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for residential customers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's electric distribution bu
siness provides non-discriminatory open
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql access to Oncor's distribution f
acilities through business practices consistent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the terms and conditions fo
r retail delivery service enacted by the PUCT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective January 1, 2002, most
of the 2.7 million electricity consumers of US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings whose service was forme
rly regulated are free to choose from REPs who
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compete for their business. The
competing REPs are now Oncor's primary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers. (See "Customers" belo
w)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's distribution network rec
eives electricity from the transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grid through power distribution
substations and distributes electricity to end
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql users and wholesale customers th
rough 2,863 distribution feeders. The Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution network consists of
54,873 miles of overhead primary conductors,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22,102 miles of overhead seconda
ry and street light conductors, 11,624 miles of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underground primary conductors a
nd 6,864 miles of underground secondary and
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql street light conductors. The maj
ority of the distribution network operates at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25-kV and 12.5-kV.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Distribution services are provid
ed under tariffs approved by the PUCT. New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PUCT rules and market protocols
govern the commercial retail operations of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution companies and other
market participants.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Most of Oncor's transmission fac
ilities and the distribution lines have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been constructed over lands of o
thers pursuant to easements or along public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql highways and streets as permitte
d by law. The transmission facilities and the
from US Holdings to Oncor on January 1, 2002
n of the 1983 Mortgage. All of the transmission
network of Oncor are currently subject to the
latory, economic and technological changes
dustries are faced with increasing pressure to
ring to regulatory requirements. Oncor's
ariables, including price, reliability of
rnatives, new technologies and governmental
manages its operating costs and capital
business processes. These strategies focus on
operation and include initiatives to improve
value.
efficiency are of paramount importance to
. Oncor intends to play a key role in the new
y being dependable and flexible, and continuing
ow cost and high performance.
tion expenditures for the years 2002
llows:
04
---\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
$ 220
$ 250
265
285
485
$ 535
====
distribution network transferred

are currently subject to the lie
facilities and the distribution
lien of the Indenture.
STRATEGY -- As legislative, regu
occur, the energy and utility in
become more efficient while adhe
strategy considers a number of v
service, the cost of energy alte
regulations. Oncor aggressively
expenditures through streamlined
asset ownership, management and
return on assets and to maximize
Service quality, reliability and
REPs, their customers, and Oncor
competitive energy marketplace b
to build on TXU's tradition of l
CONSTRUCTION PROGRAM -- Construc
through 2004 are estimated as fo
2002
2003
20
------
------
--
(Millions of Dollars)
Transmission
$ 212
Distribution
314
-----Total
======
-----$ 526
======
-$
==
CUSTOMERS -- There are no indivi
dually significant unaffiliated customers

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon which Oncor's business or r
esults of operations are highly dependent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cooperatives and other distribut
ion customers. Oncor's distribution customers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consist of approximately 35 REPs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these REPs is TXU Energy. TXU En
ergy is by far the largest REP served in Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificated service area. Oncor
anticipates that approximately 90% of its total
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revenues for the twelve months e
nded December 31, 2002 will come from TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy. Each REP is licensed by
the PUCT and must satisfy credit criteria and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql post collateral under PUCT regul
ations. PUCT regulations require REPs to pay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invoices from distribution compa
nies within 35 days of receipt. Oncor provides
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPs with invoices and related m
eter readings on a daily basis.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGULATION AND RATES -- Oncor is
subject to various federal, state and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql local regulations. Oncor believe
s that it is not a public utility as defined in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Federal Power Act and has be
en advised by its counsel that it is not subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to general regulation under such
Act. Oncor possesses all necessary franchises,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses and certificates to ena
ble it to conduct its businesses.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The PUCT has original jurisdicti
on over Oncor's transmission rates and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services. With respect to Oncor'
s distribution rates and services, the PUCT has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql original jurisdiction in unincor
porated areas and those municipalities that have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ceded original jurisdiction to t
he PUCT and has exclusive appellate jurisdiction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to review the rate and service o
rders and ordinances of municipalities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generally, the Public Utility Re
gulatory Act has prohibited the collection of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any rates or charges by a public
utility that does not have the prior approval
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the PUCT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulatory Settlement Plan -- Th
e Settlement Plan was approved by the PUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on June 20, 2002 in Docket No. 2
5230. On August 5, 2002, the PUCT issued a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing order pursuant to the
Settlement Plan, authorizing the issuance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transition (securitization) bond
s of $1.3 billion. The PUCT's order approving
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Settlement Plan and the fina

ncing order were appealed in five separate
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dockets in Travis County, Texas
District Court in August 2002. Oncor is unable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to predict when the appeal proce
ss related to the PUCT's approval of the
g order will be concluded or the outcome of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appeal process. If the PUCT's ap
proval is upheld, the Settlement Plan resolves
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all major pending issues related
to US Holdings' transition to competition and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will supersede certain ongoing p
roceedings that are related to the 1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restructuring Legislation. The S
ettlement Plan does not remove regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql oversight of Oncor's business. O
ncor does not believe that the outcome of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appeal process will materially a
ffect Oncor's net financial results, as TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy has agreed, under the Bus
iness Separation Agreement, to hold Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql harmless from the results of any
disallowance of power production-related items,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including securitization of regu
latory assets, stranded costs and fuel
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reconciliation. See RELATIONSHIP
S AMONG ONCOR AND OTHER TXU COMPANIES in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The major terms of the Settlemen
t Plan relating to Oncor are:
Transmission and Distributi
on Rates -- In 2002, Oncor will implement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an excess mitigation credit (EMC
) in the amount of $350 million (plus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest), applied over a two-ye
ar period as a reduction to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission and distribution ra
tes charged to REPs. This amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflects resolution of stranded
cost mitigation, approximately $8.2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion of fuel costs covering t
he period of July 1998 through 2001,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the unrecovered fuel balance at
December 31, 2001, and other items.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's sole responsibility with
respect to those matters will be to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql act as disbursement agent on beh
alf of TXU Energy. TXU Energy has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed to reimburse Oncor for th
e financial results of reducing its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-bypassable tariffs with resp
ect to the EMC.

Regulatory Asset Securitiza
tion -- Oncor has received a financing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order, which, if upheld on appea
l, authorizes it to issue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securitization bonds in the aggr
egate amount of $1.3 billion to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monetize and recover generationrelated regulatory assets. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing order provides for an
initial issuance of securitization
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonds in the amount of up to $50
0 million, followed by a second
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance for the remainder after
2003. The Settlement Plan and related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing order resolve all issu
es related to generation-related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory assets and liabilitie
s.
Lawsuit and Regulatory Proc
eeding Resolution-- The parties agree to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seek dismissal of a number of pe
nding lawsuits and regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Implementation of the 1999 Restr
ucturing Legislation -- As noted in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate sections of the foll
owing discussion, the Settlement Plan, if PUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval is upheld, will result
in the final determination concerning certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the legislation. I
f the PUCT's approval of the Settlement Plan is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not upheld, certain proceedings
discussed below will remained unresolved.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rates -- All REPs operating in O
ncor's service area, including TXU Energy,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay the same rates and other cha
rges for distribution services. All other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution companies in the ER
COT region pay Oncor the same rates and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges for transmission service
s. Oncor's distribution rates are based on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts of energy delivered. Tra
nsmission rates are based upon amounts of energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitted under "postage stamp
" rates that do not vary with the distance the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql energy is transmitted. The trans
mission and distribution rates that are in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect as of January 1, 2002 for
Oncor are based upon the resolution of US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings' rate case brought befo
re the PUCT, discussed below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mitigation (see Regulatory Settl
ement Plan above) -- From January 1, 1998
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through June 30, 1999, US Holdin
gs' earnings of $170 million in 1998 and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $52 million in 1999 in excess of
the regulatory earnings cap (mitigation) were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recorded as additional depreciat
ion of nuclear production assets. Effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql July 1, 1999, following the 1999
Restructuring Legislation, all of US Holdings'
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and TXU SESCO's earnings in exce
ss of the regulatory earnings cap of $92 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in 1999, $310 million in 2000 an
d $40 million in 2001 were recorded as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduction of US Holdings' and TX
U SESCO's revenues, with a corresponding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory liability recorded.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On October 3, 2001, the PUCT iss
ued a final order that addressed Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges for transmission and dis
tribution service when retail competition would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql begin. Among other things, that
order required Oncor to reduce rates (with a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corresponding reimbursement from
TXU Energy), over the period from 2002-2008,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for both the 1998-2000 earnings
in excess of the regulatory earnings cap and an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql estimate of the 2001 earnings in
excess of the regulatory earnings cap.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On June 20, 2001, US Holdings fi
led a petition with the Texas Supreme Court,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requesting that the Court issue
a writ of mandamus compelling the PUCT to vacate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the portions of its then prelimi
nary orders that require US Holdings to halt
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mitigation of stranded costs and
reverse the stranded cost mitigation already
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taken. On December 31, 2001, the
Supreme Court denied the petition. The PUCT's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decision continues to be under a
ppeal to the Travis County, Texas District
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stranded Cost Recovery -- In Oct
ober 1999, US Holdings filed an application
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the PUCT for a financing or
der (Docket No. 21527) to permit the issuance by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a special purpose subsidiary of
Oncor of $1.65 billion of transition bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured by payments, in the form
of a non-bypassable charge, from retail
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers. On May 1, 2000, the P
UCT signed a final order rejecting US Holdings'
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request for the $1.65 billion an
d authorized only $363 million. US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed an appeal on May 2, 2000,
with the Travis County, Texas District Court. On

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 7, 2000, the District
Court issued a final judgment that reversed part
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the PUCT's financing order, a
ffirmed other aspects of the PUCT's financing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order, and ordered the case rema
nded to the PUCT for further proceedings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consistent with the judgment. US
Holdings and various other parties appealed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this judgment directly to the Su
preme Court of Texas. On June 6, 2001, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Supreme Court of Texas issued wh
at US Holdings believes is a favorable ruling
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that should allow the special pu
rpose subsidiary of Oncor to issue transition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonds of approximately $1.3 bill
ion. On October 18, 2001, the Supreme Court
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remanded the case to the PUCT fo
r determination of the final amount of permitted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securitization. On January 2, 20
02, the remand proceeding (Docket No. 24892) was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated with Docket No. 252
30 relating to the Settlement Plan. However, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 5, 2002, the PUCT issued
a financing order, in connection with its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the Settlement Plan
authorizing the issuance of transition bonds of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1.3 billion. Appeals of the PUC
T's approval of the Settlement Plan and related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing order are pending. Onc
or cannot predict when the appeal process will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be completed, but is prepared to
move quickly in connection with the issuance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transition bonds if the financin
g order issued by the PUCT is upheld. If the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PUCT's approval of the financing
order is upheld, issues involving
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securitization will be resolved.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As noted above, the principal an
d interest on the transition bonds would be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured by payments from retail
consumers designed to enable recovery of
sets and other qualified costs. These regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets have a carrying value of
approximately $1.84 billion. Once transition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonds are issued, the full amoun
t of the regulatory assets will be amortized to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense by Oncor over the life o
f the transition bonds. Any amount of the $1.84
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion which is in excess of th
e cash flows from transition bonds will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expensed at the time such shortf
all, if any, is determined.
he federal level, FERC Order No. 888
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires all FERC-jurisdictional
electric public utilities to offer third
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties wholesale transmission s

ervices under an open-access tariff.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporated, and the City Publi
c Service Board of San Antonio each filed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Environmental -- Oncor is subjec
t to various federal, state and local
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations dealing with environ
mental matters. These matters primarily include:
storm water discharges from
large construction sites,
the protection of wetlands,
the habitats of endangered and threatened
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql species and cultural resources i
n the siting of transmission rights of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql way,
the regulation of undergrou
nd gasoline storage tanks,
the management and disposal
of hazardous wastes, and
the abatement of oil spills
from occasional equipment failures.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the past, polychlorinated bip
henyls (PCBs) were commonly utilized in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transformers and other transmiss
ion and distribution equipment as insulation. In

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with policies that me
et or exceed industry and regulatory standards,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor maintains an ongoing progr
am of identifying PCB-contaminated equipment and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql abating the contaminates. Oncor
estimates that less than 5% of its equipment in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use is PCB-contaminated under En
vironmental- Protection Agency standards. Over
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time all PCB-contaminated equipm
ent will be replaced by Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor utilizes waste disposal si
tes operated by third parties for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposal of PCBs, lubricating oi
l, lighting and other wastes. Oncor has a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql program of regularly auditing th
ese sites for compliance with applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations.
s, TXU Gas and TXU Corp. The petition alleges
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and TXU Corp. entered into a Mem
orandum of Understanding with the plaintiffs to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settle this lawsuit, subject to
the execution of a definitive settlement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plaintiff-cities for execution.
If any plaintiff-cities decline to execute the
ue as to those plaintiff-cities. Oncor believes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the allegations in this suit are
without merit and intends to vigorously defend
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this suit against any plaintiffcities that do not execute the settlement. Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not believe the ultimate re
solution of this suit will have a material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect on its financial position
, results of operations or cash flows.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is party to other lawsuits
arising in the ordinary course of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business. Oncor believes, based
on its current knowledge and advice of counsel,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the ultimate resolution of
all such lawsuits and claims should not have a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material adverse effect on its f
inancial position, results of operation or cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flows.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MANAGEMENT OF ONCOR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Corp. controls US Holdings,
and US Holdings, in turn, controls Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql US Holdings elects Oncor's board
of directors, and US Holdings may choose to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appoint additional directors, or
remove current directors, from time to time at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its discretion. Each member of t
he board of directors holds office until a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor is elected and qualifi
ed or until resignation or removal. Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql board of directors elects its of
ficers and each of Oncor's officers serve at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion of the board of direc
tors. Oncor began operations on January 1, 2002;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consequently, Oncor's management
did not receive any compensation for services
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rendered to Oncor prior to that
date. Oncor's directors receive no compensation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in their capacity as directors.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql BOARD OF DIRECTORS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql OTHER POSITIONS AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql OFFICES PRESENTLY HELD
DATE
FIRST ELECTED AS
PRESENT PRINCIPAL OCCUPATION OR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql WITH ONCOR (CURRENT TERM
DIRECTOR
EMPLOYMENT AND PRINCIPAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql EXPIRES
(CURRENT TE
RM EXPIRES
BUSINESS (PRECEDING FIVE YEARS),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql NAME OF DIRECTOR
AGE
IN MAY 2003)
IN MAY 2003)
OTHER DIRECTO
RSHIPS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -------------------- -------------------------------------------------- --------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql T. L. Baker
57
President
November 6, 2001
President of Oncor and
TXU Gas; prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql thereto, President of TXU
Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Company;
prior thereto,
President,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electric Service Division of TX
U Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Company, TXU Gas Distribution D
ivision of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql TXU Gas (TXU Gas Distribution
) and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql SESCO; prior thereto, Execu
tive Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql President of TXU Electric Compa
ny; prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql thereto, Senior Vice Presiden
t of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electric Company; other dire
ctorships:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql TXU Gas.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Michael J. McNally
48
None
November 6, 2001
Executive Vice President a
nd Chief Financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Officer of TXU Corp. and Execu
tive Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql President of US Holdings; prior
thereto,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql President, Transmission Divisi
on of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electric Company; other director
ships: US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Holdings, TXU Energy, TXU Ga
s and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Europe Limited.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Erle Nye
65
Chairman of the Board and
November 6, 2001
Chief Executive of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Chief Executive
TXU Corp., Oncor, TXU Energy, TXU Gas and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql US Holdings; prior thereto, Pres
ident and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Chief Executive of TXU Corp. and
Chairman
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql of the Board and Chief Executive
of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electric Company; other director
ships: TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Corp., US Holdings, TXU Energy,
TXU Gas and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql TXU Europe Limited.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql R. A. Wooldridge
64
None
November 6, 2001
Partner in the law f
irm of Hunton &
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Williams;
other
directorsh
ips:
US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Holdings, TXU Energy, TXU Ga
s and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Europe Limited.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql EXECUTIVE OFFICERS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql POSITIONS AND OFFICES
DATE
FIRST ELECTED TO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql PRESENTLY HELD (CURRENT
PRESE
NT OFFICES (CURRENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql TERM EXPIRES
TERM
EXPIRES
BUSINESS EXPERIENCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql NAME OF OFFICER
AGE
IN MAY 2003)
IN MAY 2003)
(PRECEDING FIVE Y
EARS)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -------------------- ----- ------------------------ -------------------------- ---------------------------------------------\par\pard\plain\fs16
65
Ch
airman of the Board and
November 12, 2001
Chief Executive of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Chief Executive
TXU Corp., Oncor, TXU Energy, TXU Gas and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql US Holdings; prior thereto, Pres
ident and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Chief Executive of TXU Corp. and
Chairman of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql the Board and Chief Executive of
TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electric Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql T. L. Baker
57
President
December 10, 2001
President of Oncor and
TXU Gas; prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql thereto,
President of TXU
Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Company;
prior
thereto,
President,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electric Service Division of T
XU Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Company, TXU Gas Distributio
n and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql SESCO; prior thereto, Exec
utive Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql President of TXU Electric Comp
any; prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql thereto, Senior Vice Preside
nt of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electric Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql M. S. Greene
56
Pr
esident, Transmission
December 10, 2001
President of Transmission
Division of Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Division
and TXU Lone Star Pipeline Division of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Gas; prior thereto, Executive Vi
ce President
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql of TXU Fuel Company and TXU Mini
ng Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql H. Dan Farell

53
Pr
esident, Distribution
December 10, 2001
President of Distribution
Division of Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Division
and TXU Gas Distribution; prior thereto,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Executive Vice President of TXU
Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Company, TXU Gas Distribution an
d TXU SESCO;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql prior thereto, Chairman of the B
oard of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Electricity Limited and Managing
Director of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql TXU Australia.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Scott R. Longhurst
35
Se
nior Vice President August 1, 2002
Senior Vice President - Fi
nance and Strategy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Finance and Strategy
of Oncor and TXU Gas; prior thereto, Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql President - Corporate Financial
Planning of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql TXU Business Services Company; p
rior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql thereto, Vice President of Finan
ce of TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Europe Limited; prior thereto, C
hief
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Financial Officer of Shell Oil P
roducts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Joint Venture Saudi Arabia.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There is no family relationship
between any of the above-named directors
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and executive officers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OWNERSHIP OF ONCOR'S COMMON STOC
K
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All of Oncor's common stock is o
wned by US Holdings, a wholly-owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary of TXU Corp. There is
no public trading market for Oncor's common
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITY OWNERSHIP OF MANAGEMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following lists the common s
tock of TXU Corp. owned by the directors
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and executive officers of Oncor
at September 13, 2002. The named individuals
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have sole voting and investment
power for the shares of common stock reported.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ownership of such common stock b
y the directors and executive officers,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individually and as a group, con
stituted less than 1% of the outstanding shares
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of TXU Corp. common stock at Sep
tember 13, 2002.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER OF SHARES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NAME
BENEFICIA
LLY OWNED
SHARE PLANS (1)
TOTAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql T. L. Baker.....................
.
89,928
27,518
117,446
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. Dan Farell ..................
.
27,182
18,393
45,575
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql M. S. Greene ...................
.
29,617
18,728
48,345
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Scott R. Longhurst..............
.
8,515
397
8,912
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Michael J. McNally..............
.
124,469
33,031
157,500
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Erle Nye........................
.
411,899
85,961
497,860
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R. A. Wooldridge................
.
8,526
0
8,526
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All Directors and Executive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officers as a group (7)........
700,136
184,028
884,164
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Share units held in deferre
d compensation accounts under the TXU Deferred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Incentive Compensation Plan
(DICP), or in the case of Mr. Longhurst,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql share units under the TXU Europe
Group Sharesave Scheme (the Europe Plan).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Although the DICP allows such un
its to be paid only in the form of cash,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investments in units under the D
ICP and the Europe Plan create essentially
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same investment stake in the
performance of TXU Corp.'s common stock as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql do investments in actual shares
of common stock.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CERTAIN RELATIONSHIPS AND RELATE
D TRANSACTIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R. A. Wooldridge, a director of
Oncor, is a partner of Hunton & Williams,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which provides legal services to
Oncor, TXU Corp. and other affiliates of Oncor.
\page
HER TXU COMPANIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On January 1, 2002, the regulate
d transmission and distribution assets of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql US Holdings and TXU SESCO (colle
ctively, the T&D Assets) were transferred to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor in connection with the res
tructuring of TXU accomplished pursuant to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1999 Restructuring Legislation.
The relationships of the TXU entities affected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the restructuring and their r
ights and obligations with respect to their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collective assets and liabilitie
s are contractually described in the Business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Separation Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Business Separation Agreemen
t provides, in general, that the economic
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impacts of the transition from a
regulated to a competitive environment will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql borne by TXU Energy, including s
tranded costs as finally determined and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related items. Oncor will collec
t from (or refund to) REPs, through a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-bypassable tariff (or credit
), amounts associated with the unregulated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business' transition to competit
ion and remit to (or collect from) TXU Energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such amounts which have not
been securitized. Oncor's sole responsibility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be to act as collection or
disbursement agent and Oncor has no rights or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations with respect to any
such amounts collected or refunded. These
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collection agent obligations wil
l be resolved by the proposed regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement. See "BUSINESS -- "On
cor's Business -- Regulation and Rates" above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition, pursuant to the Bus
iness Separation Agreement, Oncor
assumed all liabilities and
obligations relating to the T&D Assets and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the business and operations rela
ted thereto, accruing or arising prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to or after January 1, 2002;
assumed certain litigation
pending at January 1, 2002 relating to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql T&D Assets; and
agreed to indemnify the oth
er TXU entities for liabilities and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations assumed.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In connection with the restructu
ring, Oncor entered into other agreements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with TXU entities. The Decommiss
ioning Funds Collection Agent Agreement between
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor and TXU Generation provide
s for the collection by Oncor and the remittance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to TXU Generation of a decommiss
ioning funds tariff in an amount determined and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved by the PUCT for the dec
ommissioning of the Comanche Peak nuclear
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generating station. Oncor acts m
erely as a collection agent for TXU Generation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this agreement and is not
otherwise obligated for decommissioning costs.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor entered into two ERCOT Sta
ndard Generation Interconnection Agreements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with TXU Generation for the inte
rconnection between Oncor's transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution facilities and the
generation facilities owned by TXU Generation. A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmission Maintenance Agreeme
nt with TXU Generation provides for maintenance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operation support services b
y Oncor to the generation facilities owned by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Generation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor assumed certain interconne
ction obligations of US Holdings under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql three power purchase agreements
with unaffiliated entities. In addition, US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings remains obligated on On
cor's first mortgage bonds.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURPOSE AND EFFECT OF THE EXCHAN
GE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is offering to exchange th
e New 2012 Notes for the Old 2012 Notes and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the New 2032 Notes for the Old 2
032 Notes, as described herein. Unlike the Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, the New Notes will be reg
istered under the Securities Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Old Notes were sold to Lehma
n Brothers Inc., Barclays Capital Inc., BNP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARIBAS Securities Corp., BNY Ca
pital Markets, Inc., First Union Securities Inc.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Westdeutsche Landesbank Giro

nzentrale (the Initial Purchasers) on May 6,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002. In connection with the sal
e of the Old Notes, Oncor and the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers entered into a regist
ration rights agreement, dated May 6, 2002 (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Rights Agreement),
which requires Oncor, among other things, to:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) use its reasonable best effo
rts to cause an exchange offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement that it f
iles with the SEC under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act with respect to both series
of the New Notes identical in all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material respects to the respect
ive series of Old Notes to be declared
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective under the Securities A
ct within 270 days after May 6, 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and upon such effectiveness to p
romptly offer both series of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered New Notes for the res
pective series of unregistered Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes and consummate such exchan
ge offer within 315 days after May 6,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002 and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) in certain circumstances, to
cause a shelf registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement that it files with the
SEC covering continuous re-sales of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old Notes or New Notes, as t
he case may be, to be declared
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective under the Securities A
ct within the later of (i) 180 days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after being required or requeste
d to file such shelf registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement and (ii) 270 days afte
r May 6, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Registration Rights Agreemen
t also provides that if Oncor fails to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform any of its obligations s
et forth in (a) and (b) above, the interest rate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be increased by 0.50% per a
nnum until any such default is cured, or if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earlier, the date on which the O
ld Notes may first be resold in reliance on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rule 144(k) of the Securities Ac
t, provided however, the additional interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate may not exceed in the aggre
gate 0.50% per annum.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The New Notes of each series ref
erred to in (a) above will be issued in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql like principal amount and identi
cal in all material respects as the respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series of Old Notes, except that
the New Notes will be registered under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act and will be issue
d without a restrictive legend. Consequently,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the New Notes, unlike the Old No
tes, may be resold by a holder without any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restrictions on their transfer u
nder the Securities Act. Also, the registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and related additional in
terest provisions applicable to the Old Notes do
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not apply to the New Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A copy of the Registration Right
s Agreement has been filed as an exhibit to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the exchange offer registration
statement of which this prospectus is a part.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The exchange offer contemplated
hereby is being made pursuant to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Rights Agreement to
satisfy some of Oncor's obligations under that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "holder" with respect t
o this exchange offer means any person in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whose name Old Notes are registe
red on Oncor's books, any other person who has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtained a properly completed as
signment from the registered holder or any DTC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant whose Old Notes are
held of record by DTC.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By tendering Old Notes for New N
otes in this exchange offer, a holder is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to represent to Oncor, am
ong other things, that
any New Notes to be receive
d by such holder will be acquired in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ordinary course of such holder's
business,
such holder has no arrangem
ent or understanding with any person to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participate in the distribution
of the New Notes within the meaning of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act,
such holder is not an "affi
liate" of Oncor, as defined in Rule 405
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Securities Act, or if
such holder is such an affiliate, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder will comply with the regi
stration and prospectus delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of the Securities A
ct to the extent applicable, and
\page
if such holder is not a bro
ker-dealer, such holder is not engaged in,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and does not intend to engage in

, a distribution of such New Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Based on an interpretation by th
e staff of the SEC set forth in no-action
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql letters issued to third-parties,
Oncor believes that the New Notes issued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this exchange offer
may be offered for resale and resold or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise transferred by any hol
der of such New Notes (other than any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder which is an "affiliate" o
f Oncor within the meaning of Rule 405 under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act and except as oth
erwise discussed below with respect to holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are broker-dealers) withou
t compliance with the registration and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus delivery requirements
of the Securities Act, so long as such New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes are acquired in the ordina
ry course of such holder's business and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder has no arrangement or und
erstanding with any person to participate in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution (within the meaning
of the Securities Act) of such New Notes. Any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder who tenders Old Notes in
this exchange offer for the purpose of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participating in a distribution
of the New Notes cannot rely on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation by the staff of t
he SEC and must comply with the registration and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus delivery requirements
of the Securities Act in connection with a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secondary resale transaction. Un
der no circumstances may this prospectus be used
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any offer to resell or any r
esale or other transfer in connection with a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution of the New Notes. I
n the event that Oncor's belief is not correct,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of the New Notes who tra
nsfer New Notes in violation of the prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery provisions of the Secur
ities Act and without an exemption from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration thereunder may incu
r liability thereunder. Oncor will not assume or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnify holders against any su
ch liability.
New Notes for its own account in exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Old Notes, where such Old No
tes were acquired by such broker-dealer as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result of market-making activiti
es or other trading activities, must agree to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver a prospectus in connecti
on with any resale of such New Notes. Any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker-dealer may use this prosp
ectus for such purpose. Any such broker-dealer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be deemed to be an "underwri
ter" within the meaning of the Securities Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The foregoing interpretation of

the staff of the SEC does not apply to, and this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus may not be used in co
nnection with, the resale by any broker-dealer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any New Notes received in exc
hange for an unsold allotment of Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchased directly from Oncor. S
ee PLAN OF DISTRIBUTION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor has not entered into any a
rrangement or understanding with any person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to distribute the New Notes to b
e received in this exchange offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This exchange offer is not being
made to, nor will Oncor accept tenders for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange from, holders of Old No
tes in any jurisdiction in which this exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer or the acceptance thereof
would not be in compliance with the securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or blue sky laws of such jurisdi
ction.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TERMS OF THE EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the terms and subject to th
e conditions set forth in this prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and in the accompanying Letter o
f Transmittal, Oncor will accept any and all Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes properly tendered and not
validly withdrawn prior to 5:00 p.m., New York
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql City time, on the Expiration Dat
e. Holders may tender their Old Notes in whole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in part in minimum denominati
ons only of $1,000 and integral multiples of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,000 in excess thereof. For ea
ch Old Note accepted for exchange, the holder of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old Note will receive a New
Note (of the respective series) having a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount equal to that o
f the surrendered Old Note.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The form and terms of the New No
tes of each series will be the same as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form and terms of the Old Notes
of the respective series. However, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration rights and related
additional interest provisions and the transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restrictions applicable to such
Old Notes will not be applicable to the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes and the New Notes, unlike
the Old Notes, will be registered under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act. The New Notes of
each series will evidence the same debt as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes of the respective seri
es. The New Notes will be issued under and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to the benefits of the
Indenture pursuant to which the Old Notes were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No interest will be paid in conn

ection with this exchange. The New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will bear interest, at the respe
ctive interest rate, from and including the last
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date (as herein
after defined) on the Old Notes, or if an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date has not ye
t occurred, from and including May 6, 2002, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date the Old Notes were issued.
Accordingly, the holders of Old Notes that are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accepted for exchange will not r
eceive accrued but unpaid interest on such Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes at the time of tender or e
xchange. Rather, such interest will be paid on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the exchanged New Notes on the f
irst Interest Payment Date after the Expiration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As of the date of this prospectu
s, $700,000,000 in aggregate principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the Old 2012 Notes and
$500,000,000 in aggregate principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old 2032 Notes is outstandin
g. This prospectus, together with the Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal, is being sent to al
l registered holders of Old Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will be deemed to have acc
epted validly tendered Old Notes when it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have given oral (promptly
confirmed in writing) or written notice thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Exchange Agent. The Excha
nge Agent will act as agent for the tendering
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders for the purpose of recei
ving the New Notes from Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Remaining Old Notes will rem
ain outstanding and will be entitled to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and benefits of the Inden
ture. If any tendered Old Notes are not accepted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for exchange because of an inval
id tender or the occurrence of certain other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql events set forth herein or other
wise, such Old Notes will be returned, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense, to the tendering holder
thereof as promptly as practicable after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXPIRATION DATE; EXTENSIONS; AME
NDMENTS TO THE EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As defined hereinabove, Expirati
on Date means 5:00 p.m., New York City
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, on __________, 2002 unless
extended. If extended, "Expiration Date" means
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the latest date and time to whic

h this exchange offer is extended.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will notify the Exchange A
gent of any extension of the current
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date by oral (promptl
y confirmed in writing) or written notice and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will mail to the registered hold
ers an announcement thereof, prior to 9:00 a.m.,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York City time, on the next
business day after such Expiration Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor reserves the right, in its
sole discretion,
to delay accepting any Old
Notes, to extend this exchange offer or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate this exchange offer if
any of the conditions set forth below
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under "Conditions to the Exchang
e Offer" shall not have been satisfied
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by giving oral (promptly confirm
ed in writing) or written notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such delay, extension or termina
tion to the Exchange Agent, or
to amend the terms of this
exchange offer in any manner.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any such delay, extension, termi
nation or amendment will be followed as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly as practicable by oral
or written notice thereof to the registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders. If Oncor amends this ex
change offer in a manner that Oncor determines,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in its sole discretion, constitu
tes a material change, Oncor will promptly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclose such material amendment
by means of a prospectus supplement. Oncor will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribute such prospectus suppl
ement to the registered holders of Old Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and will extend this exchange of
fer to the extent required by law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Without limiting the manner in w
hich Oncor may choose to make a public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql announcement of any delay, exten
sion, amendment or termination of this exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer, Oncor will have no obliga
tion to publish, advertise, or otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communicate any such public anno
uncement, other than by making a timely release
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to an appropriate news agency.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon satisfaction or waiver of a
ll the conditions to this exchange offer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will accept, promptly afte
r the Expiration Date, all Old Notes properly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered and not validly withdra
wn and will issue New Notes of the respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series promptly after acceptance

of such Old Notes. See "Conditions to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer." For purposes of
this exchange offer, Oncor will be deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have accepted properly tendered
Old Notes for exchange when it shall have given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql oral (promptly confirmed in writ
ing) or written notice thereof to the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes will only be issued af
ter the Exchange Agent timely receives (1)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a properly completed and duly ex
ecuted Letter of Transmittal (or facsimile
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof or an agent's message (a
s hereinafter defined) in lieu thereof) and (2)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other required documents. Ho
wever, Oncor reserves the absolute right to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waive any defects or irregularit
ies in the tender or conditions of this exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes that are not accepted
for exchange and Old Notes submitted for a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater principal amount than th
e tendering holder desires to exchange will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql returned, without expense, to th
e tendering holder thereof as promptly as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practicable after the expiration
or termination of this exchange offer.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITIONS TO THE EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding any other term o
f this exchange offer, Oncor will not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to exchange any New Not
es for any Old Notes and may terminate this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer before the accept
ance of any Old Notes for exchange, if:
any action or proceeding is
instituted or threatened in any court or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by or before any governmental ag
ency with respect to this exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer which, in Oncor's reasonab
le judgment, might materially impair
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its ability to proceed with this
exchange offer; or
any law, statute, rule or r
egulation is proposed, adopted or enacted,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any existing law, statute, ru
le or regulation is interpreted by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql staff of the SEC, which, in Onco
r's reasonable judgment, might
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially impair its ability to

proceed with this exchange offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If Oncor determines in its sole
discretion that any of the above conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exist, Oncor may
refuse to accept any tender
ed Old Notes and return all previously
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered Old Notes to the tender
ing holders,
extend this exchange offer
and retain all Old Notes tendered prior to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Expiration Date, subject, ho
wever, to the rights of holders who
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered such Old Notes to withd
raw their tendered Old Notes, or
waive such unsatisfied cond
itions with respect to this exchange offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and accept all properly tendered
Old Notes which have not been validly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawn. If such waiver consti
tutes a material change to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer, Oncor will promp
tly disclose such waiver by means of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus supplement that will
be distributed to the registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders, and Oncor will extend t
his exchange offer to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCEDURES FOR TENDERING--REGIST
ERED HOLDERS AND DTC PARTICIPANTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registered holders of Old Notes,
as well as beneficial owners who are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql direct participants in DTC, who
desire to participate in this exchange offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql should follow the directions set
forth below and in the Letter of Transmittal.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All other beneficial owners shou
ld follow the instructions received from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their broker or nominee and shou
ld contact their broker or nominee directly. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instructions set forth below and
in the Letter of Transmittal DO NOT APPLY to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these beneficial owners.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registered Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A registered holder must complet
e, sign and date the Letter of Transmittal,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or facsimile thereof, have the s
ignatures thereon guaranteed if required by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or such facsimile to the Exchang
e Agent prior to the Expiration Date. In

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, either
certificates for such tende
red Old Notes must be received by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Agent along with the Le
tter of Transmittal or
the holder must comply with
the guaranteed delivery procedures
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Old Notes will be properly t
endered if the Letter of Transmittal and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other required documents are rec
eived by the Exchange Agent at the address set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth below under "Exchange Agen
t" prior to the Expiration Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The tender by a holder that is n
ot validly withdrawn prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date will constitute
an agreement between such holder and Oncor in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the terms and su
bject to the conditions set forth herein and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Letter of Transmittal.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE METHOD OF DELIVERY OF OLD NO
TES, THE LETTER OF TRANSMITTAL AND ALL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHER REQUIRED DOCUMENTS TO THE
EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE HOLDER, BUT THE DELIVERY WIL
L BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONFIRMED BY THE EXCHANGE AGENT.
INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THAT HOLDERS USE AN OVERNIGHT OR
HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TIME SHOULD BE ALLOWED TO ASSURE
DELIVERY TO THE EXCHANGE AGENT BEFORE THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXPIRATION DATE. NO OLD NOTES, L
ETTER OF TRANSMITTAL OR OTHER REQUIRED DOCUMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SHOULD BE SENT TO ONCOR. HOLDERS
MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMERCIAL BANKS, TRUST COMPANIE
S OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR SUCH HOLDERS.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signatures on a Letter of Transm
ittal or a notice of withdrawal, as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case may be, must be guaranteed
by an Eligible Institution (as defined below)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless the Old Notes tendered pu
rsuant thereto are tendered
by a registered holder who
has not completed the box entitled "Special

l Delivery Instructions" on the Letter
ble Institution (as defined below).
a Letter of Transmittal or a notice of
are required to be guaranteed, such guarantor
tered national securities exchange or of the
es Dealers, Inc., a commercial bank or trust
espondent in the United States or an "eligible
e meaning of Rule 17Ad-15 under the Securities
(Eligible Institution).
gned by a person other than the registered
herein, such Old Notes must be endorsed or
ted bond power signed by such registered holder
appears on such Old Notes.
y Old Notes or bond or stock powers are
dministrators, guardians, attorneys-in-fact,
rs acting in a fiduciary or representative
should so indicate when signing. Moreover,
satisfactory to Oncor, must be submitted with
such person or persons authority to so act.
s a participant in DTC's systems may make
by causing DTC to transfer such Old Notes into
DTC in accordance with DTC's procedures for
accompanied by either
r facsimile thereof, with any required
Payment Instructions" or "Specia

of Transmittal or
o
for the account of an Eligi
In the event that signatures on

withdrawal, as the case may be,
must be a member firm of a regis
National Association of Securiti
company having an office or corr
guarantor institution" within th
Exchange Act of 1934, as amended
If a Letter of Transmittal is si
holder of any Old Notes listed t
accompanied by a properly comple
as such registered holder's name
If a Letter of Transmittal or an
signed by trustees, executors, a
officers of corporations or othe
capacity, such person or persons
unless waived by Oncor, evidence
the Letter of Transmittal as to
DTC Participants
Any financial institution that i
book-entry delivery of Old Notes
the Exchange Agent's account at
transfer. Such delivery must be
o
the Letter of Transmittal o
signature guarantees or
an agent's message (as here
inafter defined),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any other required documents
, and must, in any case, be transmitted to and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by the Exchange Agent a
t the address set forth below under "Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent" prior to the Expiration D
ate or the guaranteed delivery procedures
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described below must be complied
with. The Exchange Agent will make a request to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql establish an account with respec
t to the Old Notes at DTC for purposes of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer within two busine
ss days after the date of this prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "agent's message" means
a message, electronically transmitted by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC to, and received by, the Exc
hange Agent, and forming a part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Book-Entry Confirmation (as defi
ned in the Letter of Transmittal), which states
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that DTC has received an express
acknowledgement from a beneficial owner of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes stating that such benefici
al owner has received and agrees to be bound by,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and makes each of the representa
tions and warranties contained in the Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal, and that such benef
icial owner agrees that Oncor may enforce the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal against su
ch beneficial owner.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranteed Delivery Procedures
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders who wish to tender their
Old Notes and
whose Old Notes are not imm
ediately available,
who cannot deliver their Ol
d Notes, the Letter of Transmittal or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other required documents to the
Exchange Agent prior to the Expiration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date, or
who cannot complete the pro
cedures for book-entry tender on a timely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis may effect a tender if:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) the tender is made through
an Eligible Institution;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) prior to the Expiration Date
, the Exchange Agent receives

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from such Eligible Institution a
properly completed and duly executed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notice of Guaranteed Delivery (b
y facsimile transmission, mail or hand
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery), setting forth the nam
e and address of the holder, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate number(s) of such Ol
d Notes (unless tender is to be made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by book-entry transfer) and the
principal amount of Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered, stating that the tende
r is being made thereby and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guaranteeing that, within five N
ew York Stock Exchange trading days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the date of delivery of th
e Notice of Guaranteed Delivery, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates for all physically
tendered Old Notes, in proper form for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer, or Book-Entry Confirma
tion, as the case may be, together
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a properly completed and du
ly executed Letter of Transmittal (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facsimile thereof or agent's mes
sage in lieu thereof), with any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required signature guarantees an
d all other documents required by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal, will be d
eposited by the Eligible Institution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Exchange Agent; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) the certificates and/or othe
r documents referred to in clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) above are received by the Ex
change Agent within the time specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon request to the Exchange Age
nt, a Notice of Guaranteed Delivery will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sent to holders who wish to tend
er their Old Notes according to the guaranteed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery procedures set forth ab
ove.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Miscellaneous
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All questions as to the validity
, form, eligibility (including time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt), acceptance of tendered
Old Notes and withdrawal of tendered Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be determined by Oncor in i
ts sole discretion, which determination will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final and binding. Oncor reserve
s the absolute right to reject any and all Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes not properly tendered or a
ny tendered Old Notes that Oncor's acceptance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which would, in the opinion of O
ncor's counsel, be unlawful. Oncor also reserves
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the right to waive any defects,
irregularities or conditions of tender as to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular Old Notes. Oncor's in

terpretation of the terms and conditions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer (including the in
structions in the Letter of Transmittal) will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final and binding on all parties
. Unless waived, any defects or irregularities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with tenders of Ol
d Notes must be cured within such time as Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall determine. Although Oncor
intends to notify tendering holders of defects
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or irregularities with respect t
o their tenders of Old Notes, none of Oncor, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Agent, nor any other pe
rson shall incur any liability for failure to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql give such notification. Old Note
s will not be deemed properly tendered until
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such defects or irregularities h
ave been cured or waived. Any Old Notes received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Exchange Agent that are n
ot properly tendered (and which have not been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cured or waived) will be returne
d by the Exchange Agent to the tendering
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders, unless otherwise provid
ed in the Letter of Transmittal, as promptly as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practicable following the Expira
tion Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes will only be issued af
ter timely receipt by the Exchange Agent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) certificates for the Old Not
es tendered for exchange or a timely Book-Entry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confirmation of such Old Notes i
nto the Exchange Agent's account at DTC, (2) a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properly completed and duly exec
uted Letter of Transmittal (or facsimile thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or agent's message in lieu there
of) and (3) all other required documents. If any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered Old Notes are not accep
ted for any reason set forth in the terms and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions of this exchange offe
r or if Old Notes are submitted for a greater
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount than the holder
desires to exchange, such unaccepted or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-exchanged Old Notes will be
returned, without expense, to the tendering
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder thereof (or, in the case
of Old Notes tendered by book-entry transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into the Exchange Agent's accoun
t at DTC pursuant to the book-entry transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures described below, such
unaccepted or non-exchanged Old Notes will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credited to an account maintaine
d with DTC) as promptly as practicable after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration or termination of thi
s exchange offer.
New Notes for its own account in exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Old Notes, where such Old No
tes were acquired by such broker-dealer as a

es or other trading activities, must acknowledge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that it will deliver a prospectu
s in connection with any resale of such New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes. See PLAN OF DISTRIBUTION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor reserves the right in its
sole discretion to purchase or make offers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any Old Notes that remain ou
tstanding subsequent to the Expiration Date or,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as set forth above under "Condit
ions to the Exchange Offer," to terminate this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer and, to the exten
t permitted by applicable law, purchase Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes in the open market, in pri
vately negotiated transactions or otherwise. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of any such purchases or o
ffers could differ from the terms of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITHDRAWAL OF TENDERS OF OLD NOT
ES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise provided her
ein, tenders of Old Notes may be validly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawn at any time prior to 5
:00 p.m., New York City time, on the Expiration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To validly withdraw a tender of
Old Notes in this exchange offer, a written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or facsimile transmission notice
of withdrawal must be received by the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent at its address set forth h
erein prior to 5:00 p.m., New York City time, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Expiration Date. Any such no
tice of withdrawal must
specify the name of the per
son having deposited the Old Notes to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawn, which Oncor refers to
as the "Depositor,"
identify the Old Notes to b
e withdrawn (including the certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number (unless tendered by bookentry transfer)),
be signed by the holder in
the same manner as the original signature
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Letter of Transmittal by
which such Old Notes were tendered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including any required signatur
e guarantees) or be accompanied by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents of transfer sufficient
to have the Trustee with respect to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old Notes register the trans
fer of such Old Notes in the name of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the person withdrawing the tende
r, and
specify the name in which a
ny such Old Notes are to be registered, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql different from that of the Depos
itor. If Old Notes have been tendered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to book-entry transfer,
any notice of withdrawal must specify
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the name and number of the accou
nt at DTC to be credited with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawn Old Notes, in which ca
se a notice of withdrawal will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective if delivered to the Ex
change Agent by any method of delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in this paragraph.
, form and eligibility (including time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt) of such withdrawal noti
ces will be determined by Oncor, which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination shall be final and
binding on all parties. Any Old Notes so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawn will be deemed not to
have been properly tendered for purposes of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer and will be retur
ned to the holder thereof without cost to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder as soon as practicable af
ter withdrawal. Consequently, no New Notes will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be issued with respect thereto u
nless the Old Notes so withdrawn are properly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retendered. Validly withdrawn Ol
d Notes may be properly retendered by following
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one of the procedures described
above under "Procedures for Tendering" at any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time prior to the Expiration Dat
e.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE AGENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Bank of New York has been ap
pointed as Exchange Agent of this exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer. Requests for additional c
opies of this prospectus or of the Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal and requests for Not
ice of Guaranteed Delivery with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange of the Old Notes should
be directed to the Exchange Agent addressed as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Bank of New York
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporate Trust Operations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reorganization Unit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 101 Barclay Street - 7 East
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Diane Amoroso
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Telephone: (212) 298-1915
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Facsimile: (212) 815-3738
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FEES AND EXPENSES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will pay the expenses of s
oliciting tenders. The principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql solicitation is being made by ma
il; however, additional solicitation may be made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by telecopier, telephone or in p
erson by officers and employees of Oncor and its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliates.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor has not retained any deale
r-manager in connection with this exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer and will not make any paym
ents to brokers, dealers or others soliciting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptances of this exchange off
er. Oncor, however, will pay the Exchange Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable and customary fees fo
r its services and will reimburse it for its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable out-of-pocket expense
s in connection therewith. Oncor will also pay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql brokerage houses and other custo
dians, nominees and fiduciaries the reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql out-of-pocket expenses incurred
by them in forwarding copies of this prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and related documents to the ben
eficial owners of the Old Notes and in handling
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or forwarding tenders for exchan
ge for their customers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will pay all transfer taxe
s, if any, applicable to the exchange of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Old Notes pursuant to this e
xchange offer. If, however, certificates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representing Old Notes for princ
ipal amounts not tendered or accepted for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange are to be delivered to,
or are to be issued in the name of, any person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than the registered holder
of Old Notes tendered, or if tendered Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are registered in the name of an
y person other than the person signing the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related Letter of Transmittal, o
r if a transfer tax is imposed for any reason
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than the exchange of the O
ld Notes pursuant to this exchange offer, then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the amount of any resulting tran
sfer tax (whether imposed on the registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder or any other persons) wil
l be payable by the tendering holder. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory evidence of payment
of such tax or exemption therefrom is not

nsmittal, the amount of such transfer tax will
ring holder.
at the same carrying value as the Old Notes
ich is the aggregate principal amount of
in Oncor's accounting records on the date of
r loss for accounting purposes will be
is exchange offer. The cost of this exchange
term of the New Notes.
t have appraisal or dissenters' rights in
fer.
\page
orth certain terms and provisions of the
will issue the New Notes under the
officer's certificate. The provisions of the
incorporated herein by this reference and the
available upon request to the Trustee. The
uments contain the full legal text of the
n. Because this section is a summary, it does
New Notes or the Indenture. This summary is
entirety by reference to all of the provisions
re, including definitions of certain terms used
submitted with the Letter of Tra

be billed directly to such tende
ACCOUNTING TREATMENT
Oncor will record the New Notes
for which they are exchanged, wh
tendered Old Notes, as reflected
exchange. Accordingly, no gain o
recognized in connection with th
offer will be amortized over the
APPRAISAL OR DISSENTERS' RIGHTS
Holders of the Old Notes will no
connection with this exchange of
44
DESCRIPTION OF THE NEW NOTES

The following description sets f
New Notes.
GENERAL
Oncor issued the Old Notes, and
Indenture, as supplemented by an
Indenture, as supplemented, are
Indenture as so supplemented is
Indenture and its associated doc
matters described in this sectio
not describe every aspect of the
subject to and qualified in its
of the New Notes and the Indentu
in the Indenture. Oncor also inc
ludes references in parentheses to certain

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sections of the Indenture. Whene
ver Oncor refers to particular sections or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined terms of the Indenture h
erein, such sections or defined terms are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference herein
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The New Notes are two separate s
eries of debt securities that Oncor may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue under the Indenture. The N
ew Notes and all other debt securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including any Remaining Old Not
es) issued under the Indenture are collectively
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to herein as Indenture
Securities. The Indenture permits Oncor to issue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an unlimited amount of Indenture
Securities from time to time. All Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any one series nee
d not be issued at the same time, and a series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be reopened for issuances of
additional Indenture Securities of such series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to reestablish additional ter
ms of such series. This means that Oncor may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time, without the c
onsent of the existing holders of the New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any series, create and issue
further Indenture Securities having the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and conditions as the New
Notes in all respects, except for issue date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue price and, if applicable,
the initial interest payment on such Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities. Additional Indenture
Securities issued in this manner will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated with, and will form
a single series with, the previously
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding Indenture Securities
, including the New Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The New Notes will be identical
in all material respects to the Old Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except that the registration rig
hts and related additional interest provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and transfer restrictions applic
able to the Old Notes are not applicable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes. The New Notes of each
series will be of the same series as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective series of Old Notes,
and will be considered as a single class for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of any acts of Holders
(such as voting and consents) under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture. To the extent any Old
Notes are not exchanged for New Notes, those
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes will remain outstandin
g under the Indenture and will rank pari passu
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the New Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The New Notes will be issued in
fully registered form, without interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql coupons, and in denominations of
$1,000 and integral multiples of $1,000 in

ll initially be issued in book-entry form and
re fully registered global certificates. Such
stered in the name of Cede & Co., as registered
rchases of beneficial interests in these global
k-entry form. Except under the limited
prospectus, purchasers of such beneficial
ficates representing their beneficial interests
y" below.
without charge, other than for applicable
ges, at The Bank of New York, New York, New
n May 1, 2012, and the New 2032 Notes will
rlier redeemed. Interest on the New Notes of
at the rate of 6.375% with respect to the
f 7.000% with respect to the New 2032
st period on the basis of a 360 day year
hs and with respect to any period less
of the actual number of days elapsed
\page
arrears on May 1 and November 1 of each
2, and at maturity;
last interest payment on the Old Notes,
paid on the Old Notes then interest
excess thereof. The New Notes wi

will be represented by one or mo
global certificates will be regi
owner and as nominee for DTC. Pu
certificates will be made in boo
circumstances described in this
interests will not receive certi
in the New Notes. See "Book-Entr
The New Notes may be transferred
taxes or other governmental char
York.
MATURITY AND INTEREST
The New 2012 Notes will mature o
mature on May 1, 2032, unless ea
each series will:
o
be payable in U.S. dollars
New 2012 Notes and at the rate o

Notes;
o
be computed for each intere
consisting of twelve 30 day mont

than a full month, on the basis
during such period;
45
be payable semi-annually in
year, commencing November 1, 200

o
accrue from the date of the
and if no such interest has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will accrue from May 6, 2002; an

d
be paid to the persons in w
hose names the New Notes are registered at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the close of business on April 1
6th for the May 1 interest payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date and on October 17th for the
November 1 interest payment date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor shall not be required to m
ake transfers or exchanges of the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes for a period of 15 days ne
xt preceding an interest payment date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The covenants contained in the I
ndenture will not afford holders of New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes protection in the event of
a highly-leveraged transaction involving Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OPTIONAL REDEMPTION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor may redeem the New Notes o
f each series, in whole or in part, at its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option, at any time prior to the
ir maturity. Oncor will give notice of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intent to redeem the New Notes a
t least 30 days prior to the redemption date. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor redeems all or any part of
the New Notes of any series, it will pay a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "make-whole" redemption price eq
ual to the greater of
100% of the principal amoun
t of the New Notes of such series being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed or
the sum of the present valu
es of the remaining scheduled payments of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal and interest on the Ne
w Notes of such series being redeemed,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discounted to the redemption dat
e on a semi-annual basis (assuming a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 360-day year consisting of twelv
e 30-day months) at the Treasury Rate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plus (i) .25% with respect to th
e New 2012 Notes or (ii) .30% with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the New 2032 Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plus, in each case, accrued inte
rest on those New Notes of such series to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the redemption date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Treasury Rate" means, with resp
ect to any redemption date, the rate per
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annum equal to the semi-annual e
quivalent yield to maturity of the Comparable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a percentage of its principal am
ount) equal to the Comparable Treasury Price for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such redemption date.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Comparable Treasury Issue" mean
s the United States Treasury security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selected by the Independent Inve
stment Banker as having a maturity comparable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the remaining term of the New No
tes to be redeemed that would be utilized, at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the time of selection and in acc
ordance with customary financial practice, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pricing new issues of corporate
debt securities of comparable maturity to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remaining term of the New Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Comparable Treasury Price" mean
s, with respect to any redemption date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the average of the bid and a
sked prices for the Comparable Treasury Issue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (expressed in each case as a per
centage of its principal amount) on the third
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business day preceding such rede
mption date, as set forth in the H. 15 Daily
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Update of the Federal Reserve Ba
nk or (ii) if such release (or any successor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql release) is not published or doe
s not contain prices on such business day, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reference Treasury Dealer Quotat
ion actually obtained by the Trustee for such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "H.15(519)" means the weekly sta
tistical release entitled "H.15 (519)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Selected Interest Rates", or any
successor publication, published by the Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Governors of the Federal Rese
rve System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "H.15 Daily Update" means the da
ily update of H.15(519) available through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the worldwide website of the Boa
rd of Governors of the Federal Reserve System or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any successor site or publicatio
n.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Independent Investment Banker"
means the Reference Treasury Dealer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointed by Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Reference Treasury Dealer" mean
s Lehman Brothers Inc., and its successors;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that if the f
oregoing shall cease to be a primary U.S.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Government securities dealer in
New York City (a "Primary Treasury Dealer"),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor shall substitute therefor
another Primary Treasury Dealer.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Reference Treasury Dealer Quota
tion" means, with respect to the Reference
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasury Dealer and any redempti
on date, the average, as determined by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, of the bid and asked pr
ices for the Comparable Treasury Issue
centage of its principal amount) quoted in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing to the Trustee by the Re
ference Treasury Dealer at 5:00 p.m. on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third business day preceding suc
h redemption date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If, at the time notice of redemp
tion is given, the redemption moneys are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not held by the Trustee, the red
emption may be made subject to their receipt on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or before the date fixed for red
emption and such notice shall be of no effect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless such moneys are so receiv
ed.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon payment of the redemption p
rice, on and after the redemption date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest will cease to accrue on
the New Notes or portions thereof called for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAYMENT AND PAYING AGENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest on each New Note payabl
e on any interest payment date will be paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the person in whose name that
New Note is registered at the close of business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the regular record date for t
hat interest payment date. However, interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable at maturity will be paid
to the person to whom the principal is paid. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql there has been a default in the
payment of interest on any New Note, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defaulted interest may be paid t
o the holder of that New Note as of the close of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business on a date between 10 an
d 15 days before the date proposed by Oncor for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of such defaulted intere
st or in any other manner permitted by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities exchange on which tha
t New Note may be listed, if the Trustee finds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it workable. (Indenture, Section
307.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Principal, premium, if any, and
interest on the New Notes at maturity will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be payable upon presentation of
the New Notes at the corporate trust office of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Bank of New York, in The Cit
y of New York, as paying agent for Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql However, Oncor may choose to mak
e payment of interest by check mailed to the

to such payment. Oncor may change the place of
t one or more additional paying agents
paying agent, all at the discretion of Oncor.
registered, and New Notes may be exchanged
series or tranche, of authorized denominations
cipal amount, at the offices of the Trustee in
Section 305.) Oncor may designate one or more
place or places previously designated, for
hange of the New Notes. (Indenture, Section
made for any registration of transfer or
er, Oncor may require payment to cover any tax
t may be imposed in connection with such
ange. Oncor will not be required to execute or
transfer or exchange of
days before an interest payment date;
days before giving any notice of
edemption except the unredeemed portion of
art.
this heading and under "Issuance of
" and subject to the exceptions discussed under
", all Indenture Securities will be secured,
principal amount of 1983 Mortgage
address of the persons entitled

payment on the New Notes, appoin
(including Oncor) and remove any
(Indenture, Section 702.)
REGISTRATION AND TRANSFER
The transfer of New Notes may be
for other New Notes of the same
and with the same terms and prin
New York, New York. (Indenture,
additional places, or change the
registration of transfer and exc
702.) No service charge will be
exchange of the New Notes. Howev
or other governmental charge tha
registration of transfer or exch
to provide for the registration,
o
any New Note during the 15
any New Note during the 15
redemption; or
o
any New Note selected for r
any New Note being redeemed in p

SECURITY
Except as described below under
Additional Indenture Securities,
"Discharge of Lien; Release Date
equally and ratably, by:
(1) the first lien of an equal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds issued under the 1983 Mort

gage, and delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, and other Class A Bonds
as described below; as discussed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under "Description of the 1983 M
ortgage Bonds - Security," the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1983 Mortgage constitutes, subje
ct to certain exceptions, a
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first mortgage lien on substanti
ally all of Oncor's electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission and distribution pr
operties; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) the lien of the Indenture o
n substantially all of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tangible electric transmission a
nd distribution property located
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Texas, which lien is a first
lien on that property not covered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the 1983 Mortgage and is othe
rwise junior to the lien of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1983 Mortgage. If Oncor acquires
any property that is subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Class A Mortgage, the lien of
the Indenture would be junior to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the lien of that Class A Mortgag
e. Oncor sometimes refers to its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property that is subject to the
lien of the Indenture as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Mortgaged Property."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql See "Discharge of Lien; Release
Date" for a discussion of provisions of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture pursuant to which, sub
ject to the satisfaction of the specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions, the lien of the Inde
nture would be discharged and the Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities would become Oncor's
unsecured obligations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CLASS A BONDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As discussed below under "Consol
idation, Merger and Conveyance of Assets,"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will be permitted to merge
or consolidate with another company upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting specified requirements.
Following a merger or consolidation of another
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company into Oncor, Oncor could
deliver to the Trustee first mortgage bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued under an existing mortgag
e on the properties of such other company as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis for the issuance of additi
onal Indenture Securities. In such event, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities would be se

cured, additionally, by the first lien of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first mortgage bonds and by the
lien of the Indenture on the electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmission and distribution pr
operty acquired from such other company, which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would be junior to the lien of s
uch existing mortgage. The 1983 Mortgage and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such other mortgages are hereina
fter collectively referred to as the "Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgages," and all first mortga
ge bonds issued under the Class A Mortgages are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinafter collectively referre
d to as the "Class A Bonds." (Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1706.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Bonds, including 1983 Mo
rtgage Bonds, that are the basis for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and delivery of I
ndenture Securities (a) will be delivered to,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and registered in the name of, t
he Trustee or its nominee and will be owned and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by the Trustee, subject to
the provisions of the Indenture, for the benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the holders of all Indenture
Securities outstanding from time to time; (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will mature or be subject to man
datory redemption on the same dates, and in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same principal amounts, as such
Indenture Securities; and (c)(i) may, but need
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not, bear interest and (ii) may,
but need not, contain provisions for their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption at Oncor's option, an
y such redemption to be made at a redemption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price or prices not less than th
e principal amount of such Class A Bonds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Indenture, Sections 1602 and 17
01). To the extent that Class A Bonds do not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bear interest, holders of Indent
ure Securities will not have the benefit of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien of a Class A Mortgage in re
spect of an amount equal to accrued interest, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, on the Indenture Securities
; however, such holders will nevertheless have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the benefit of the lien of the I
ndenture in respect of the amount of accrued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any payment by Oncor of principa
l of or premium or interest on the Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds delivered to and held by t
he Trustee will be applied by the Trustee to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of any principal, premiu
m or interest, as the case may be, in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Indenture Securities which i
s then due. Oncor's obligation under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture to make such payment i
n respect of the Indenture Securities will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed satisfied and discharged
to the extent of such payment. If, at the time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any such payment of principal

of Class A Bonds, there is no principal then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due in respect of the Indenture
Securities, the proceeds of the payment will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute "Funded Cash" and wil
l be held by the Trustee as part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property, to be withdr
awn, used or applied as provided in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture. If, at the time of an
y such payment of premium or interest on Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds, there is no premium or in
terest then due on the Indenture Securities, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment will be remitted to Onco
r at Oncor's request; except that, if any event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of default under the Indenture,
as described below, has occurred and is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing, the payment will be
held as part of the Mortgaged Property until the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event of default under the Inden
ture has been cured or waived. (Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1702). See "Withdrawal o
f Cash" below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any payment by Oncor on Indentur
e Securities authenticated and delivered on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the basis of the delivery to the
Trustee of Class A Bonds (other than by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application of the proceeds of a
payment in respect of such Class A Bonds) will,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent thereof, be deemed
to satisfy and discharge Oncor's obligations,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, to make a corresponding
payment, in respect of such Class A Bonds which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is then due. (Indenture, Section
1702).
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee may not sell, assign
or otherwise transfer any Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except to a successor trustee un
der the Indenture. (Indenture, Section 1704.) At
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the time any Indenture Securitie
s which have been authenticated and delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the basis of Class A Bonds,
cease to be outstanding (other than as a result
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the application of the procee
ds of the payment or redemption of such Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds), the Trustee will surrend
er to Oncor, or upon Oncor's order, an equal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of such Class A
Bonds. (Indenture, Section 1703.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql When the aggregate principal amo
unt of all Class A Bonds outstanding under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Class A Mortgages, other tha
n those held by the Trustee, does not exceed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater of 5% of the net book va

lue of Oncor's Electric Utility Property or 5%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's Capitalization, then,
at Oncor's request and subject to satisfaction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of certain conditions, the Class
A Bonds held by the Trustee will be deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfied and discharged, the Tr
ustee will surrender such Class A Bonds for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation, and the New Notes
will become senior unsecured debt of Oncor,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to certain Permitted Sec
ured Debt and certain exceptions described
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below. (Indenture, Section 1811.
) See "Discharge of Lien; Release Date" below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At the date of this prospectus,
the only Class A Mortgage is the 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage, and the only Class A B
onds issuable at this time are 1983 Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds issuable under the 1983 Mo
rtgage. When all of the outstanding 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Bonds which are not hel
d by the Trustee do not exceed the greater of 5%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the net book value of Oncor's
Electric Utility Property or 5% of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capitalization, and assuming no
other Class A Mortgage exists at the time, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture may become unsecured.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Capitalization" means the total
of all the following items appearing on,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or included in, Oncor's unconsol
idated balance sheet; (i) liabilities for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness maturing more than
12 months from the date of determination, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) common stock, common stock
expense, accumulated other comprehensive income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or loss, preferred stock, prefer
ence stock, premium on common stock and retained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earnings (however the foregoing
may be designated), less, to the extent not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise deducted, the cost of
shares of Oncor's capital stock held in Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql treasury, if any. Capitalization
shall be determined in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally accepted accounting pr
inciples and practices applicable to the type of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business in which Oncor is engag
ed, and may be determined as of the date not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more than 60 days prior to the h
appening of the event for which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination is being made.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As of August 31, 2002, Oncor had
outstanding 1983 Mortgage Bonds, other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than those held by the Trustee,
in an aggregate principal amount equal to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately $1,886 million, or
32% of the net book value of Oncor's Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Utility Property and 31% of Onco
r's Capitalization. These 1983 Mortgage Bonds

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have different maturities and re
demption premiums. Some do not mature until
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2025, but all are redeemable on
or before July 1, 2005. In addition, Oncor may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase or defease any of these
1983 Mortgage Bonds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIEN OF THE INDENTURE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Indenture creates a lien on
substantially all tangible properties of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor in Texas used in the trans
mission and distribution of electric energy,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than certain excepted prop
erty and subject to certain permitted liens, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each case as described below. On
cor's transmission and distribution properties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the type subject to the lien
of the Indenture, regardless of whether the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Release Date has occurred, but e
xclusive of Excepted Property described below,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are sometimes referred to as "El
ectric Utility Property." At the date of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus, substantially all of
such property, while subject to the lien of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, is also subject to th
e prior lien of the 1983 Mortgage. For so long
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the 1983 Mortgage is in effec
t, and all of the outstanding 1983 Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds and any other Class A Bond
s, that are not held by the Trustee, exceed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater of 5% of the net book va
lue of Oncor's Electric Utility Property or 5%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's Capitalization, the I
ndenture Securities will have the benefit of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first mortgage lien of the 1983
Mortgage on such property, and also the benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the prior lien of any additio
nal Class A Mortgage on any property subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, to the extent of the ag
gregate principal amount of Class A Bonds,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued under the respective Clas
s A Mortgages, held by the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERMITTED LIENS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The lien of the Indenture is sub
ject to permitted liens described in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture. Such permitted liens
include liens existing at the execution date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Indenture such as the lien o
f the 1983 Mortgage, liens on property at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time Oncor acquires such propert
y such as the lien of any other Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage, tax liens and other go
vernmental charges which are not delinquent or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are being contested in goo
d faith, mechanics', construction and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materialmen's liens, certain jud
gment liens, easements, reservations and rights

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of others (including governmenta
l entities) in, and defects of title in, Oncor's
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property, certain leases and lea
sehold interests, liens to secure public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations, rights of others to
take minerals, timber, electric energy or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacity, gas, water, steam or o
ther products produced by Oncor or by others on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's property, rights and int
erests of Persons other than Oncor arising out
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of agreements relating to the co
mmon ownership or joint use of property, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liens on the interests of such P
ersons in such property, liens which have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonded or for which other securi
ty arrangements have been made, liens created in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the issuance of
tax-exempt bonds, purchase money liens and liens
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related to the construction or a
cquisition of property, or the development or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expansion of property, liens whi
ch secure specified Indenture Securities equally
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and ratably with other obligatio
ns, and additional liens on any of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property (other than Excepted Pr
operty, as described below) to secure debt for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql borrowed money in an aggregate p
rincipal amount not exceeding the greater of 10%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's Net Tangible Assets o
r 10% of Oncor's Capitalization. (Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Granting Clauses and Sections 10
1 and 707.)
Trustee will have a lien, prior to the lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on behalf of the holders of Inde
nture Securities, upon the Mortgaged Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the payment of its reasonabl
e compensation and expenses and for indemnity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against certain liabilities. (In
denture, Section 1007.) Any such lien would be a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Permitted Lien under the Indentu
re.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCEPTED PROPERTY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The lien of the Indenture does n
ot cover, among other things, the following
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql types of property: property loca
ted outside of Texas; cash and securities not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid, deposited or held under th
e Indenture; contracts, leases and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements of all kinds, contrac
t rights, bills, notes and other instruments,

property, claims, demands and judgments;
permits, franchises, consents and allowances;
other general intangibles; vehicles, movable
all goods, stock in trade, wares, merchandise
ease in the ordinary course of business;
nd other personal property consumable in the
rty; fuel; tools and equipment; furniture and
processing, telecommunications and other
ministrative or clerical purposes or otherwise
or maintenance of electric transmission and
ignite, ore, gas, oil and other minerals and
gas, steam, water and other products generated,
d or otherwise acquired; real property and
e production or gathering of natural gas;
y which prior to the execution date of the
the lien of the 1983 Mortgage; all property
n date of the Indenture has been released from
ny and all property not acquired or constructed
transmission and distribution business. Oncor
Oncor not covered by the lien of the Indenture
re, Granting Clauses.)
l indentures with the Trustee, without the
to subject additional property (including
excepted from such lien) to the lien of the
301.) This property would constitute Property
as a basis for the issuance of Indenture
itional Indenture Securities."
r-acquired property (other than Excepted
accounts receivable, transition

governmental and other licenses,
intellectual property rights and
equipment, aircraft and vessels;
and inventory held for sale or l
materials, supplies, inventory a
operation of the Mortgaged Prope
furnishings; computers and data
facilities used primarily for ad
not necessary for the operation
distribution facilities; coal, l
timber rights; electric energy,
produced, manufactured, purchase
facilities used primarily for th
leasehold interests; all propert
Indenture has been released from
which subsequent to the executio
the lien of the Indenture; and a
by Oncor for use in its electric
sometimes refers to property of
as "Excepted Property." (Indentu
Oncor may enter into supplementa
consent of the holders, in order
property that would otherwise be
Indenture. (Indenture, Section 1
Additions and would be available
Securities. See "Issuance of Add
The Indenture provides that afte
Property) will be subject to the
lien of the Indenture. (Indenture, Second

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Granting Clause.) However, in th
e case of consolidation or merger (whether or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not Oncor is the surviving compa
ny) or transfer of the Mortgaged Property as or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantially as an entirety, th
e Indenture will not be required to be a lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon any of the properties eithe
r owned or subsequently acquired by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor company except propert
ies acquired from Oncor in or as a result of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such transfer, as well as improv
ements, extensions and additions (as defined in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Indenture) to such propertie
s and renewals, replacements and substitutions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of or for any part or parts ther
eof. (Indenture, Section 1203) See
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Consolidation, Merger and Conve
yance of Assets" below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql See "Discharge of Lien; Release
Date" for a discussion of provisions of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture pursuant to which, sub
ject to the satisfaction of specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions, all the Mortgaged Pr
operty would be released from the lien of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and Indenture Securiti
es would become Oncor's unsecured obligations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISSUANCE OF ADDITIONAL INDENTURE
SECURITIES
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the issuance restrict
ions described below, the maximum principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of Indenture Securities t
hat may be authenticated and delivered under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture is unlimited. (Indentu
re, Section 301.) Prior to the Release Date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities of any seri
es may be issued from time to time on the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, and in an aggregate principa
l amount not exceeding:
the aggregate principal amo
unt of Class A Bonds delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee; (Indenture, Section 160
2.)
the Cost or Fair Value to O
ncor (whichever is less) of Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Additions (as described below) w
hich do not constitute Funded Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (generally, Property Additions w
hich have been made the basis of the
ndenture Securities, the release of

awal of cash, which have been
roperty or which have been used for
certain deductions and additions,
to offset property retirements;
unt of retired Indenture Securities, but if
basis for the authentication and
re Securities, only after the
Mortgage; or (Indenture, Section
with the Trustee. (Indenture,
lude any property that is owned by Oncor
e Indenture. (Indenture, Section 103.)
lease Date, it will issue Indenture
s of Class A Bonds issued under the 1983
right to issue additional Indenture Securities
ns, retired Indenture Securities and cash
f Class A Bonds issued under the 1983 Mortgage.
the Indenture has occurred and is
release from the lien of the Indenture of any
ash held by the Trustee, upon delivery to the
al to the amount, if any, by which the Cost of
if less, the Fair Value to Oncor of such
unded Property) exceeds the aggregate of:
egate principal amount of obligations
upon the property to be released and
Mortgaged Property or the withdr

substituted for retired Funded P
other specified purposes) after
primarily including adjustments
o
Class A Bonds had been made the

delivery of such retired Indentu
discharge of the related Class A
1604.)
o
an amount of cash deposited
Section 1605.)
Property Additions generally inc
and is subject to the lien of th
Oncor expects that, until the Re
Securities primarily on the basi
Mortgage. However, Oncor has the
on the basis of property additio
deposits, and not on the basis o
RELEASE OF PROPERTY
Unless an event of default under
continuing, Oncor may obtain the
Mortgaged Property, except for c
Trustee of an amount in cash equ
the property to be released (or,
property at the time it became F
o
an amount equal to the aggr
secured by Purchase Money Liens
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to the Trustee;

an amount equal to the Cost
or Fair Value to Oncor (whichever is less)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of certified Property Additions
not constituting Funded Property after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain deductions and additions
, primarily including adjustments to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offset property retirements (exc
ept that such adjustments need not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made if such Property Additions
were acquired or made within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 90-day period preceding the rele
ase);
unt of Indenture Securities Oncor would be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to issue on the basis o
f retired Indenture Securities (with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such entitlement being waived by
operation of such release);
any amount of cash and/or a
n amount equal to the aggregate principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of obligations secured by
Purchase Money Liens upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property released delivered to t
he trustee or other holder of a lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the lien of the Indentu
re, subject to certain limitations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described below;
unt of Indenture Securities delivered to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee (with such Indenture
Securities to be canceled by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee); and
any taxes and expenses inci
dental to any sale, exchange, dedication or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other disposition of the propert
y to be released.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Indenture, Section 1803.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property that is not Funded Prop
erty may generally be released from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien of the Indenture without de
positing any cash or property with the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as long as (a) the aggregate amo
unt of Cost or Fair Value to Oncor (whichever is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less) of all Property Additions
which do not constitute Funded Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (excluding the property to be re
leased) after certain deductions and additions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql primarily including adjustments
to offset property retirements, is not less than
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql zero or (b) the Cost or Fair Val
ue (whichever is less) of property to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql released does not exceed the agg
regate amount of the Cost or Fair Value to Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (whichever is less) of Property
Additions acquired or made within the 90-day
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period preceding the release. (I
ndenture, Section 1804.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Indenture provides simplifie
d procedures for the release of property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which has been released from the
lien of a Class A Mortgage, minor properties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and property taken by eminent do
main, and provides for dispositions of certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obsolete property and grants or
surrender of certain rights without any release
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or consent by the Trustee. (Inde
nture Sections 1802, 1805, 1807 and 1808.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If Oncor retains any interest in
any property released from the lien of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, the Indenture will no
t become a lien on such property or such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest therein or any improvem
ents, extensions or additions to such property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or renewals, replacements or sub
stitutions of or for such property or any part
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or parts thereof. (Indenture, Se
ction 1810.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITHDRAWAL OF CASH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless an event of default under
the Indenture has occurred and is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing, and subject to certa
in limitations, cash held by the Trustee may,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally, (1) be withdrawn by O
ncor (a) to the extent of the Cost or Fair Value
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Oncor (whichever is less) of
Property Additions not constituting Funded
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, after certain deductio
ns and additions, primarily including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustments to offset retirement
s (except that such adjustments need not be made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if such Property Additions were
acquired or made within the 90-day period
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding the withdrawal) or (b)
in an amount equal to the aggregate principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of Indenture Securities t
hat Oncor would be entitled to issue on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis of retired Indenture Secur
ities (with the entitlement to such issuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql being waived by operation of suc
h withdrawal) or (c) in an amount equal to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount of an
y outstanding Indenture Securities delivered to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee, or (2) upon Oncor's

request, be applied to (a) the purchase of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities or (b) the
payment (or provision for payment) at stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity of any Indenture Securi
ties or the redemption (or provision for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment) of any Indenture Securi
ties which are redeemable (Indenture, Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1806); except that cash deposite
d with the Trustee as the basis for the
ndenture Securities, as well as cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representing a payment of princi
pal of Class A Bonds, may, in addition, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawn in an amount equal to
the aggregate principal amount of Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to the Trustee. (Inden
ture, Sections 1605 and 1702.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DISCHARGE OF LIEN; RELEASE DATE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At any time when the aggregate p
rincipal amount of all Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding under all Class A Mo
rtgages, other than those held by the Trustee,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not exceed the greater of 5
% of the net book value of Oncor's Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Utility Property or 5% of Oncor'
s Capitalization, the Indenture may be amended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and supplemented, without the co
nsent of the holders of New Notes or any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities (including
any Remaining Old Notes), to eliminate all terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and conditions relating to colla
teral for the Indenture Securities, with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result that Oncor's obligations
under the Indenture and the Indenture Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including the New Notes) would
be entirely unsecured. Oncor refers to the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on which the elimination of coll
ateral occurs as the "Release Date."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The occurrence of the Release Da
te is subject to Oncor's delivery of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following documents to the Trust
ee:
a company order requesting
execution and delivery by the Trustee of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indenture and other
instruments necessary to discharge,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancel, terminate or satisfy the
lien of the Indenture;
an officer's certificate st
ating that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) to the knowledge of such of
ficer, no event of default under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture has occurred and is co
ntinuing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) the aggregate principal amo
unt of all Class A Bonds outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under all Class A Mortgages, oth
er than those held by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, does not exceed the gre
ater of 5% of the net book value
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor's Electric Utility Prop
erty or 5% of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capitalization; and
an opinion of counsel to th
e effect that none of Oncor's Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Utility Property, other than Exc
epted Property, is subject to any lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than the lien of the Inden
ture and Permitted Liens.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the execution and delivery
of the amendment of the Indenture as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated above, the lien of
the Indenture will be deemed to have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfied and discharged and the
Trustee will release the Mortgaged Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the lien of the Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIMITATION ON SECURED DEBT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql So long as any of the Indenture
Securities remain outstanding, Oncor will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not issue any Secured Debt other
than Permitted Secured Debt (in each case as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined below) without the conse
nt of the holders of a majority in principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the outstanding Indent
ure Securities of all series with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which this covenant is made, con
sidered as one class; provided, however, that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this covenant will not prohibit
the creation or existence of any Secured Debt if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either:
Oncor makes effective provi
sion whereby all New Notes and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected Indenture Securities th
en outstanding will be secured equally
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and ratably with such Secured De
bt or
Oncor delivers to the Trust
ee bonds, notes or other evidences of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness secured by the lien
which secures such Secured Debt in an
to the aggregate principal amount of
Indenture Securities then outstanding
ements set forth in the Indenture.
d, issued, incurred or assumed by Oncor
any of Oncor's property (other than Excepted
covenant, any Capitalized Lease Liabilities of
secured by a lien on Oncor's property.
rrowed money evidenced by a bond,
instrument or agreement by which
borrowed money;
y such indebtedness of another person; and
lities of Oncor.
ther things:
allment sale or conditional sale agreement
to indebtedness for the deferred
rvices;
uding any obligations under power or other
d any associated hedges or
s in the ordinary course of business;
agreement that are not Capitalized Lease
ness, neither assumed nor guaranteed by
y pays interest, existing upon real
to real estate acquired by Oncor for
ransportation line, distribution line
aggregate principal amount equal

the New Notes and other affected
and meeting certain other requir
"Secured Debt" means Debt create
which is secured by a lien upon
Property). For purposes of this
Oncor will be deemed to be Debt
"Debt" means:
o
Oncor's indebtedness for bo
debenture, note or other written

Oncor is obligated to repay such
o
any guaranty by Oncor of an
any Capitalized Lease Liabi
"Debt" does not include, among o

o
indebtedness under any inst
or any other agreement relating

purchase price of property or se
o
any trade obligations (incl
commodity purchase agreements an

derivatives) or other obligation
o
obligations under any lease
Liabilities; or
o
any liens securing indebted
Oncor nor on which it customaril

estate or rights in or relating
substation, transmission line, t
as of any particular time:
Securities issued prior to the Release
less than one year from the date of the
t extendible at the option of the
nancings and/or replacements of any
ured Debt that matures less than one
ding, refinancing and/or replacement
ion of the issuer;
chase Money Liens or any other liens
at the time of, or within one hundred
uisition thereof by Oncor, and any
replacements of any such Secured Debt;
Purchase Money Lien or other Lien
Oncor's property other than (1) the
ments, extensions and additions to
\page
acements and substitutions of or for
s of the property and (2) with respect
roperty subsequently acquired by
vernmental obligations the interest on
ncome for purposes of federal income
of the Internal Revenue Code of 1986,
vision of law), for the purpose of
le or in part, costs of acquisition or
or right of way purposes.

"Permitted Secured Debt" means,
o
Class A Bonds and Indenture
Date;
o
Secured Debt which matures
issuance or incurrence and is no

issuer; and any refundings, refi
such Secured Debt by or with Sec
year from the date of such refun
and is not extendible at the opt
o
Secured Debt secured by Pur
existing or placed upon property

eighty (180) days after, the acq
refundings, refinancings and/or
provided, however, that no such
shall extend to or cover any of
property so acquired and improve
53
such property and renewals, repl

the property or any part or part
to Purchase Money Liens, other p
Oncor;
o
Secured Debt relating to go
which is not included in gross i

taxation pursuant to Section 103
as amended (or any successor pro
financing or refinancing, in who
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction of property to be u

sed by Oncor, to the extent that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien which secures the Secured D
ebt is required either by applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law or by the issuer of such gov
ernmental obligations or is otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary in order to establish
or maintain the exclusion from gross
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income; and any refundings, refi
nancings and/or replacements of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Debt by or with similar
Secured Debt;
Secured Debt (i) which is r
elated to the construction or acquisition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of property not previously owned
by Oncor or (ii) which is related to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the financing of a project invol
ving the development or expansion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's property and (iii) in ei
ther case, the obligee in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which has no recourse to Oncor o
r any of Oncor's property other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the property constructed or acqu
ired with the proceeds of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction or the project finan
ced with the proceeds of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction (or the proceeds of
such property or such project); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any refundings, refinancings and
/or replacements of any such Secured
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debt by or with Secured Debt des
cribed in clause (iii) above; and
in addition to the Permitte
d Secured Debt described above, Secured
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debt not otherwise so permitted
in an aggregate principal amount not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceeding the greater of 10% of
Oncor's Net Tangible Assets or 10% of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's Capitalization.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Net Tangible Assets" means the
amount shown as total assets on Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unconsolidated balance sheet, le
ss (i) intangible assets including, but without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, such items as goodwi
ll, trademarks, trade names, patents,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unamortized debt discount and ex
pense and other regulatory assets carried as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets on Oncor's unconsolidated
balance sheet and (ii) appropriate adjustments,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, on account of minority i
nterests. Net Tangible Assets shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined in accordance with ge
nerally accepted accounting principles and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practices applicable to the type
of business in which Oncor is engaged.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Capitalized Lease Liabilities"
means the amount, if any, shown as

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities on Oncor's unconsoli
dated balance sheet for capitalized leases of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electric transmission and distri
bution property not owned by Oncor, which amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be determined in accordanc
e with generally accepted accounting principles
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and practices applicable to the
type of business in which Oncor is engaged.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFEASANCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will be discharged from it
s obligations on the New Notes of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular series if it irrevoca
bly deposits with the Trustee or any paying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agent, other than Oncor, suffici
ent cash or government securities to pay the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal, interest, any premium
and any other sums when due on the stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity date or a redemption da
te of that series of New Notes. (Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSOLIDATION, MERGER AND CONVEY
ANCE OF ASSETS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Under the terms of the Indenture
, Oncor may not consolidate with or merge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into any other entity or convey,
transfer or lease as or substantially as an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entirety to any entity its Elect
ric Utility Property, unless:
the surviving or successor
entity, or an entity which acquires by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance or transfer or which
leases the Electric Utility Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor as or substantially as,
an entirety, is organized and validly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql existing under the laws of any d
omestic jurisdiction and it expressly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assumes Oncor's obligations on a
ll Indenture Securities then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding under the Indenture
and if such consolidation, merger,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance, sale or other transf
er occurs prior to the Release Date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confirms the lien of the Indentu
re on the Mortgaged Property;
in the case of a lease, suc
h lease is made expressly subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination by Oncor or by the T
rustee and by the purchaser of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property so leased at any sale t
hereof at any time during the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuance of an event of defau
lt under the Indenture;

\page
to the Trustee an officer's certificate and
d in the Indenture; and
fect to the transaction, no event of
event which, after notice or lapse of
ent of default under the Indenture,
nuing.
e case of the conveyance or other transfer of
or substantially as an entirety to any other
all the conditions described above Oncor would
all obligations under the Indenture and on the
nding unless Oncor elects to waive such release
on 1204.)
r restrict:
nsfer, or lease, of any part of Oncor's
does not constitute the entirety, or
eof or (Indenture, Section 1205.)
lease of any of Oncor's properties where
roperty with a fair value in excess of
amount of all outstanding Indenture
nding debt securities that rank
Indenture Securities with respect to
other than any Class A Bonds held by
l be determined within 90 days of the
an independent expert that Oncor
54
Oncor shall have delivered
an opinion of counsel as provide

o
immediately after giving ef
default under the Indenture, or

time or both, would become an ev
shall have occurred and be conti
(Indenture, Section 1201.) In th
the Electric Utility Property as
person, upon the satisfaction of
be released and discharged from
Indenture Securities then outsta
and discharge. (Indenture, Secti
The Indenture does not prevent o
o
any conveyance or other tra
Electric Utility Property which

substantially the entirety, ther
o
any conveyance, transfer or
Oncor retains Electric Utility P

143% of the aggregate principal
Securities, and any other outsta
equally with, or senior to, the
such Electric Utility Property,
the Trustee. This fair value wil
conveyance, transfer or lease by
the Trustee. (Indenture,
t restrict Oncor in a merger in which Oncor
ure, Section 1205.)
the Indenture with respect to Indenture
lowing:
any Indenture Security for 30 days after it
l of or any premium on any Indenture
r covenant in the Indenture that continues
written notice from the Trustee, or
written notice from the holders of at
amount of the outstanding Indenture
vency or reorganization of Oncor specified
s any outstanding Class A Bonds which were
uthentication and delivery of
, the occurrence of a matured event of
A Mortgage (other than any such
i) is not a failure to make payments
imilar kind or character to the event
bankruptcy, insolvency or
e and (ii) has not resulted in the
Class A Bonds under such Class A
at the waiver or cure of such event of
will constitute a waiver and cure of
selects and that is approved by

Section 1206.)
The terms of the Indenture do no
is the surviving entity. (Indent
EVENTS OF DEFAULT
"Event of default," when used in
Securities, means any of the fol
o
failure to pay interest on
is due;
o
failure to pay the principa
Security when due;

o
failure to perform any othe
for 90 days after Oncor receives

Oncor and the Trustee receive a
least 33% in aggregate principal
Securities;
o
events of bankruptcy, insol
in the Indenture;
o
as long as the Trustee hold
delivered as the basis for the a

outstanding Indenture Securities
default under the related Class
matured event of default which (
on Class A Bonds and is not of s
of default relating to events of
reorganization, referred to abov
acceleration of the outstanding
Mortgage); provided, however, th
default under a Class A Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the corresponding event of defau

lt under the Indenture, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rescission and annulment of the
consequences thereof will constitute a
corresponding consequences under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture; or
any other event of default
included in any supplemental indenture or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer's certificate for that s
eries of Indenture Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Indenture, Sections 901 and 130
1.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REMEDIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If an event of default under the
Indenture occurs and is continuing, then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee or the holders of at
least 33% in aggregate principal amount of the
may declare the principal amount of all of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities to be due a
nd payable immediately.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At any time after a declaration
of acceleration has been made and before a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql judgment or decree for payment o
f the money due has been obtained by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, the event of default un
der the Indenture giving rise to the declaration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of acceleration will be consider
ed cured, and the declaration and its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consequences will be considered
rescinded and annulled, if:
Oncor has paid or deposited
with the Trustee a sum sufficient to pay:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) all overdue interest on all
outstanding Indenture Securities;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) the principal of and premiu
m, if any, on the outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities that have b
ecome due otherwise than by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declaration of acceleration and
overdue interest thereon;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) interest on overdue interes
t to the extent lawful; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) all amounts due to the Trus
tee under the Indenture; and

Any other event of default
under the Indenture with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities of that ser
ies has been cured or waived as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in the Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There is no automatic accelerati
on, even in the event of bankruptcy,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insolvency or reorganization of
Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the Indenture, under
certain circumstances and to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted by law, if an event of
default under the Indenture occurs and is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing prior to the Release
Date, the Trustee has the power to appoint a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receiver of the Mortgaged Proper
ty, and is entitled to all other remedies
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available to mortgagees and secu
red parties under the Uniform Commercial Code or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other applicable law. (Inden
ture, Section 917.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the occurrence and continua
nce of an event of default under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture after the Release Date
, the remedies of the Trustee and the holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Indenture would be lim
ited to the rights of unsecured creditors.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition to every other right
and remedy provided in the Indenture, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee may exercise any right o
r remedy available to the Trustee in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacity as owner and holder of
Class A Bonds which arises as a result of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql default or matured event of defa
ult under any Class A Mortgage, whether or not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an event of default under the In
denture has occurred and is continuing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, Section 916.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other than its duties in case of
an event of default under the Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee is not obligated to
exercise any of its rights or powers under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture at the request, order
or direction of any of the holders, unless the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders offer the Trustee a reas
onable indemnity. (Indenture, Section 1003.) If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql they provide this reasonable ind
emnity, the holders of a majority in principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the outstanding Indent
ure Securities will have the right to direct the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, method and place of conduc
ting any proceeding for any remedy available to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee, or exercising any p
ower conferred upon the Trustee. The Trustee is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not obligated to comply with dir
ections that conflict with law or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Indenture. (In
denture, Section 912.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No holder of Indenture Securitie
s will have any right to institute any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding under the Indenture,
or any remedy under the Indenture, unless:
the holder has previously g
iven to the Trustee written notice of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing event of default unde
r the Indenture;
the holders of a majority i
n aggregate principal amount of the
of all series have made a written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request to the Trustee, and have
offered reasonable indemnity to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee to institute proceedings
; and
the Trustee has failed to i
nstitute any proceeding for 60 days after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice and has not received duri
ng such period any direction from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of a majority in aggrega
te principal amount of the outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities, inconsiste
nt with the written request of holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to above.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Indenture, Section 907.) Howeve
r, these limitations do not apply to a suit by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of an Indenture Security
for payment of the principal, premium, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or interest on the Indenture Sec
urity on or after the applicable due date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will provide to the Truste
e an annual statement by an appropriate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer as to Oncor's compliance
with all conditions and covenants under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture. (Indenture, Section 7
05.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MODIFICATION AND WAIVER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Without the consent of any holde
r of Indenture Securities, Oncor and the

re supplemental indentures for any of the
by any permitted successor of the covenants
the Indenture Securities;
s or other provisions for the benefit of
or tranche of Indenture Securities,
er conferred upon Oncor;
default under the Indenture for all or any
dd any provision to the Indenture;
will adversely affect the interests
rities of any series in any material
or addition will become effective
ders of Indenture Securities of such
rdance with the Indenture or
s of the affected series remain
ity for any Indenture Securities;
rms of Indenture Securities of any other
ture;
cation and delivery of bearer securities
the acceptance of appointment by a
co-trustee;
es required for use of a noncertificated
Trustee may enter into one or mo

following purposes:
o
to evidence the assumption
of Oncor in the Indenture and in

o
to add one or more covenant
the holders of all or any series

or to surrender any right or pow
o
to add additional events of
series of Indenture Securities;

o
to change or eliminate or a
provided, however, if the change

of the holders of Indenture Secu
respect, the change, elimination
only:
(1) when the consent of the hol
series has been obtained in acco
(2) when no Indenture Securitie
outstanding under the Indenture;
o
to provide additional secur
to establish the form or te
series as permitted by the Inden

o
to provide for the authenti
with or without coupons;

o
to evidence and provide for
separate or successor Trustee or

o
to provide for the procedur
system of registration for the I
ndenture Securities of all or any

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series;
to change any place where p
rincipal, premium, if any, and interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be payable, Indenture Secu
rities may be surrendered for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration of transfer or exch
ange and notices to Oncor may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql served;
to amend and restate the In
denture as originally executed and as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended from time to time, with
such additions, deletions and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changes that do not adversely af
fect the interests of the holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities of any seri
es in any material respect;
to cure any ambiguity or in
consistency; or
after the Release Date, to
amend the Indenture to eliminate any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions related to the lien o
f the Indenture, Mortgaged Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Class A Bonds which are no l
onger applicable.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The holders of at least a majori
ty in aggregate principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Securities of all seri
es then outstanding may waive compliance by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor with some restrictive prov
isions of the Indenture. (Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 706.) The holders of not
less than a majority in principal amount of the
may waive any past default under the Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except a default in the payment
of principal, premium, if any, or interest and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain covenants and provisions
of the Indenture that cannot be modified or be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended without the consent of t
he holder of each outstanding Indenture Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any series affected. (Indentu
re, Section 913.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The consent of the holders of a
majority in aggregate principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Indenture Securities of all
series then outstanding, considered as one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql class, is required for all other
modifications to the Indenture. However, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than all of the series of I
ndenture Securities outstanding are directly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected by a proposed supplemen
tal indenture, then the consent only of the

\page
te principal amount of the outstanding Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of all series that ar
e directly affected, considered as one class,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be required. No such amendm
ent or modification may without the consent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all the Holders of the Indenture
Securities of all series then outstanding:
change the stated maturity
of the principal of, or any installment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal of or interest on, any
debt security, or reduce the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of any Indentur
e Security or its rate of interest or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change the method of calculating
that interest rate or reduce any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premium payable upon redemption,
or change the currency in which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments are made, or impair the
right to institute suit for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement of any payment on or
after the stated maturity of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Security;
create any lien ranking pri
or to the lien of the Indenture with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to more than 10% of the
Mortgaged Property or, except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in the Indenture in con
nection with the Release Date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate the lien of the Indent
ure on more than 10% of the Mortgaged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property or deprive any holder o
f the benefits of the security of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien of the Indenture;
reduce the percentage in pr
incipal amount of the outstanding Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series the con
sent of the holders of which is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required for any supplemental in
denture or any waiver of compliance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a provision of the Indentur
e or any default thereunder and its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consequences, or reduce the requ
irements for quorum or voting; or
modify some of the provisio
ns of the Indenture relating to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indentures, waivers
of some covenants and waivers of past
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defaults with respect to the Ind
enture Securities of any series.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A supplemental indenture that ch
anges the Indenture solely for the benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of one or more particular series
of Indenture Securities, or modifies the rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the holders of Indenture Secu
rities of one or more series, will not affect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rights under the Indenture o
f the holders of the Indenture Securities of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other series. (Indenture, Sectio
n 1302.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Indenture provides that Inde
nture Securities owned by Oncor or anyone
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql else required to make payment on
the Indenture Securities shall be disregarded
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and considered not to be outstan
ding in determining whether the required holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have given a request or consent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor may fix in advance a recor
d date to determine the required number of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders entitled to give any req
uest, demand, authorization, direction, notice,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent, waiver or other such ac
t of the holders, but Oncor shall have no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to do so. If Oncor fi
xes a record date, that request, demand,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorization, direction, notice
, consent, waiver or other act of the holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be given before or after tha
t record date, but only the holders of record at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the close of business on that re
cord date will be considered holders for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of determining whether
holders of the required percentage of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding New Notes (and the R
emaining Old Notes) have authorized or agreed or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consented to the request, demand
, authorization, direction, notice, consent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver or other act of the holde
rs. For that purpose, the outstanding New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (and the Remaining Old Notes) sh
all be computed as of the record date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any request, demand, authorizati
on, direction, notice, consent, election,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver or other act of a holder
of any Indenture Security will bind every future
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of that Indenture Securit
y and the holder of every Indenture Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued upon the registration of
transfer of or in exchange for that Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security. A transferee will also
be bound by acts of the Trustee or Oncor in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reliance thereon, whether or not
notation of that action is made upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Security. (Indenture,
Section 106.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VOTING OF CLASS A BONDS
Trustee will, as holder of Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered as the basis for the i
ssuance of Indenture Securities, attend such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meetings of bondholders under th
e related Class A Mortgage, or deliver its proxy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection therewith, as rela
te to matters with respect to which it, as such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder, is entitled to vote or c
onsent. The Indenture provides that, so long as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no event of default under the In
denture has occurred and is continuing, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee will, as holder of such
Class A Bonds, vote or consent (without any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent or other action by the h
olders of the Indenture Securities, except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in the proviso of para
graph (4) below) in favor of any amendments or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modifications to the Class A Mor
tgage of substantially the same tenor and effect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as follows:
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) to modify the 1983 Mortgage
to allow Oncor to issue 1983 Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds up to 70% of the lower of
(a) the fair value to Oncor of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the property subject to the lien
of the 1983 Mortgage (1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property) as of a valu
ation date specified by Oncor and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the cost of the 1983 Mortgag
ed Property as of such valuation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) to make certain technical a
mendments to the 1983 Mortgage;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) to conform any provision of
a Class A Mortgage in all material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respects to the correlative prov
ision of the Indenture, to add to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Class A Mortgage any provision
not otherwise contained therein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which conforms in all material r
espects to a provision contained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Indenture, to delete from
a Class A Mortgage any provision
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which the Indenture contains
no correlative provision and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combination of the foregoing; an
d/or
nts or modifications to any Class A
ents or modifications referred to
, vote all such Class A Bonds
tgage, or consent with respect
e vote or consent of holders of
ing under such Class A Mortgage
e to vote or consent, as
ered by the trustee under such
ver, that the Trustee will not
any amendment or modification of
were an amendment or modification
the consent of holders of
d under "Modification and
nt of holders of Indenture
ed for such an amendment or
Indenture, Section 1705.)
ription of the 1983 Mortgage Bonds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
ake amendments to, or eliminate certain
with the consent of the holders of 60% of the
issued under the 1983 Mortgage. A holder of
nger benefit from such covenants contained in
stee vote these 1983 Mortgage Bonds to amend or
ibed above. Upon the issuance of the Old Notes,
5% of the outstanding 1983 Mortgage Bonds, and
ee holds approximately 39% of the outstanding
me by giving written notice to Oncor or may
the holders of a majority in principal amount
(4) with respect to any amendme

Mortgage other than those amendm
in clauses (1) through (3) above
delivered under such Class A Mor
thereto, proportionately with th
all other Class A Bonds outstand
the holders of which are eligibl
evidenced by a certificate deliv
Class A Mortgage; provided, howe
vote in favor of, or consent to,
a Class A Mortgage which, if it
of the Indenture, would require
Indenture Securities as describe
Waiver," without the prior conse
Securities which would be requir
modification of the Indenture. (
As described more fully in "Desc
Modification" below, Oncor may m
covenants in, the 1983 Mortgage
outstanding 1983 Mortgage Bonds
Indenture Securities would no lo
the 1983 Mortgage should the Tru
eliminate the covenants as descr
the Trustee held approximately 3
as of August 31, 2002, the Trust
1983 Mortgage Bonds.
RESIGNATION OF A TRUSTEE
The Trustee may resign at any ti
be removed at any time by act of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of all series of Indenture Secur

ities then outstanding delivered to the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Oncor. No resignation or rem
oval of the Trustee and no appointment of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor trustee will be effect
ive until the acceptance of appointment by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor trustee. So long as no
event of default or event which, after notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or lapse of time, or both, would
become an event of default has occurred and is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing and except with respe
ct to a trustee appointed by act of the holders,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if Oncor has delivered to the Tr
ustee a resolution of its Board of Directors
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointing a successor trustee a
nd such successor has accepted the appointment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with the terms of
the Indenture, the Trustee will be deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have resigned and the successor
will be deemed to have been appointed as trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with the Indenture
. (Indenture, Section 1010.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTICES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notices to holders of New Notes
will be given by mail to the addresses of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such holders as they may appear
in the security register for New Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TITLE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor, the Trustee, and any agen
t of Oncor or the Trustee, may treat the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person in whose name New Notes a
re registered as the absolute owner thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not the New Notes may
be overdue, for the purpose of making payments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and for all other purposes irres
pective of notice to the contrary. (Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GOVERNING LAW
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Indenture and the New Notes
will be governed by, and construed in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with, the laws of the
State of New York except where otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by law. (Indenture, Sec
tion 114.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION ABOUT THE TRUSTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee under the Indenture
is The Bank of New York. In addition to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acting as Trustee, The Bank of N
ew York also acts as the Mortgage Trustee. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bank of New York also acts, and
may act, as trustee under various other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indentures, trusts and guarantee
s of Oncor and its affiliates. The Bank of New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York will also act as the Exchan
ge Agent. Oncor and its affiliates maintain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposit accounts and credit and
liquidity facilities and conduct other banking
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transactions with the trustee in
the ordinary course of their businesses.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BOOK-ENTRY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The certificates representing th
e New Notes will be issued in fully
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered form, without coupons
. The New Notes will be deposited with, or on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf of, DTC, and registered i
n the name of Cede & Co., as DTC's nominee in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the form of one or more global c
ertificates or will remain in the custody of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee pursuant to a FAST Balan
ce Certificate Agreement between DTC and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee. Upon the issuance of th
e global certificates, DTC or its custodian will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit, on its internal system,
the respective principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individual beneficial interests
represented by such global certificates to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounts of persons who have acc
ounts with such depositary. Ownership of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficial interests in a global
certificate will be limited to persons who have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounts with DTC (participants)
or persons who hold interests through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants. Ownership of benef
icial interests in a global certificate will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shown on, and the transfer of th
at ownership will be effected only through,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql records maintained by DTC or its
nominee (with respect to interests of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants) and the records of
participants (with respect to interests of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons other than participants)
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql So long as DTC, or its nominee,
is the registered owner or holder of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql global certificate, DTC or such
nominee, as the case may be, will be considered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sole owner or holder of the
New Notes represented by such global certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for all purposes under the Inden
ture and the New Notes. No beneficial owner of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an interest in a global certific
ate will be able to transfer the interest except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with DTC's applica
ble procedures, in addition to those provided

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for under the Indenture and, if
applicable, those of Euroclear and Clearstream
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Banking.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments of the principal of and
interest on a global certificate will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made to DTC or its nominee, as t
he case may be, as the registered owner thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither Oncor, the Trustee nor a
ny paying agent will have any responsibility or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability for any aspect of the
records relating to or payments made on account
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of beneficial ownership interest
s in a global certificate or for maintaining,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supervising or reviewing any rec
ords relating to such beneficial ownership
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests. DTC or its nominee, u
pon receipt of any payment of principal or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in respect of a global
certificate, will credit participants' accounts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with payments in amounts proport
ionate to their respective beneficial interests
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the principal amount of such
global certificate as shown on the records of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC or its nominee. Oncor also e
xpects that payments by participants to owners
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of beneficial interests in such
global certificate held through such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants will be governed by
standing instructions and customary practices,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as is now the case with securiti
es held for the accounts of customers registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the names of nominees for suc
h customers. Such payments will be the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibility of such participa
nts.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transfers between participants i
n DTC will be effected in the ordinary way
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with DTC rules. If
a holder requires physical delivery of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificated New Note for any re
ason, including to sell New Notes to persons in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdictions which require such
delivery of such New Notes or to pledge such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes, such holder must tran
sfer its interest in a global certificate in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with DTC's applicable
procedures, the procedures set forth in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and, if applicable, th
ose of Euroclear and Clearstream Banking.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC will take any action permitt
ed to be taken by a holder of New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only at the direction of one or
more participants to whose account the DTC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests in a global certificat
e is credited and only in respect of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of the aggregate princip
al amount of the New Notes as to which such

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant or participants has
or have given such direction. However, if there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is an event of default under the
New Notes, DTC will exchange a global
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate for certificated New
Notes, which it will distribute to its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC is a limited purpose trust c
ompany organized under the laws of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of New York, a member of t
he Federal Reserve System, a "clearing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation" within the meaning
of the Uniform Commercial Code and a "Clearing
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agency" registered pursuant to t
he provisions of Section 17A of the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act. DTC was created to hold sec
urities for its participants and facilitate the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clearance and settlement of secu
rities transactions between participants through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electronic book-entry changes in
accounts of its participants, thereby
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminating the need for physica
l movement of certificates. Participants include
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities brokers and dealers,
banks, trust companies and clearing corporations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and may include certain other or
ganizations. Indirect access to the DTC system
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is available to others such as b
anks, brokers, dealers and trust companies that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clear through or maintain a cust
odial relationship with a participant, either
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directly or indirectly (indirect
participants). The rules applicable to DTC and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its participants are on file wit
h the SEC.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Although DTC, Euroclear and Clea
rstream Banking are expected to follow the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing procedures in order to
facilitate transfers of interests in the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes represented by global cert
ificates among their respective participants,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql they are under no obligation to
perform or continue to perform such procedures,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and such procedures may be disco
ntinued at any time. Neither Oncor nor the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee will have any responsibi
lity for the performance by DTC, Euroclear or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clearstream Banking or their res
pective participants or indirect participants of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their respective obligations und
er the rules and procedures governing their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If DTC is at any time unwilling
or unable to continue as a depositary for a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql global certificate and a success
or depositary is not appointed by Oncor within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 90 days, Oncor will issue certif
icated New Notes in exchange for a global
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will make all payments of
principal and interest in immediately
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available funds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secondary trading in long-term b
onds and notes of corporate issuers is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally settled in clearing-ho
use or next-day funds. In contrast, beneficial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests in the New Notes that
are not certificated New Notes will trade in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC's Same-Day Funds Settlement
System until maturity. Therefore, the secondary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market trading activity in such
interests will settle in immediately available
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds. No assurance can be given
as to the effect, if any, of settlement in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately available funds on t
rading activity in the New Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information under this sub-c
aption "Book-Entry" concerning DTC and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC's book-entry system has been
obtained from sources that Oncor believes to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reliable, but Oncor does not tak
e any responsibility for the accuracy of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESCRIPTION OF THE 1983 MORTGAGE
BONDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The first mortgage bonds were is
sued on May 6, 2002 under the 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage. All first mortgage bon
ds issued or to be issued under the 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage, including the first mo
rtgage bonds delivered to the Trustee on May 6,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002 in connection with the issu
ance of the Old Notes, are collectively referred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to in this prospectus as the 198
3 Mortgage Bonds. Material terms of the 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Bonds are summarized be
low. Whenever particular provisions or defined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms in the 1983 Mortgage are r
eferred to under this DESCRIPTION OF 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MORTGAGE BONDS, such provisions
or defined terms are incorporated by reference

will be, secured by a first mortgage lien
property as described below under "Security and
ds are equally secured and rank equally with
red by a first lien on substantially all of
S Holdings on January 1, 2002, other than cash
cifically deposited); equipment, materials or
disposition; any fuel and similar consumable
les, other vehicles, aircraft and vessels;
and royalties; receivables, contracts, leases
ic energy, gas, water, steam, ice and other
or other use; natural gas wells; and gas
operty used in the sale of natural gas to
stribution or pipeline company, up to the point
ion network.
lien is subject to certain encumbrances,
iens, purchase money liens and certain other
sions that impose the lien of the 1983
ions, replacements and additions to the 1983
ncor after the date of the 1983 Mortgage, other
ibed above and subject to pre-existing liens
and other liens or defects in title. However,
with or conveys or transfers all or
ed property to another corporation, the lien
l generally not cover the property of the
e property it acquires from Oncor and
in this prospectus.
The 1983 Mortgage Bonds are, or
on substantially all of Oncor's
Priority." All 1983 Mortgage Bon
respect to each other.
SECURITY AND PRIORITY
The 1983 Mortgage Bonds are secu
Oncor's property acquired from U
and securities (except those spe
supplies held for sale or other
materials and supplies; automobi
timber, minerals, mineral rights
and operating agreements; electr
products for sale, distribution
transportation lines or other pr
customers or to a natural gas di
of connection with any distribut
In addition, the first mortgage
including tax and construction l
exceptions.
The 1983 Mortgage contains provi
Mortgage on improvements, extens
Mortgaged Property acquired by O
than the excepted property descr
such as purchase money mortgages
if Oncor consolidates or merges
substantially all of the mortgag
created by the 1983 Mortgage wil
successor company, other than th
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements, extensions, replac

ements and additions to that property. (1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage, Section 18.03.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The 1983 Mortgage provides that
the Mortgage Trustee shall have a lien upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 1983 Mortgaged Property, pri
or to the 1983 Mortgage Bonds, for the payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its reasonable compensation a
nd expenses and for indemnity against certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities. (1983 Mortgage, Sec
tion 19.09.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISSUANCE OF ADDITIONAL 1983 MORT
GAGE BONDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The maximum principal amount of
1983 Mortgage Bonds that may be issued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the 1983 Mortgage is unlim
ited. 1983 Mortgage Bonds of any series may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued from time to time on the
basis of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) 70% of qualified property a
dditions after adjustments to offset
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retirements;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) retirement of 1983 Mortgage
Bonds or certain prior lien bonds;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) deposits of cash.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With certain exceptions, in the
case of (2) above, the issuance of 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Bonds must meet an earn
ings test. The adjusted net earnings before
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income taxes for 12 out of the p
receding 15 months must be at least twice the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annual interest requirements on
all 1983 Mortgage Bonds at the time outstanding,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the additional issuanc
e and all other senior ranking indebtedness. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql general, interest on variable in
terest bonds, if any, is calculated using the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql average rate in effect during th
e 12 month period.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property additions generally inc
lude electric, gas, steam and/or hot water
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utility property but not fuel, s
ecurities, automobiles, other vehicles or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aircraft, or property used princ
ipally for the production or gathering of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql natural gas.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The 1983 Mortgage contains certa
in restrictions upon the issuance of 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Bonds against property
additions subject to prior liens. (1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage, Sections 1.04 to 1.07
and 3.01 to 7.01.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It is expected that the 1983 Mor
tgage Bonds to be delivered to the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be issued upon the basis of
the retirement of 1983 Mortgage Bonds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RELEASE AND SUBSTITUTION OF PROP
ERTY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property subject to the first mo
rtgage lien may be released upon the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) the deposit of cash or, to
a limited extent, purchase money
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mortgages;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) property additions, after m
aking adjustments in certain cases to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offset retirement and after maki
ng adjustments for prior lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonds outstanding against proper
ty additions; and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) waiver of the right to issu
e 1983 Mortgage Bonds,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in each case without applying an
y earnings test.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash may be withdrawn upon the b
ases stated in (2) and (3) above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql When property released is not fu
nded property, property additions used to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect the release may be availa
ble as credits under the 1983 Mortgage. Similar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions are in effect as to c
ash proceeds of such property. The 1983 Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contains special provisions with
respect to certain prior lien bonds deposited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and disposition of moneys receiv
ed on deposited prior lien bonds. (1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage, Sections 1.05, 7.02, 7
.03, 9.05, 10.01 to 10.04 and 13.03 to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.09.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIVIDEND RESTRICTIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The 1983 Mortgage provides that
Oncor may declare or pay dividends (other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than dividends payable solely in
shares of its common stock) on any shares of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its common stock only out of the
unreserved and unrestricted retained earnings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and will not make any such decla
ration or payment when it is insolvent, or when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the payment thereof would render
Oncor insolvent. (1983 Mortgage, Section 9.07.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The amount restricted is subject
to being increased or decreased on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis of various factors, and an
y restricted retained earnings can be otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used by Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIAL PROVISIONS FOR RETIREMEN
T OF 1983 MORTGAGE BONDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If mortgaged property is condemn
ed or sold (other than in a project to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jointly owned by Oncor and other
s) to any governmental authority resulting in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the receipt of $50,000,000 or mo
re as proceeds, Oncor (subject to certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions) must apply such proc
eeds, less certain deductions, to the retirement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of 1983 Mortgage Bonds. (1983 Mo
rtgage, Section 9.14.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MODIFICATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The rights of bondholders may be
modified with the consent of holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 60% of all 1983 Mortgage Bonds o
utstanding, or, if less than all series of 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Bonds are adversely aff
ected, the consent of the holders of 60% of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1983 Mortgage Bonds adversely af
fected and (unless 1983 Mortgage Bonds issued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to 1989 are retired or the
holders of those 1983 Mortgage Bonds otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent) of the holders of a maj
ority of all 1983 Mortgage Bonds. In general, no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modification of the terms of pay
ment of principal, premium, if any, or interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and no modification affecting th
e first lien or reducing the percentage required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for modification, is effective a
gainst any bondholder without such holder's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent. (1983 Mortgage, Article
XXI.)
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VOTING OF 1983 MORTGAGE BONDS HE
LD BY THE TRUSTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee will, as holder of t
he 1983 Mortgage Bonds, attend such

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meetings of bondholders under th
e 1983 Mortgage, or deliver its proxy in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection therewith, as to matt
ers with respect to which it is entitled to vote
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or consent. See DESCRIPTION OF T
HE NOTES - Voting of Class A Bonds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFAULTS AND NOTICE OF DEFAULTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Defaults" are defined in the 19
83 Mortgage as:
default in payment of princ
ipal;
default for 60 days in paym
ent of interest or an installment of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fund required to be applied to t
he purchase or redemption of any 1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Bonds;
default in payment of princ
ipal or interest with respect to certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior lien bonds;
certain events in bankruptc
y, insolvency or reorganization; and
default in other covenants
for 90 days after notice. (1983 Mortgage,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 15.01.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Mortgage Trustee may withhol
d notice of default, except in the case of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a default in the payment of prin
cipal, interest or an installment of any fund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be applied to the pu
rchase or redemption of any 1983 Mortgage Bonds,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if it determines that doing so i
s in the best interest of the bondholders. (1983
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage, Section 15.02.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Mortgage Trustee or the hold
ers of 25% of the 1983 Mortgage Bonds may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declare the principal and intere
st due and payable on default, but a majority
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may annul such declaration if su
ch default has been cured. (1983 Mortgage,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 15.03.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No holder of 1983 Mortgage Bonds
may enforce the lien of the 1983 Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without giving the Mortgage Trus
tee written notice of a default and unless the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of 25% of the 1983 Mortg
age Bonds have requested the Mortgage Trustee to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql act and have offered it reasonab
le opportunity to act and indemnity satisfactory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to it against the costs, expense
s and liabilities to be incurred thereby and the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Trustee shall have fail
ed to act. (1983 Mortgage, Section 15.16.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The holders of a majority of the
1983 Mortgage Bonds may direct the time,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql method and place of conducting a
ny proceedings for any remedy available to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage Trustee or exercising a
ny trust or power conferred on the Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee. (1983 Mortgage, Section
15.07.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Mortgage Trustee is not requ
ired to risk its funds or incur personal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability if there is reasonable
ground for believing that repayment is not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably assured. (1983 Mortga
ge, Section 19.08.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SATISFACTION AND DISCHARGE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon Oncor making due provision
for the payment of all of the 1983 Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds and paying all other sums
due under the 1983 Mortgage, the 1983 Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will cease to be of further effe
ct and may be discharged. (1983 Mortgage,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article XX.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANNUAL REPORT TO THE MORTGAGE TR
USTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor must give the Mortgage Tru
stee an annual statement as to whether or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not Oncor has fulfilled its obli
gations under the 1983 Mortgage throughout the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding calendar year.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MATERIAL UNITED STATES FEDERAL I
NCOME TAX CONSIDERATIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following summary describes
the material United States federal income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tax consequences of exchanging O
ld Notes for New Notes and of the ownership and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition of the New Notes as
of the date hereof and represents the opinion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thelen Reid & Priest LLP, Oncor'
s counsel, insofar as it relates to matters of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law or legal conclusions. Except
where noted, it deals only with New Notes held
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as capital assets within the mea
ning of Section 1221 of the Internal Revenue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Code of 1986, as amended, and do
es not deal with special situations, such as

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those of dealers or traders in s
ecurities or currencies, banks, financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql institutions, tax-exempt organiz
ations, life insurance companies, real estate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment trusts, regulated inv
estment companies, persons holding New Notes as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a part of a hedging or conversio
n transaction or a straddle, persons who mark to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market their securities, persons
whose functional currency is not the United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States dollar or former United S
tates citizens or long-term residents who are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to special rules on acco
unt of their loss of United Stated citizenship
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or resident alien status. In add
ition, this discussion does not address the tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consequences to persons who purc
hased Old Notes other than pursuant to their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql initial issuance and distributio
n, and who acquire New Notes other than in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer. It also does not
include any description of any alternative
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minimum tax consequences or the
tax laws of any state, local or foreign
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The discussion below is based up
on the provisions of the Internal Revenue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Code, Treasury Regulations promu
lgated thereunder, and administrative rulings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and judicial decisions under the
Internal Revenue Code as of the date hereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of which may be repealed, re
voked or modified at any time, with either
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forward-looking or retroactive e
ffect, so as to result in United States federal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income tax consequences differen
t from those discussed below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROSPECTIVE HOLDERS OF NEW NOTES
ARE ADVISED TO CONSULT WITH THEIR TAX
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVISORS AS TO THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OWNERSHIP AND DISPOSITION OF NEW
NOTES IN LIGHT OF THEIR PARTICULAR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CIRCUMSTANCES, AS WELL AS THE EF
FECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used herein, a "United States
Holder" means a beneficial owner of an Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note or a New Note that is a cit
izen or resident of the United States, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation, partnership or othe
r entity created or organized in or under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws of the United States or any
political subdivision thereof, an estate, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income of which is subject to Un
ited States federal income taxation regardless
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its source, or a trust, the a
dministration of which is subject to the primary

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supervision of a court within th
e United States and for which one or more United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States persons have the authorit
y to control all substantial decisions. As used
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, the term "Non-United Sta
tes Holder" means a beneficial owner of an Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note or a New Note that is not a
United States Holder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE OF OLD NOTES FOR NEW NO
TES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An exchange of Old Notes for New
Notes in this exchange offer will not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute a taxable exchange of
the notes for United States federal income tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes. Rather, the New Notes
will be treated as a continuation of the Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes. As a result, a holder wil
l not recognize any income, gain or loss for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States federal income tax
purposes upon the exchange of Old Notes for New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, and the holder will have
the same tax basis and holding period in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder's New Notes as the holder
had in the Old Notes immediately before the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNITED STATES HOLDERS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAYMENTS OF INTEREST
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stated interest on a New Note wi
ll generally be taxable to a United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder as ordinary income at the
time it is paid or accrued in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the holder's method of accountin
g for tax purposes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SALE, EXCHANGE AND RETIREMENT OF
THE NEW NOTES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the sale, exchange or retir
ement of New Notes (including a deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition for United States fe
deral income tax purposes), a United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder will recognize gain or lo
ss equal to the difference between (i) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount realized upon the sale, e
xchange or retirement, other than amounts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attributable to accrued but unpa
id interest, and (ii) the holder's adjusted tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis in the New Notes. The hold
er's adjusted tax basis in the New Notes will
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be, in general, its initial purc
hase price for the Old Notes it is exchanging.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The gain or loss upon the sale,
exchange or retirement of the New Notes will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital gain or loss and will be
long-term capital gain or loss if at the time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of sale, exchange or retirement,
the New Notes are treated as having been held
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for more than one year. Under cu
rrent law, the deductibility of capital losses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is subject to limitations. Capit
al gain of a non-corporate United States Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is generally taxed at a maximum
rate of 20% where the property is held for more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than one year, and at a maximum
rate of 18% where the property is purchased
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after December 31, 2000, and hel
d for more than five years.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NON-UNITED STATES HOLDERS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NON-UNITED STATES HOLDERS NOT EN
GAGED IN A TRADE OR BUSINESS WITHIN THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNITED STATES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments of Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as described in the follo
wing paragraph, a Non-United States Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not be subject to federal i
ncome tax on interest received on the New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if the interest is not effective
ly connected with a trade or business that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder conducts within the Unite
d States. To obtain this tax-free treatment, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder (or a financial instituti
on acting on behalf of the holder) must file a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement with Oncor or Oncor's
paying agent confirming that the holder is the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficial owner of the New Note
s and is not a United States person. The holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql should make the statement on IRS
Form W-8BEN, which requires the holder to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certify, under penalties of perj
ury, the holder's name, address and status as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-United States person. Altern
atively, a financial institution holding the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes on behalf of the holder ma
y file a statement confirming the holder's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql status as a non-United States pe
rson if the financial institution is in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possession of documentary eviden
ce of the non-United States status, as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prescribed in the Treasury Regul
ations. However, if Oncor has actual knowledge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or reason to know that the benef
icial owner of the New Notes is a United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder, Oncor must disregard any
certificate or statement to the contrary and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withhold federal income tax.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The exemption described above is
not available to a Non-United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder that (a) owns 10% or more
of Oncor's stock, either actually or by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application of constructive owne
rship rules, or (b) is a controlled foreign
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation related to Oncor thr
ough stock ownership. Oncor will withhold
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal income tax at the rate o
f 30% (or lower treaty rate, if applicable) in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case of interest payments to
holders described in this paragraph.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sale, Exchange and Retirement of
the New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Non-United States Holder gener
ally will not be subject to United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal income tax with respect
to gain recognized on a sale, exchange or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retirement of a New Note (includ
ing a deemed disposition for United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal income tax purposes) unl
ess (1) the gain is effectively connected with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the holder's trade or business i
n the United States (discussed below); or (2) in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case of a Non-United States
Holder who is an individual and holds the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note as a capital asset, the hol
der is present in the United States for 183 or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more days in the taxable year of
the sale or other disposition and certain other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions are met. However, any
amount attributable to accrued but unpaid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on the New Note will be
treated in the same manner as payments of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on the New Note made to
the Non-United States Holder, as described
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NON-UNITED STATES HOLDERS ENGAGE
D IN A TRADE OR BUSINESS WITHIN THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNITED STATES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments of Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest paid on a New Note that
is effectively connected with the conduct
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by a Non-United States Holder of
a trade or business in the United States is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally taxed at the graduated
rates that are applicable to United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons. In the case of a Non-Un
ited States Holder that is a corporation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effectively connected earnings a
nd profits (which may include effectively
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connected interest received on t
he New Notes) that are not currently distributed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may also be subject to the Unite

d States federal branch profits at a 30% rate,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless the tax is reduced or eli
minated by an applicable income tax treaty.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will not withhold United S
tates federal income tax on interest paid on a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Note to a Non-United States
Holder if the holder furnishes Oncor with IRS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form W-8ECI establishing that th
e interest is effectively connected. If a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-United States Holder engaged
in a trade or business within the United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receives interest that is not ef
fectively connected with the trade or business,
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interest will be taxed in th
e manner described above in the case of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-United States Holders who ar
e not engaged in a trade or business within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sale, Exchange or Retirement of
the New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Gain derived by a Non-United Sta
tes Holder from the sale or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition (including a deemed
disposition for United States federal income tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes) of a New Note that is
effectively connected with the conduct by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of a trade or business in
the United States is generally taxed at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql graduated rates that are applica
ble to United States persons. In the case of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-United States Holder that is
a corporation, effectively connected income may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also be subject to the United St
ates federal branch profits tax.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION REPORTING AND BACKUP
WITHHOLDING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments to United States Holder
s of interest on, and the proceeds from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale, retirement or other dispos
ition of New Notes are subject to information
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reporting unless the holder esta
blishes an exemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments to United States Holder
s of interest on, or the proceeds from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale, retirement, or other dispo
sition of the New Notes may be subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "backup withholding" tax if (a)
the holder fails to certify his or her correct
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql social security number or other

taxpayer identification number ("TIN") to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payor responsible for backup wit
hholding (for example, the Holder's securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker) on IRS Form W-9 or a sub
stantially similar form signed under penalty of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perjury, or (b) the Internal Rev
enue Service notifies the payor that the holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is subject to backup withholding
due to the holder's failure to properly report
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest and dividends on his or
her tax return. The backup withholding rate for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002 and 2003 is 30%; for 2004 a
nd 2005, 29%; for 2006 though 2010, 28%; and for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2011 and later years, 31%.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Backup withholding does not appl
y to interest payments made to exempt
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recipients, such as corporations
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-United States Holders will b
e subject to backup withholding and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information reporting with respe
ct to payments of principal or interest on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes unless (i) the holder
provides a properly completed and signed IRS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form W-8BEN (or acceptable subst
itute) and the payor does not have actual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql knowledge or reason to know that
the form is incorrect, or (ii) the beneficial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owner otherwise establishes an e
xemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition, Non-United States H
olders generally will not be subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information reporting or backup
withholding with respect to payments of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal or interest on the New
Notes paid or collected by a foreign office of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a custodian, nominee or other fo
reign agent on behalf of the holder, or with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the payment of the pr
oceeds of the sale of New Notes to the holder by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a foreign office of a broker. If
, however, the foreign office acting for a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-United States Holder is an o
ffice of a United States person, a controlled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foreign corporation or a foreign
person that derives 50% or more of its gross
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income for certain periods from
the conduct of a United States trade or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business, or a foreign partnersh
ip with certain connections to the United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States, payments of principal, i
nterest or proceeds will be subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information reporting unless (i)
the custodian, nominee, agent or broker has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documentary evidence that the be
neficial owner is not a United States person and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain other conditions are met

, or (ii) the beneficial owner otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql establishes an exemption. Paymen
ts that are subject to information reporting as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in the preceding sente
nce will not be subject to backup withholding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless the payor has actual know
ledge or reason to know that the payee is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States person.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Backup withholding is not an add
itional tax. Any amounts withheld under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql backup withholding rules general
ly will be allowed as a credit or a refund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the holder's United Stat
es federal income tax liability, if certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required information is provided
to the Internal Revenue Service.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLAN OF DISTRIBUTION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As discussed under THE EXCHANGE
OFFER in this prospectus, based on an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation of the staff of t
he SEC, New Notes issued pursuant to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer may be offered fo
r resale and resold or otherwise transferred by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a holder of such New Notes (othe
r than any such holder which is an "affiliate"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Oncor within the meaning of R
ule 405 under the Securities Act and except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise discussed below with r
espect to holders which are broker-dealers)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without compliance with the regi
stration and prospectus delivery requirements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act so long as su
ch New Notes are acquired in the ordinary course
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such holder's business and su
ch holder has no arrangement or understanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with any person to participate i
n the distribution (within the meaning of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act) of such New Note
s.
New Notes for its own account pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this exchange offer must acknowl
edge that it will deliver a prospectus in
ch New Notes. This prospectus, as it may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended or supplemented from tim
e to time, may be used by a broker-dealer in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with resales of New N
otes received in exchange for Old Notes where
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Old Notes were acquired as
a result of market-making activities or other

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trading activities. Oncor has ag
reed that, for a period of 90 days after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consummation of this exchange of
fer, Oncor will make this prospectus, as amended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or supplemented, available to an
y broker-dealer for use in connection with any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such resale.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor will not receive any proce
eds from any sale of New Notes by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker-dealers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes received by broker-dea
lers for their own account pursuant to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer may be sold from
time to time in one or more transactions in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql over-the-counter market, in nego
tiated transactions, through the writing of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options on the New Notes or a co
mbination of such methods of resale, at market
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prices prevailing at the time of
resale, at prices related to such prevailing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market prices or negotiated pric
es. Any such resale may be made directly to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasers or to or through brok
ers or dealers who may receive compensation in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the form of commissions or conce
ssions from any such broker-dealer or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasers of any such New Notes
. Any broker-dealer that resells New Notes that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were received by it for its own
account pursuant to this exchange offer and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker or dealer that participat
ed in a distribution of such New Notes may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to be an "underwriter" wi
thin the meaning of the Securities Act and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql profit on any such resale of New
Notes and any commissions or concessions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by any such persons may
be deemed to be underwriting compensation under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act. The accompan
ying Letter of Transmittal states that, by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledging that it will deliv
er and by delivering a prospectus, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker-dealer will not be deemed
to admit that it is an "underwriter" within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning of the Securities Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For a period of 90 days after th
e consummation of the registered exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer, Oncor will promptly send
additional copies of this prospectus and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment or supplement to this
prospectus to any broker-dealer that requests
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such documents in the Letter of
Transmittal. Oncor has agreed with the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers of the Old Notes to p
ay expenses incident to this exchange offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including the expenses of one c
ounsel for the holders of the Old Notes) other

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than commissions or commissions
of any brokers or dealers and will indemnify the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of the Old Notes (includ
ing any broker-dealers) against certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities, including liabiliti
es under the Securities Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By acceptance of this exchange o
ffer, each broker-dealer that receives New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes for its own account pursua
nt to this exchange offer agrees that, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of notice from Oncor of
the happening of any event which makes any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement in this prospectus unt
rue in any material respect or requires the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql making of any changes in the pro
spectus in order to make the statements therein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not misleading (which notice Onc
or agrees to deliver promptly to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker-dealer), such broker-deal
er will suspend use of this prospectus until
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor has amended or supplemente
d this prospectus to correct such misstatement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or omission and has furnished co
pies of the amended or supplemented prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such broker-dealer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The interpretation of the staff
of the SEC referred to in the first
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph of this section does n
ot apply to, and this prospectus may not be used
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with, the resale b
y any broker-dealer of any New Notes received in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange for an unsold allotment
of Old Notes purchased directly from Oncor.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXPERTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The combined financial statement
s of Oncor as of December 31, 2001 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2000, and for the three years en
ded December 31, 2001, included in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stated in their report appearing
herein. Such combined financial statements have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been included in this prospectus
in reliance upon the report of such independent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql auditors given upon their author
ity as experts in accounting and auditing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VALIDITY OF THE NEW NOTES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thelen Reid & Priest LLP, New Yo
rk, New York, and Hunton & Williams,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dallas, Texas, will pass upon th
e validity of the New Notes for Oncor. However,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all matters of Texas law will be
passed upon only by Hunton & Williams, Dallas,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas. At June 30, 2002, the fai
r market value of securities of TXU owned by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorneys at each of the firms o
f Hunton & Williams and Thelen Reid & Priest LLP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participating in the representat
ion of Oncor in connection with the preparation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this prospectus and the regis
tration statement was approximately $480,000 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $191,490, respectively. Robert A
. Wooldridge, a partner at Hunton & Williams, is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a member of the governing board
of certain subsidiaries of TXU Corp., including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor. Robert J. Reger, Jr., a p
artner at Thelen Reid & Priest LLP, is an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer and a member of the gove
rning board of certain subsidiaries of TXU Corp.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL STATEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDEX TO FINANCIAL STATEMENTS
PAGE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEARS ENDED DECEMBER 31, 2001, 2
000 AND 1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Independent Auditors' Report....
..................................... F-2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statements of Combined Income fo
r the years
d 1999............................... F-3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statements of Combined Cash Flow
s for the years
d 1999............................... F-4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Combined Balance Sheets as of De
cember 31, 2001 and 2000............. F-5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statements of Combined Sharehold
er's Equity for the years
d 1999............................... F-6
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes to Financial Statements...
..................................... F-7
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIX MONTHS ENDED JUNE 30, 2002 A
ND 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Condensed Statements of Consolid
ated Income for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql three and six months ended June
30, 2002 and 2001.................... F-20
ated Comprehensive Income for the
30, 2002 and 2001.................... F-20
ated Cash Flows for the
30, 2002 and 2001.................... F-21
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Condensed Consolidated Balance S
heets as of June 30, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and December 31, 2001...........
..................................... F-22
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes to Financial Statements...
..................................... F-23
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-1
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDEPENDENT AUDITORS' REPORT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor Electric Delivery Company:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We have audited the accompanying
combined balance sheets of Oncor Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delivery Company (Oncor) and the
businesses that comprise Oncor, as of December
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31, 2001 and 2000, and the relat
ed statements of combined income, cash flows and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholder's equity for each of
the three years in the period ended December
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31, 2001. The combined financial
statements include the accounts of Oncor and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related businesses as discussed
in Note 1 to the financial statements. These
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql businesses were operated by subs
idiaries of TXU Corp. under common ownership and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql common management for the period
s presented. These financial statements are the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibility of Oncor's manage
ment. Our responsibility is to express an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opinion on these financial state
ments based on our audits.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We conducted our audits in accor
dance with auditing standards generally accepted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the United States of America.
Those standards require that we plan and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform the audit to obtain reas
onable assurance about whether the financial

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements are free of material
misstatement. An audit includes examining, on a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql test basis, evidence supporting
the amounts and disclosures in the financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements. An audit also includ
es assessing the accounting principles used and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql significant estimates made by ma
nagement, as well as evaluating the overall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statement presentation
. We believe that our audits provide a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable basis for our opinion
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In our opinion, such combined fi
nancial statements present fairly, in all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material respects, the financial
position of Oncor and related businesses as of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 31, 2001 and 2000, and
the results of their operations and their cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flows for each of the three year
s in the period ended December 31, 2001, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conformity with accounting princ
iples generally accepted in the United States of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql America.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DELOITTE & TOUCHE LLP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dallas, Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 15, 2002
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATEMENTS OF COMBINED INCOME
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 31,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MILLIONS OF DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operating revenues..............
......................................
$2,314
$2,081
$1,931
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operating expenses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operation and maintenance.......
...................................
920
811
710
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depreciation and amortization...
...................................
239
232
211
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income taxes....................
...................................
118
118
100
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Taxes other than income.........
...................................
543
436
423
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total operating expenses........

................................
1,820
1,597
1,444
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operating income................
......................................
494
484
487
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other income (deductions)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other income (deductions) -- net
...................................
2
3
17
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income tax expense..............
...................................
(1)
(2)
(6)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total other income (deductions).
................................
1
1
11
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income before interest and other
charges..............................
495
485
498
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest income.................
......................................
1
2
es
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest........................
...................................
274
264
281
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Allowance for borrowed funds use
d during construction..............
(7)
(4)
(4)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total interest expense and other
charges........................
267
260
277
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net income......................
.......................................
$ 228
$ 226
$ 223
======
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql See Notes to Financial Statement
s.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATEMENTS OF COMBINED CASH FLOW
S
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows-- operating activitie
s

.....................................
$ 228
$ 226
$ 223
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Adjustments to reconcile net inc
ome to cash provided by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operating activities:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depreciation and amortization ..
...................................
324
316
246
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Deferred income taxes and invest
ment tax credits -- net ...........
33
(24)
137
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Changes in operating assets and
liabilities:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts receivable.............
.................................
(23)
(27)
65
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts payable -- affiliates..
.................................
28
(60)
69
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts payable -- trade.......
.................................
-2
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest and taxes accrued......
.................................
74
5
(79)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other -- net....................
.................................
11
3
(38)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash provided by operating activ
ities.........................
675
441
623
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows -- financing activiti
es
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Increase in debt allocated from
US Holdings........................
400
575
50
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retirements/repurchases of debt
allocated from US Holdings.........
(920)
(159)
(601)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Repurchase of common stock of US
Holdings allocated to Oncor.......
(455)
(248)
(226)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advances from affiliates -- net.
...................................
964
(83)
686
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debt premium, discount, financin
g and reacquisition expenses.......
(55)
(4)
(23)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash provided by (used in) finan
cing activities...............
(66)
81
(114)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows -- investing activiti
es
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capital expenditures............
...................................
(635)
(517)
(489)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other...........................
...................................
39
12
(20)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash used in investing activitie
s.............................
(596)
(505)
(509)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net change in cash and cash equi
valents................................
13
17
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash and cash equivalents -- beg
inning balance.........................
22
5
5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash and cash equivalents-- endi
ng balance.............................
$ 35
$ 22
$
5
======
======
s.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMBINED BALANCE SHEETS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DECEMBER 31,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001
2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ASSETS
MILLIONS OF DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Current assets:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash and cash equivalents.......
..............................................
$ 35
$ 22
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts receivable.............
..............................................
131
108
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Materials and supplies inventori
es -- at average cost.........................
38
32
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prepayments.....................
..............................................
29
26
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other current assets............
..............................................
7
5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total current assets............
...........................................
240
193
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Investments.....................
................................................
54
53
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, plant and equipment -net............................................
5,802
5,445
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due from TXU Energy ............
................................................
787
182
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulatory assets -- net........
................................................
1,605
2,266
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Deferred debits and other assets
................................................
7
10
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total assets....................
...........................................
$8,495
$8,149
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIABILITIES AND SHAREHOLDER'S EQ
UITY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Current liabilities:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Long-term debt due currently....
..............................................
$ 370
$ 217
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advances from affiliates........
..............................................
108
842
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts payable:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates......................
...........................................
43
15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trade...........................
...........................................
50
50
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Customer deposits...............
..............................................
81
79
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Taxes accrued...................
..............................................
170
88
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accrued interest................
..............................................
54
62
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other current liabilities.......
..............................................
130
90
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total current liabilities.......
...........................................
1,006
1,443
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accumulated deferred income taxe
s...............................................
1,204
1,117
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Investment tax credits..........
................................................
79
85
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other deferred credits and noncu
rrent liabilities...............................
223
220
currently......................................
3,282
2,752
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contingencies (Note 10)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shareholder's equity............
................................................
2,701
2,532
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total liabilities and shareholde
r's equity.................................
$8,495
$8,149
======
s.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATEMENTS OF COMBINED SHAREHOLD
ER'S EQUITY
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance at beginning of year....
.......................................
$2,532
$2,554
$2,557
....................................
228
226
223
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Repurchase of common stock of US
Holdings allocated to Oncor........
(455)
(248)
(226)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Conversion of advances to capita
l...................................
396
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance at end of year..........
.......................................
$2,701
$2,532
$2,554
======
======
s.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTES TO FINANCIAL STATEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. BUSINESS
(Oncor) was formed as a Texas corporation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the fourth quarter of 2001, o
riginally as TXU Electric Delivery Company, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was renamed effective January 17
, 2002. Oncor was created as a result of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deregulation of the electric uti
lity industry in Texas, which became effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2002. Oncor consists
of the regulated electric transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution businesses transfer
red from TXU US Holdings Company (US Holdings),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formerly TXU Electric Company, a
nd TXU SESCO Company (TXU SESCO) effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2002. Oncor is a whol
ly-owned subsidiary of US Holdings, which is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly-owned subsidiary of TXU C
orp. (TXU).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is a regulated electric ut
ility engaged in the transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution of electric energy
in the north-central, eastern and western parts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Texas. Oncor's transmission c
ustomers consist of municipalities, electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cooperatives and other distribut
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consist of approximately 30 reta
il electric providers (REPs) in Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificated service area, inclu
ding a subsidiary REP of TXU Energy Company LLC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (TXU Energy), which is another w
holly-owned subsidiary of US Holdings. Oncor is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql managed as a single, integrated
electric energy delivery business; consequently,
business segments.
ation was passed during the 1999 session of
uctures the electric utility industry in Texas
. Among other matters, the l999 Restructuring
nuary 1, 2002, each electric utility separate
following: power generation operations, a REP
ion (T&D) company or separate T&D companies.
erning restructuring of the electric utility
TXU restructured certain of its businesses as
participate in retail competition in the Texas
2002.
uring Legislation, US Holdings filed its
e Public Utility Commission of Texas (PUCT).
d the March 2000 application to the PUCT laid
o take part in retail competition in the Texas
January 1, 2002. In order to satisfy its
ness pursuant to the 1999 Restructuring
its business separation plan as amended and
31, 2001, as of January 1, 2002, US Holdings
business to Oncor;
wer generation business to TXU Energy; and
unregulated subsidiary REP of TXU Energy.
ulated electric T&D business of TXU SESCO
s affected by the restructuring and their
ect to their collective assets and liabilities
there are no separate reportable

Business Restructuring -- Legisl
the Texas Legislature that restr
(1999 Restructuring Legislation)
Legislation required that, by Ja
(unbundle) its business into the
and a transmission and distribut
(See Note 3 for information conc
industry in Texas.) As a result,
of January 1, 2002 and began to
electricity market on January 1,
As required by the 1999 Restruct
business separation plan with th
This business separation plan an
the foundation for US Holdings t
electricity market as planned on
obligations to unbundle its busi
Legislation and consistent with
approved by the PUCT on October
transferred:
o
its regulated electric T&D
its unregulated electric po
its retail customers to an
Also, on January 1, 2002 the reg

was transferred to Oncor.
The relationships of the entitie
rights and obligations with resp
are contractually described in a
master separation agreement executed in

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 2001 (Business Separati
on Agreement).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The diagrams below summarize TXU
's principal US legal entities and their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relationships before and after t
he restructuring.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CHART
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Organization Chart wtih 2 column
s
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Left Column
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title (centered over column) - B
efore Restructuring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Top Box, centered, labeled - TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Next level - 2 boxes, labeled (l
eft to right) - TXU Gas Company, TXU Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Next level - 1 box (under frst b
ox), labeled - TXU Energy Trading Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right Column
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title (centered over column) - A
fter Restructuring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Top box, centered, labeled - TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Next level - 2 boes, labeled (le
ft to right) - TXU Gas Company, US Holdings*
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Next level - 2 boxes under secon
d box, labeled (left to right) - TXU Energy,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Next level - 3 boxes under first
box, labeled (left to right) - TXU Generation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings Company LLC, TXU Energy
Trading Companty LP, TXU Energy Retail Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ___________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *Formerly TXU Electric Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [GRAPHIC OMITTED]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Basis of Presentation and Combin
ation -- The businesses that form Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were operated as fully integrate
d utilities of US Holdings and TXU SESCO.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective January 1, 2002, the T
&D operations of US Holdings were unbundled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and combined with the T&D operat
ions of TXU SESCO to form Oncor. The combined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements of Oncor pr
esent the historical financial position, results
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of operations and cash flows of

the T&D operations of US Holdings and TXU SESCO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that were combined. These busine
sses were operated by subsidiaries of TXU under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql common ownership and common mana
gement for the periods presented.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial information of US
Holdings' T&D business included in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined financial statements wa
s derived from the historical financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements of US Holdings. US Ho
ldings maintained expense accounts for each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its component operations. Howeve
r, revenues of US Holdings consisted of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bundled rate for all operations
combined. Historical Oncor revenues were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by unbundling the T&D
component of revenues from US Holdings' bundled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate charged to customers. Alloc
ation of revenues between TXU Energy and Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also reflected consideration of
return on invested capital, which is regulated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Oncor. Expenses related to o
perations and maintenance and depreciation and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amortization, as well as assets,
such as property, plant and equipment,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materials and supplies and fuel,
were specifically identified by component
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation and disaggregated. Var
ious allocation methodologies were used to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disaggregate common expenses, as
sets and liabilities between US Holdings'
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation and T&D operations. I
nterest and other financing costs were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined based upon debt alloc
ated. In connection with the Business Separation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, Oncor and TXU Energy
have agreed on how the related advances and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intercompany accounts will be se
ttled. This resulted in the reclassification of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $437 million as an intercompany
receivable from TXU Energy, to be paid over the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term of the securitization bonds
(see Note 3), with an offset to advances from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliates. The amounts for prio
r years have been reclassified to conform to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current proposed settlement term
s. There was no effect on earnings or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholder's equity as a result
of such reclassification. Certain other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reclassifications have been made
to the prior year assets, liabilities and cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flows to conform to the current
year presentation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial information of TXU
SESCO's T&D business included in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined financial statements wa
s derived from the separate historical financial
were not allocated to either Oncor or TXU
y of legal, consulting and other costs
g of US Holdings ($25 million in 2001 and $36
\page
erest expense and preferred stock dividends
ock, respectively, that will remain at US
23 million in 2000 and $24 million in 1999).
ocation methodologies used are reasonable.
separate entity, its results of operations and
ffered materially from those included in the
cluded herein. In addition, future results of
position could differ materially from the
t provides, in general, that the economic
regulated to a competitive environment will be
tranded costs as finally determined and other
t from (or refund to) REPs, through a
), amounts associated with the unregulated
ion and remit to (or collect from) TXU Energy
been securitized. These combined financial
from TXU Energy to Oncor of all regulatory
d be subject to finalization at true-up of
he 1999 Restructuring Legislation, with a
due from or to TXU Energy. Any changes to the
s and any final determination of stranded costs
ments to the amount due from or to TXU Energy
statements of TXU SESCO.

Certain expenses of US Holdings
Energy. These consisted primaril
associated with the restructurin
F-8
million in 2000), as well as int

related to debt and preferred st
Holdings ($24 million in 2001, $
Management believes that the all
Had Oncor actually existed as a
financial position could have di
combined financial statements in
Oncor's operations and financial
historical results presented.
The Business Separation Agreemen
impacts of the transition from a
borne by TXU Energy, including s
related items. Oncor will collec
non-bypassable tariff (or credit
business' transition to competit
any such amounts which have not
statements reflect the transfer
assets and liabilities that woul
stranded costs, as required by t
corresponding amount recorded as
regulatory assets and liabilitie
at true-up will result in adjust
and will be reflected in earning
s of TXU Energy as an extraordinary item in

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with Statement of Fin
ancial Accounting Standards (SFAS) No. 101
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Regulated Enterprises - Account
ing for the Discontinuation of Application of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FASB Statement No. 71." (see Reg
ulatory Settlement Plan in Note 3.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. SIGNIFICANT ACCOUNTING POLI
CIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Combination -- The combined fina
ncial statements were prepared on the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described above and are in confo
rmity with accounting principles generally
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accepted in the United States of
America. All intercompany items and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transactions between the combine
d companies have been eliminated. All dollar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts in the financial stateme
nts and notes to financial statements are stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in millions of US dollars unless
otherwise indicated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Comprehensive Income -- There we
re no items affecting comprehensive income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the periods reported; theref
ore, comprehensive income is the same as net
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Use of Estimates -- The preparat
ion of Oncor's financial statements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires management to make esti
mates and assumptions about future events that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the reporting and disclos
ure of assets and liabilities at the balance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sheet dates and the reported amo
unts of revenue and expense during the periods.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event estimates or assump
tions prove to be different from actual amounts,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustments are made in subseque
nt periods to reflect more current information.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition, see Note 1 for disc
ussion of estimates used and methodologies
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employed to derive the combined
financial statements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System of Accounts -- The accoun
ting records of Oncor are maintained in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the Federal Ener
gy Regulatory Commission's Uniform System of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts as adopted by the PUCT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Goodwill -- Goodwill represents
the excess of the purchase price paid over
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the estimated fair value of the
assets acquired and liabilities assumed for each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company acquired and was amortiz
ed over 40 years. Annual goodwill amortization
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of $0.8 million ceased after Dec
ember 31, 2001 and remaining goodwill is subject

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to an impairment-based review pr
ocedure. (See Changes in Accounting Standards
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below.) At December 31, 2001 and
2000, goodwill of $25 million and $26 million,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively, is included in inv
estments and is stated net of accumulated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amortization of $7 million and $
6 million, respectively.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, Plant and Equipment -T&D property, plant and equipment is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stated at original cost. The cos
t of T&D property additions includes labor and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materials, applicable overhead a
nd payroll-related costs and an allowance for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds used during construction (
AFUDC). Other property is stated at cost.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Allowance For Funds Used During
Construction -- AFUDC is a regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting procedure whereby amo
unts based upon interest charges on borrowed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds and a return on equity cap
ital used to finance construction are added to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utility plant being constructed.
Oncor used AFUDC rates of 6.6% in 2001 and 9.0%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in 2000 and 1999.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Valuation of Long-Lived Assets - Oncor evaluates the carrying value of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long-lived assets to be held and
used when events and circumstances warrant such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a review. The carrying value of
long-lived assets would be considered impaired
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when the projected undiscounted
cash flows are less than the carrying value. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that event, a loss would be reco
gnized based on the amount by which the carrying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value exceeds the fair market va
lue. Fair market value is determined primarily
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by available market valuations o
r, if applicable, discounted cash flows. See
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Changes in Accounting Standards
below for a discussion of changes in valuation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql criteria for long-lived assets e
ffective January 1, 2002.
s -- The combined financial statements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor reflect regulatory assets
and liabilities under cost-based rate regulation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with SFAS No. 71,
"Accounting for the Effects of Certain Types of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulation." The regulatory asse
ts and liabilities include those that arose from

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql US Holdings' and TXU SESCO's T&D
operations and those assigned from US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that arose from generation opera
tions. (See Note 3.)
T&D sales revenues are recognized when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services are provided to custome
rs on the basis of periodic cycle meter readings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and include an estimated accrual
for the value of electricity delivery service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the meter reading date to t
he end of the period.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depreciation of Property, Plant
and Equipment -- Depreciation of electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utility plant is generally based
upon an amortization of the original cost of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql depreciable properties on a stra
ight-line basis over the estimated service lives
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the properties. Depreciation
of all other plant and equipment generally is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by the straight-line
method over the estimated useful life of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql asset. Depreciation as a percent
of average depreciable property approximated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.9% for 2001, 2.9% for 2000 and
2.8% for 1999.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor capitalizes computer softw
are costs in accordance with Statement of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Position 98-1, "Accounting for t
he Costs of Computer Software Developed or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obtained for Internal Use." Thes
e costs are being amortized over periods ranging
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from five to seven years.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income Taxes -- Oncor's operatio
ns are included in the consolidated federal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income tax return of TXU, and fe
deral income taxes are allocated to subsidiaries
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of TXU based upon their respecti
ve taxable income or loss. Investment tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credits are amortized to income
over the estimated service lives of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties. Deferred income taxe
s are provided for temporary differences between
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the book and tax basis of assets
and liabilities. Certain provisions of SFAS No.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 109, "Accounting for Income Taxe
s", provide that regulated enterprises are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted to recognize such defe
rred taxes as regulatory tax assets or tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities if it is probable th
at such amounts will be recovered from, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql returned to, customers in future
rates.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash Equivalents -- For purposes
of reporting cash and cash equivalents,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql temporary cash investments purch
ased with a remaining maturity of three months
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or less are considered to be cas
h equivalents.
-- SFAS No. 133, "Accounting for Derivative
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instruments and Hedging Activiti
es", as extended by SFAS No. 137 and amended by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 138, became effective f
or Oncor on January 1, 2001. SFAS No. 133
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql establishes accounting and repor
ting standards for derivative instruments,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including certain derivative ins
truments embedded in other contracts, and for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hedging activities. It requires
the recognition of derivatives in the balance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sheet and the measurement of tho
se instruments at fair value.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor had no derivatives at Dece
mber 31, 2001 and 2000. Therefore, adoption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of SFAS No. 133 as of January 1,
2001 had no effect on its combined financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 140, "Accounting for Tr
ansfers and Servicing of Financial Assets
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Extinguishments of Liabiliti
es", became effective for Oncor for transfers on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or after April 1, 2001. SFAS No.
140 revises the standard for accounting for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securitizations and other transf
ers of financial assets and collateral and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires additional disclosures,
which have been incorporated in the financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements. The adoption of SFAS
No. 140 did not affect reported results.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 141, "Business Combinat
ions", became effective for Oncor on July
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1, 2001. SFAS No. 141 requires t
he use of the purchase method of accounting for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business combinations initiated
and completed after June 30, 2001 and eliminates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the use of the pooling-of-intere
sts method.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 142, "Goodwill and Othe
r Intangible Assets", became effective for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor on January 1, 2002. SFAS N
o. 142 requires, among other things, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocation of goodwill to report
ing and the discontinuance of goodwill
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amortization.
or impairment on an annual basis or on an
elow its carrying value. Any goodwill impairment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql loss during the transition perio
d will be recognized as the cumulative effect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a change in accounting principle
. Subsequent impairments, if any, will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recorded in operations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets. The offset to any liabil
ity recorded is added to the previously recorded
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql asset and the additional amount
is depreciated over the same period as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long-lived asset for which the r
etirement obligation is established. SFAS No.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 143 also requires additional dis
closures.
s related to SFAS No. 121.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For standards not yet adopted, O
ncor is evaluating the potential impact on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its financial position and resul
ts of operations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. REGULATIONS, RATES AND REST
RUCTURING OF THE ELECTRIC UTILITY INDUSTRY IN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TEXAS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1999 RESTRUCTURING LEGISLATION - Legislation passed during the 1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql session of the Texas Legislature
restructured the electric utility industry in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas and provided for a transit
ion to competition. Among other matters with

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting consequences, the leg
islation:
provided that by January 1,
2002, each electric utility had to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unbundle its business into the f
ollowing units: a power generation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company, a REP and a T&D company
or separate T&D companies;
authorized competition begi
nning January 1, 2002 in the retail and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation markets for electrici
ty;
provides for the recovery o
f generation-related regulatory assets and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation-related and purchased
power-related costs that are in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql excess of market value (stranded
costs);*
provides for a true-up in 2
004 of stranded costs based on market
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determinations;* and
provides for a reduction in
T&D rates (as a retail clawback) in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain circumstances described
below.*
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * The application of these provi
sions to US Holdings will change in the event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the settlement plan proposed to
the PUCT is approved. See Regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Settlement Plan below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGULATORY SETTLEMENT PLAN -- On
December 31, 2001, US Holdings filed a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement plan with the PUCT th
at, if approved, will resolve all major pending
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issues related to US Holdings' t
ransition to competition and will supersede
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain ongoing lawsuits and reg
ulatory proceedings that are principally related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to deregulation. The settlement
plan has the endorsement of the major customer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql groups in the State of Texas. Pa
rties to the settlement include the PUCT staff,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Office of Public Utility Cou
nsel, a coalition of cities served by Oncor,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas Industrial Energy Consumer
s, Texas Retailers Association, and a new REP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the state. The settlement pl
an does not remove regulatory oversight of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's business. The settlement
plan must be approved by the PUCT, which has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held a hearing and has received
briefs from the parties. A decision could be

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made as early as April 18, 2002.
While Oncor is unable to predict the outcome of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these proceedings, under the Bus
iness Separation Agreement, TXU Energy has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed to hold Oncor harmless fr
om the results of any disallowance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generation-related items, such a
s securitization of regulatory assets, stranded
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql costs and fuel reconciliation. O
ncor does not believe that its net financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results will be materially affec
ted if the settlement plan is not approved.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The major terms of the settlemen
t plan relating to Oncor are:
Transmission and Distributi
on Rates -- In 2002, Oncor will implement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an excess mitigation credit (EMC
) in the amount of $350 million (plus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest), applied over a two-ye
ar period as a reduction to T&D rates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charged to REPs. This amount ref
lects resolution of stranded cost
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mitigation, approximately $8.2 b
illion of fuel costs covering the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of July 1998 through 2001
, the unrecovered fuel balance at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 31, 2001, and other ite
ms. Oncor's sole responsibility with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to those matters will be
to act as collection or disbursement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agent, and Oncor has no rights o
r obligations with respect to any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts collected or refunded.
Regulatory Asset Securitiza
tion -- Oncor will receive a financing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order authorizing it to issue se
curitization bonds in the aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of $1.3 billion to moneti
ze and recover generation-related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory assets. The settlemen
t provides that there will be an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql initial issuance of securitizati
on bonds in the amount of up to $500
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million upon approval of the set
tlement followed by a second issuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the remainder after 2003. Th
is settlement resolves all issues
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related to generation-related re
gulatory assets and liabilities.
Lawsuit and Regulatory Proc
eeding Resolution-- The parties agree to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seek dismissal of a number of pe
nding lawsuits and regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IMPLEMENTATION OF THE 1999 RESTR
UCTURING LEGISLATION -- As noted in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate sections of the foll
owing discussion, the settlement plan filed with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the PUCT by US Holdings, if adop
ted, will result in final determination
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning certain provisions of
the legislation. If the settlement plan is not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved, certain other proceedi
ngs discussed below will not be resolved.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmission and Distribution Ra
tes -- All REPs operating in Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificated service area, inclu
ding TXU Energy, pay the same rates and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges for distribution service
s. All other distribution companies in ERCOT pay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor the same rates and other c
harges for transmission services. Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution rates are based on
amounts of energy delivered. Transmission rates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are "postage stamp" rates that d
o not vary with the distance of energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitted. The transmission an
d distribution rates that are in effect as of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2002 for Oncor are ba
sed upon the resolution of US Holdings' rate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case brought before the PUCT, wh
ich is discussed below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mitigation (see Regulatory Settl
ement Plan above) -- From January 1, 1998
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through June 30, 1999, US Holdin
gs' earnings of $170 million in 1998 and $52
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million in 1999 in excess of the
regulatory earnings cap (mitigation) were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recorded as additional depreciat
ion of nuclear production assets. Effective July
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1, 1999, following the 1999 Rest
ructuring Legislation, all of US Holdings' and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU SESCO's earnings in excess o
f the regulatory earnings cap of $92 million in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1999, $310 million in 2000 and $
40 million in 2001 were recorded as a reduction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of US Holdings' and TXU SESCO's
revenues, with a corresponding regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability recorded.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On June 4, 2001, the PUCT issued
an interim order that addressed Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges for T&D service when ret
ail competition would begin. Among other things,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that interim order and subsequen
t final order issued on October 3, 2001 required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor to refund through reduced

rates (which will necessitate a corresponding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reimbursement from TXU Energy),
over the period from 2002-2008, both the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1998-2000 earnings in excess of
the regulatory earnings cap and an estimate of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 2001 earnings in excess of t
he regulatory earnings cap. On June 20, 2001, US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings filed a petition with t
he Texas Supreme Court, requesting that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court issue a writ of mandamus c
ompelling the PUCT to vacate the portions of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql orders that require US Holdings
to halt mitigation of stranded costs and reverse
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the stranded cost mitigation alr
eady taken. On December 31, 2001, the Supreme
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court of Texas denied the petiti
on. The PUCT's decision continues to be under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appeal to the Travis County, Tex
as District Court.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stranded Cost Recovery (see Regu
latory Settlement Plan above) -- In October
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1999, US Holdings filed an appli
cation with the PUCT for a financing order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Docket No. 21527) to permit the
issuance by a special purpose entity of $1.65
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion of transition bonds secu
red by payment in the form of a non-bypassable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charge from retail customers. On
May 1, 2000, the PUCT signed a final order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rejecting US Holdings' request f
or the $1.65 billion and authorized only $363
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million. US Holdings filed an ap
peal on May 2, 2000, with the Travis County,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas District Court. On Septemb
er 7, 2000, the District Court issued a final
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql judgment that reversed part of t
he PUCT's financing order, affirmed other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aspects of the PUCT's financing
order, and ordered the case remanded to the PUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for further proceedings consiste
nt with the judgment. US Holdings and various
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other parties appealed this judg
ment directly to the Supreme Court of Texas. On
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 6, 2001, the Supreme Court
of Texas issued what US Holdings believes is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql favorable ruling that should all
ow Oncor to issue transition bonds of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately $1.3 billion. On O
ctober 18, 2001, the Supreme Court remanded the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case to the PUCT for determinati
on of the final amount of permitted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securitization. The PUCT has beg
un the remand proceeding (Docket No. 24892).

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor cannot predict when it wil
l be completed, but is prepared to move quickly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with the issuance
of transition bonds once a final financing order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is issued by the PUCT. If the re
gulatory settlement plan described above is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved by the PUCT, issues inv
olving securitization will be resolved.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As noted above, the principal an
d interest on the transition bonds would be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured by payments from retail
consumers designed to enable recovery of
approximately $1.84 billion. Once transition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonds are issued, the full amoun
t of the regulatory assets will be amortized to
f the transition bonds. Any amount of the $1.84
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion which is in excess of th
e cash flows from transition bonds will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expensed at the time such shortf
all, if any, is determined.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OPEN-ACCESS TRANSMISSION -- At t
he federal level, Federal Energy Regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission (FERC) Order No. 888
requires all FERC-jurisdictional electric public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utilities to offer third parties
wholesale transmission services under an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql open-access tariff.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporated and the City Public
Service Board of San Antonio each filed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. SHORT-TERM FINANCING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is provided short-term fin
ancing by TXU or affiliated companies.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor had short-term advances fr
om affiliates of $108 million and $842 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of December 31, 2001 and 2000
, respectively. Average short-term borrowings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding from affiliates were
$475 million and $859 million during 2001 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2000, respectively. Weighted ave
rage interest rates on advances were 3.08% and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.36% on December 31, 2001 and 2
000, respectively.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. LONG-TERM DEBT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Long-term debt represents the po
rtion of US Holdings' debt outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the periods that was allo
cated to Oncor. Interest expense on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocated debt reflects interest
associated with the historical debt of US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings supporting the T&D busi
ness, primarily using a blend of prevailing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql short-term and long-term weighte
d-average interest rates.
2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql First Mortgage Bonds:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Fixed rate (6.25% to 8.875% due
2002 to 2025).................
$1,978
$2,251
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Variable rate (2.47% due 2003)..
..............................
400
575
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Long-term advances from affiliat
es.................................
1,200
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Other ..........................
...................................
74
143
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total long-term debt............
...........................
3,652
2,969
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Less amounts due currently......
...................................
370
217
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total long-term debt, less amoun
ts due currently...........
$3,282
$2,752
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql US Holdings' first mortgage bond
s are secured by a mortgage with a major
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial institution. Upon tran
sfer of US Holdings' T&D assets to Oncor, Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assumed US Holdings' mortgage an
d the first mortgage bonds outstanding
\page
on of advances from affiliates have been
ause Oncor currently anticipates refinancing
debt to be issued during 2002. Oncor has no
anticipate repayment of these advances within
not occur. The interest rate on long-term
8% as of December 31, 2001.
ements for the years 2002 through 2006
outstanding at December 31, 2001 were as
........
$370
........
704
........
220
........
92
........
-\par\pard\plain\fs16
oration in November 2001. As of December
shares of no par value common stock authorized,
issued and outstanding.
Holdings determined that the initial
ry 1, 2002 should consist of approximately 40%
t (total debt and advances from affiliates) to
which the T&D rates approved by the PUCT are
of advances from affiliates were converted to
thereunder.
F-13
At December 31, 2001, $1.2 billi

classified as long-term debt bec
these borrowings with long-term
obligation to repay and does not
12 months should the refinancing
advances from affiliates was 3.0
Sinking fund and maturity requir
under long-term debt instruments
follows:
2002 ...........................
2003 ...........................
2004 ...........................
2005 ...........................
2006 ...........................
6.
SHAREHOLDER'S EQUITY
Oncor was formed as a Texas corp

31, 2001, Oncor had 100 million
and 1,000 shares of common stock
As part of its restructuring, US
capitalization of Oncor at Janua
shareholder's equity and 60% deb
match the capital structure upon
based. Accordingly, $396 million
capital during 2001.
7.
INCOME TAXES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The components of income tax exp

ense are as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Charged (credited) to operating
expenses:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Current:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Federal.........................
..................................
$ 83
$135
$(38)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State...........................
..................................
1
7
1
.............................
84
142
(37)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Deferred:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Federal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depreciation differences and cap
italized construction costs.....
14
19
71
................................
25
(38)
71
.............................
39
(19)
142
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Investment tax credits..........
....................................
(5)
(5)
(5)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total to operating expenses.....
.............................
118
118
100
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Charged to other income:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Current - Federal...............
.................................
1
2
6
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total ..........................
............................
$119
$120
$106
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ====
====
====
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reconciliation of income taxes c
omputed at the US federal statutory rate to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision for income taxes:
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income before income taxes......
......................................
$347
$346
$329
====
====
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income taxes at the US federal s
tatutory rate of 35%..................
$121
$121
$115
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amortization of investment tax c
redits.............................
(5)
(5)
(5)
...................................
3
4
(4)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income tax expense..............
......................................
$119
$120
$106
====
===
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective tax rate..............
......................................
34%
35%
32%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The components of Oncor's deferr
ed tax assets and deferred tax liabilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -----------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql 2001
2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ---------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql TOTAL
CURRENT
NONCURREN
T
TOTAL
CURRENT
NONCURRENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql DEFERRED TAX ASSETS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Alternative minimum tax.........
.............
$ 76
$ -$ 76
$ 105
$ -$ 105
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Employee benefits...............
.............
74
-74
66
-66
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Deferred benefits of state incom
e taxes......
10
-10
50
-50
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Regulatory liability............
.............
124
-124
141
-141
.............
99
15
84
102
14
88
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total deferred tax assets.......
.........
383
15
368
464
14
450
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql DEFERRED TAX LIABILITIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Depreciation differences and cap

italized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql construction costs..............
...........
832
-832
850
-850
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Securitizable regulatory assets.
.............
633
-633
559
-559
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Deferred state income taxes.....
.............
18
-18
96
-96
.............
100
11
89
74
12
62
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total deferred tax liability....
.........
1,583
11
1,572
1,579
12
1,567
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql NET DEFERRED TAX (ASSET) LIABILI
TY ..........
$1,200
$ (4)
$1,204
$1,115
$ (2)
$1,117
======
======
======
======
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -----------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql 2001
2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ---------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql NET
NET
NET
NET
NET
NET
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql CURRENT
CURRENT
NONCURRE
NT
CURRENT
CURRENT
NONCURRENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ASSET
LIABILITY
LIABILITY
ASSET
LIABILITY
LIABILITY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ----------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql SUMMARY OF DEFERRED INCOME TAXES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql US Federal......................
.............
$
4
$ -$1,192
$ -$
2
$1,026
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql State...........................
.............
--12
4
-91
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total...........................
.........
$
4
$ -$1,204
$
4
$
2
$1,117
======
======
======
======
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At December 31, 2001, Oncor had
approximately $76 million of alternative
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minimum tax credit carryforwards

available to offset future tax payments.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's income tax returns are s
ubject to audit by applicable tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorities. The IRS is currentl
y examining the returns of TXU and its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries for the tax years e
nded 1993 through 1997. In management's opinion,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an adequate provision has been m
ade for any future taxes that may be owed as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result of any audits.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. RETIREMENT PLANS AND OTHER
POSTRETIREMENT BENEFITS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is a participating employe
r in the TXU Retirement Plan (Retirement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan), a defined benefit pension
plan sponsored by TXU. The Retirement Plan is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualified pension plan under Sec
tion 401(a) of the Internal Revenue Code of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1986, as amended (Code), and is
subject to the provisions of the Employee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retirement Income Security Act o
f 1974, as amended (ERISA). Employees are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible to participate in the R
etirement Plan upon their completion of one year
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of service and the attainment of
age 21. All benefits are funded by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participating employers. The Ret
irement Plan provides benefits to participants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under one of two formulas: (i) a
cash balance formula under which participants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earn monthly contribution credit
s based on their compensation and years of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service, plus monthly interest c
redits, or (ii) a traditional defined benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formula based on years of servic
e and the average earnings of the three years of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql highest earnings. At December 31
, 2001, the fair value of Retirement Plan assets
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was $3.3 billion and the total o
f pension obligations, including net actuarial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql losses, was $3.0 billion, discou
nted at 7.5%.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All eligible employees hired aft
er January 1, 2002 will participate under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the cash balance formula. Certai
n employees who, prior to January 1, 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participated under the tradition
al defined benefit formula, continue their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participation under that formula
. Under the cash balance formula, future
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increases in earnings will not a
pply to prior service costs. It is TXU's policy

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to fund the plans on a current b
asis to the extent deductible under existing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal tax regulations. Such co
ntributions, when made, are intended to provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not only for benefits attributed
to service to date, but also those expected to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be earned in the future.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The allocated net periodic pensi
on cost (benefit) applicable to Oncor was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $(14) million for 2001, $(15) mi
llion for 2000 and $8 million for 1999.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Estimated accrued pension cost a
pplicable to Oncor as of December 31, 2001 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2000 was $25 million and $41 mil
lion, respectively. Contributions were $1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million, $1 million and $14 mill
ion in 2001, 2000 and 1999, respectively.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition, Oncor's employees a
re eligible to participate in a qualified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql savings plan, the TXU Thrift Pla
n (Thrift Plan). This plan is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant-directed defined con
tribution profit sharing plan qualified under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 401(a) of the Code, and
is subject to the provisions of ERISA. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thrift Plan includes an employee
stock ownership component. Under the terms of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Thrift Plan, as amended effe
ctive January 1, 2002, employees who do not earn
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more than the IRS threshold comp
ensation limit used to determine highly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compensated employees may contri
bute, through pre-tax salary deferrals and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after-tax payroll deductions, a
specified amount of compensation ranging from 1%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to 20%. Employees who earn more
than such threshold may contribute from 1% to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16% of their compensation. Emplo
yer matching contributions are also made in an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to 100% of employee
contributions up to 6% of compensation for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees who participate under
the cash balance formula of the Retirement Plan,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 75% of employee contribution
s up to 6% of compensation for employees who
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participate under the traditiona
l defined benefit formula of the Retirement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. Employer matching contribu
tions are invested in TXU common stock.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contributions to the Thrift Plan
by TXU aggregated $16 million for 2001 and $15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million for 2000 and 1999.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition to the Retirement Pl
an and the Thrift Plan, Oncor participates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with TXU and certain other affil
iated subsidiaries of TXU to offer certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql health care and life insurance b

enefits to eligible employees and their eligible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dependents upon the retirement o
f such employees from TXU. For employees
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retiring on or after January 1,
2002, the retiree contributions required for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such coverage vary based on a fo
rmula depending on the retiree's age and years
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of service. The estimated net pe
riodic postretirement benefit cost related to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor for these plans was $27 mi
llion in 2001, $27 million in 2000 and $44
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million in 1999. Estimated accru
ed postretirement benefits obligations as of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 31, 2001 and 2000 were
$115 million and $108 million, respectively.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contributions paid by Oncor to f
und postretirement benefits other than pensions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were $20 million, $19 million an
d $21 million in 2001, 2000 and 1999,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively. At December 31, 20
01, the fair value of assets of the TXU plan was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $190 million, and the total of b
enefit obligations, including net actuarial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gains and losses, was $506 milli
on.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The liabilities for accrued pens
ion cost and accrued post-retirement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits cost were based on esti
mates of retired employees by company. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql estimated liabilities for accrue
d pension cost and accrued postretirement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits cost recorded may be su
bject to revision based on the final actuarial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determinations, resulting in an
increase or decrease in advances to or from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliates.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. FAIR VALUE OF FINANCIAL INS
TRUMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The carrying amounts and related
estimated fair values of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql significant financial instrument
s as of December 31, 2001 were as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DECEMBER 31, 2001
DECEMBER 3
1, 2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CARRYING
FAIR
CARRYING
FAIR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMOUNT
VALUE
AMOUNT
VALUE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ON BALANCE SHEET LIABILITIES:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Long-term debt (including curren
t maturities)........
$3,652
$3,682
$2,969
$2,991
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The fair values of long-term deb
t are estimated at the lesser of either the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql call price or the market value a
s determined by quoted market prices, where
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available, or, where not availab
le, at the present value of future cash flows
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discounted at rates consistent w
ith comparable maturities with similar credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql risk. The carrying amounts for f
inancial assets and liabilities classified as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current approximate fair value d
ue to the short maturity of such instruments.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. COMMITMENTS AND CONTINGENCI
ES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases -- Oncor has entered into
operating leases covering various
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities and properties includ
ing transportation equipment, data processing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment and office space. Cert
ain of these leases contain renewal and purchase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options and residual value guara
ntees. Lease costs charged to operating expense
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for 2001, 2000 and 1999 were $15
million, $16 million and $15 million,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Future minimum lease commitments
under operating leases that have initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or remaining noncancellable leas
e terms in excess of one year as of December 31,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001, were as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002............................
....................
$ 4
....................
4
....................
3
....................
3
....................
3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thereafter......................
....................
15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total future minimum lease payme
nts..............
$32
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ===
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsequent to December 31, 2001,
Oncor entered into a twelve-year operating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lease agreement for office facil
ities effective August 1, 2002. Minimum lease
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commitments under this agreement
are $1 million beginning in 2004, $3 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each year in 2005 and 2006, and
$22 million thereafter.
s, TXU Gas Company and TXU. The petition alleges
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and TXU entered into a M
emorandum of Understanding with the plaintiffs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to settle this lawsuit, subject
to the execution of a definitive settlement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement. Oncor believes the al
legations in this suit are without merit and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intends to vigorously defend thi
s suit if no settlement is reached, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql management does not believe the
ultimate resolution of this suit will have a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material effect on Oncor's finan
cial position, results of operation or cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flows.
tion of which, in the opinion of management,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql should not have a material effec
t upon its financial position, results of
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. SUPPLEMENTARY FINANCIAL INF
ORMATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Credit Risk -- Credit risk relat

es to the risk of loss that Oncor would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incur as a result of nonpayment
by its customers. Following deregulation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's customers consist primar
ily of REPs. As a requisite for obtaining and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintaining certification, a REP
must meet the financial resource standards
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established by the PUCT. REP cer
tificates granted by the PUCT are subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suspension and revocation for si
gnificant violation of the Public Utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulatory Act and PUCT rules. S
ignificant violations include failure to timely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remit payments for invoiced char
ges to a T&D utility pursuant to the terms of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tariffs adopted by the PUCT. Add
itionally, the PUCT's ratemaking policies and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practices permit recovery of ann
ual bad debt charge-offs through approved
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tariffs. Since most of the T&D s
ervices provided and invoiced by Oncor are to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its affiliated REPs, a material
loss to Oncor arising from nonpayment by its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers is considered unlikely
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts Receivable -- At Decemb
er 31, 2001 and 2000, accounts receivable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are stated net of uncollectible
accounts of $4 million and $2 million,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sale of Receivables -- Prior to
January 1, 2002, US Holdings and TXU Gas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company sold certain customer ac
counts receivable to a wholly-owned,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy-remote unconsolidated
subsidiary of TXU Corp. (TXU Receivables
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company), which sells undivided
interests in accounts receivable it purchases to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial institutions. As of Ja
nuary 1, 2002, the facility was amended to add
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Energy Retail Company LP, TX
U SESCO Energy Services Company and Oncor as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualified originators of account
s receivable under the program. TXU Receivables
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may sell up to an aggreg
ate of $600 million in undivided interests in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the receivables purchased from t
he originators under the program. As of December
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31, 2001, Oncor's portion of US
Holdings' receivables sold to TXU Receivables
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company then outstanding under t
he program was $231 million. The receivables
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were sold in exchange for cash o
f $125 million and $104 million in subordinated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notes issued to the originators,
with $2 million representing costs of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql program since inception in Augus
t 2001. Annualized costs of the program

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximated 3.7% of the cash pr
oceeds from the receivables sales. As of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 31, 2000, Oncor's porti
on of US Holdings' receivables sold under a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior facility was $110 million.
The subordinated notes receivable from TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Receivables Company are included
in accounts receivables in the consolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balance sheet.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, Plant and Equipment -\par\pard\plain\fs16
2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Transmission....................
...................................
$1,982
$1,771
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Distribution....................
...................................
6,138
5,831
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Other ..........................
...................................
433
370
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total...........................
..............................
8,553
7,972
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Less accumulated depreciation...
...................................
2,922
2,704
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Net of accumulated depreciation.
..............................
5,631
5,268
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Construction work in progress...
...................................
149
155
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Property held for future use....
...................................
22
22
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Net property, plant and equipmen
t.............................
$5,802
$5,445
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capitalized software costs of $1
31 million at December 31, 2001 are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in other property, plan
t and equipment. Amortization expense of $7
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million and $12 million related
to software costs was recorded in 2001 and 2000,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliate Transactions -- In add
ition to the accounts receivable program
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with TXU Receivables Company, On
cor enters into transactions with TXU and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliates. Interest expense rel
ated to advances from TXU and other affiliates

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was $40 million, $54 million and
$43 million for 2001, 2000 and 1999,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively. TXU, through an af
filiate, billed Oncor $197 million, $176 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and $170 million for 2001, 2000
and 1999, respectively, for financial,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting, information technolo
gy, environmental, procurement and personnel
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services and other administrativ
e services at cost. Also, Oncor billed a net of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $43 million, $74 million, and $9
4 million for 2001, 2000, and 1999,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively, to TXU and other a
ffiliates primarily for employee services and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other administrative services at
cost.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Based on the Business Separation
Agreement, Oncor has receivables due from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Energy arising from the rest
ructuring of US Holdings to form Oncor and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy as follows (see Note 1):
Mitigation - Under the term
s of the settlement plan discussed in Note
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3, Oncor will implement an exces
s mitigation credit of $350 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with interest, to be returned to
REPs, including TXU Energy, over a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql two-year period beginning Januar
y 1, 2002. TXU Energy will reimburse
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor for the credit and related
interest. Oncor's financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements reflect the $350 mill
ion due from TXU Energy and a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory liability for the exc
ess mitigation credit.
Securitization - Under the
terms of the settlement plan, Oncor will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue securitization bonds of $1
.3 billion. The incremental income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes Oncor will pay on the reve
nue associated with the non-bypassable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charge to customers related to t
he bonds will be reimbursed by TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy. Therefore, Oncor's finan
cial statements reflect a $437 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receivable from TXU Energy that
will be extinguished as Oncor pays the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related income taxes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Supplemental Cash Flow Informati
on --
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash payments/(refunds):
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest (net of AFUDC).........
................................
$261
$251
$282
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income taxes....................
................................
33
125
(33)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-cash financing activities:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Conversion of advances to capita
l ..............................
396
--\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-cash advances from affiliate
s...............................
(101)
47
113
s -- Oncor's regulatory assets
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (liabilities) consist of those t
ransferred from TXU Energy related to generation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and those arising fro
m its T&D operations.
2000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Under-recovered fuel............
....................................
$ -$ 852
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Mitigation......................
....................................
(350)
(396)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Investment tax credit related an
d protected excess deferred taxes...
-(250)
....................................
-49
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total generation-related........
...............................
(350)
255
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Subject to securitization.......
....................................
1,841
1,865
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Securities reacquisition costs .
....................................
116
128
....................................
(2)
18
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total T&D-related...............
...............................
114
146
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Net regulatory assets...........
...............................
$1,605
$2,266
======
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDENSED STATEMENTS OF CONSOLID
ATED INCOME
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (UNAUDITED)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THREE MONTHS ENDED
SIX MONT
HS ENDED
JUNE 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002
2001
2002
2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MILLIONS OF DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operating revenues..............
.....................
$ 500
$ 529
$ 994
$1,005
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operating expenses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operation and maintenance.......
...................
189
217
367
402
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depreciation and amortization...
...................
67
58
131
118
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income taxes ...................
...................
29
19
62
29
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Taxes other than income.........
...................
92
125
187
249
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total operating expenses........
.................
377
419
747
798
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operating income................
.....................
123
110
247
207
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest income -- affiliates...
.....................
11
-23
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other income ...................
.....................
1
1
2
3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other deductions................
.....................
1
1
3
3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonoperating income taxes.......
.....................
4
-6
-\par\pard\plain\fs16
es...................
65
70
127
143
.....................
$ 65
$ 40
$ 136
$ 64
ATED COMPREHENSIVE INCOME
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THREE MONTHS ENDED
SIX MONT
HS ENDED
JUNE 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002
2001
2002
2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MILLIONS OF DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net income
$ 65
$ 40
$ 136
$ 64
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other comprehensive income (loss
) -\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net change during period, net of
tax effect:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flow hedges:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cumulative transition adjustment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of January 1, 2001...........
.............
----\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net change in fair value of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql derivatives (net of tax benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of $14, $--, $14 and $--).......
.............
(26)
-(25)
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total...........................
.............
(26)
-(25)
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Comprehensive income............
.......................
$ 39
$ 40
$ 111
$ 64
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------
----\par\pard\plain\fs16
s.
\page
ATED CASH FLOWS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIX MONTHS ENDED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002
2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MILLIONS OF DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows-- operating activitie
s
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net income .....................
......................................
$ 136
$ 64
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Adjustments to reconcile net inc
ome to cash provided by (used in)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operating activities:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depreciation and amortization ..
...................................
145
125
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Deferred income taxes and invest
ment tax credits-- net ............
67
(7)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Changes in operating assets and
liabilities ..........................
(417)
17
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash provided by (used in) opera
ting activities ..............
(69)
199
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash flows-- financing activitie
s
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Issuance of long-term debt .....
...................................
1,200
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retirements/repurchases of debt
...................................
(352)
(30)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Repurchase of common stock .....
...................................
(50)
(189)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net issuances of commercial pape
r .................................
295
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net increase (decrease) in advan
ces from affiliates ...............
(734)
370
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debt premium, discount, financin
g and reacquisition expenses ......
(20)
(2)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash provided by financing activ
ities ........................
339
149
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------
s
...................................
(265)
...................................
(39)
s ............................
(304)
valents .................................
nning balance ...........................
ng balance ..............................
$
s.
\page
HEETS
MILLIONS OF DOLLARS
.............................
$
1
..........................
268
..........................
63
es -- at average cost..........
38
ortion.........................
221
...............................
60
Cash flows-- investing activitie

Capital expenditures ...........
(356)
Other ..........................
(5)
----------Cash used in investing activitie
(361)
----------Net change in cash and cash equi
(34)
(13)
Cash and cash equivalents-- begi
35
22
----------Cash and cash equivalents-- endi
1
$
9
======
======
See Notes to Financial Statement
F-21
ONCOR ELECTRIC DELIVERY COMPANY

CONDENSED CONSOLIDATED BALANCE S
JUNE 30, 2002

(UNAUDITED)
------------ASSETS
DECEMBER 31,
2001
------------
Current assets
Cash and cash equivalents.......
$ 35
Accounts receivable
Affiliates......................
-Trade...........................
131
Materials and supplies inventori
38
Due from TXU Energy -- current p
170
----------Other current assets............
36
----------Total current assets............
..........................
651
...............................
53
net...........................
5,940
...............................
519
...............................
1,658
...............................
24
...............................
$8,845
UITY
r...........................
$ 295
............................
950
............................
128
.........................
.........................
49
............................
............................
137
............................
57
............................
90
.........................
1,706
s..............................
1,249
...............................
76
rrent liabilities..............
210
currently.....................
2,842
...............................
2,762
410
Investments.....................
54
Property, plant and equipment -5,802
Due from TXU Energy.............
617
Regulatory assets -- net........
1,605
Deferred debits and other assets
7
----------Total assets....................
$8,495
======
======
LIABILITIES AND SHAREHOLDER'S EQ
Current liabilities
Notes payable -- commercial pape
$ -Long-term debt due currently....
370
Advances from affiliates........
108
Accounts payable
Affiliates......................
43
Trade...........................
50
Customer deposits...............
81
Taxes accrued...................
170
Accrued interest................
54
Other current liabilities.......
130
----------Total current liabilities.......
1,006
Accumulated deferred income taxe
1,204
Investment tax credits..........
79
Other deferred credits and noncu
223
Long-term debt, less amounts due
3,282
Contingencies (Note 6)
Shareholder's equity (Note 5)...
2,701
-----------
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total liabilities and shareholde

r's equity...............
$8,845
$8,495
======
s.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTES TO FINANCIAL STATEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. BUSINESS
(Oncor) was formed as a Texas corporation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the fourth quarter of 2001, o
riginally as TXU Electric Delivery Company, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was renamed effective January 17
, 2002. Oncor was created as a result of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restructuring of the electric ut
ility industry in Texas, which became effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2002. Oncor consists
of the regulated electric transmission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution businesses transfer
red from TXU US Holdings Company (US Holdings),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formerly TXU Electric Company, a
nd TXU SESCO Company (TXU SESCO) effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1, 2002. Oncor is a whol
ly-owned subsidiary of US Holdings, which is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly-owned subsidiary of TXU C
orp. (TXU).
onsist of municipalities, electric cooperatives
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other distribution companies
. Oncor's distribution customers consist of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 35 retail electric
providers (REPs) in Oncor's certificated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service area, including a subsid
iary REP of TXU Energy Company LLC (TXU Energy),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is another wholly-owned su
bsidiary of US Holdings. Revenues from TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy represent the substantial
majority of Oncor's revenues. Oncor is managed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a single, integrated electric
delivery business; consequently there are no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql separate reportable business seg
ments.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Restructuring - Legisla
tion was passed during the 1999 session of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Texas Legislature that restr

uctured the electric utility industry in Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1999 Restructuring Legislation)
. As a result, TXU restructured certain of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql businesses as of January 1, 2002
. In order to satisfy its obligations to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unbundle its business pursuant t
o the 1999 Restructuring Legislation and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consistent with its business sep
aration plan as approved by the Public Utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission of Texas (Commission)
, as of January 1, 2002, US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred:
its electric transmission a
nd distribution (T&D) assets to Oncor;
its unregulated electric po
wer production assets to subsidiaries of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Energy; and
its retail customers to an
unregulated subsidiary REP of TXU Energy.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Also, on January 1, 2002 the T&D
assets of TXU SESCO, a subsidiary of TXU,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were transferred to Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The relationships of the entitie
s affected by the restructuring and their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and obligations with resp
ect to their collective assets and liabilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are contractually described in a
master separation agreement executed in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 2001 (Business Separati
on Agreement).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. SIGNIFICANT ACCOUNTING POLI
CIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Basis of Presentation - The T&D
operations that comprise Oncor were part of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fully integrated public util
ity businesses of US Holdings and TXU SESCO,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which were subsidiaries of TXU u
nder common ownership and control for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql periods presented prior to Janua
ry 1, 2002. The financial statements of Oncor as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of December 31, 2001 and for the
three and six months ended June 30, 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present the financial position,
results of operations and cash flows of the T&D
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations of US Holdings and TX
U SESCO that were combined. The financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements for periods subsequen
t to January 1, 2002 present Oncor's actual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operating results. Effective Jan
uary 1, 2002, in connection with the transfer of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql US Holdings' retail customers to
an unregulated subsidiary REP of TXU Energy,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain assets and liabilities r

elating to the retail function, which was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously integrated with Oncor
's regulated operations, were transferred from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor to TXU Energy.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The prior year financial informa
tion for Oncor includes information derived
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the historical financial st
atements of US Holdings. Reasonable allocation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql methodologies were used to unbun
dle the financial statements of US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between its power production and
T&D operations. Allocation of revenues
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflected consideration of retur
n on invested capital, which continues to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulated for the T&D operations
. US Holdings maintained expense accounts for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of its component operations
. Costs of energy and expenses related to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and maintenance and d
epreciation and amortization, as well as assets,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such as property, plant and equi
pment, materials and supplies and fuel, were
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically identified by compo
nent operation and disaggregated. Various
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocation methodologies were us
ed to disaggregate common expenses, assets and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities between US Holdings'
power production and T&D operations. Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other financing costs were d
etermined based upon debt allocated. Had the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unbundled operations of US Holdi
ngs actually existed as separate entities, their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results of operations could have
differed materially from those included in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql historical financial statements
included herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The condensed consolidated finan
cial statements of Oncor have been prepared
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with accounting pr
inciples generally accepted in the United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of America (US GAAP). In the opi
nion of management, all adjustments (consisting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of normal recurring accruals) ne
cessary for a fair presentation of the results
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of operations and financial posi
tion have been included therein. Certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information and footnote disclos
ures normally included in annual consolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements prepared in
accordance with US GAAP have been omitted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the rules and regula
tions of the Securities and Exchange Commission.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The results of operations for an
interim period may not give a true indication
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of results for the full year. Ce
rtain previously reported amounts have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reclassified to conform to curre
nt classifications. All intercompany items and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transactions between the combine
d companies have been eliminated. All dollar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts in the financial stateme
nts and notes to financial statements are stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in millions of US dollars unless
otherwise indicated.
T&D fees are recognized when services are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided to customers on the bas
is of periodic cycle meter readings and include
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an estimated accrual for the val
ue of electricity delivery fees from the meter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reading date to the end of the p
eriod.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income Taxes - Oncor is included
in the consolidated federal income tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql return of TXU and subsidiary com
panies. Oncor uses the separate return method to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compute its income tax provision
. Because of the alternative minimum tax (AMT),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql differences may arise between th
e consolidated federal income tax liability and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the aggregated separate tax liab
ility of the group members. In instances where
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this occurs, the difference is a
llocated pro-rata to those companies that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generated AMT on a separate comp
any basis.
- Statement of Financial Accounting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Standards (SFAS) No. 142, "Goodw
ill and Other Intangible Assets", became
, 2002. SFAS No. 142 requires, among other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql things, the allocation of goodwi
ll to reporting units based upon the current
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair value of the reporting unit
s and the discontinuance of goodwill
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amortization. The amortization o
f Oncor's existing goodwill ($0.8 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annually) ceased effective Janua
ry 1, 2002.
or impairment on an annual basis, or on an

elow its carrying value. Oncor has completed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transitional impairment test, th
e results of which indicated no impairment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql goodwill. If goodwill amortizati
on had ceased effective January 1, 2001, there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would not have been a material e
ffect on net income for the three or six months
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended June 30, 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets. SFAS No. 143 also requir
es additional disclosures. Oncor will conform
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its accounting for asset retirem
ent obligations to the new standard.
s related to SFAS No. 121. The adoption of SFAS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 144 by Oncor has not affecte
d its financial position or results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 145, "Rescission of FAS
B Statements No. 4, 44 and 64, Amendment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FASB Statement No. 13, and Techn
ical Corrections", was issued in April 2002 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be effective for Oncor on J
anuary 1, 2003. One of the provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement is the rescission of S
FAS No. 4, "Reporting Gains and Losses from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Extinguishment of Debt", whereby
any gain or loss on the early extinguishment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql debt that was classified as an e
xtraordinary item in prior periods in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with SFAS No. 4, shall be reclas
sified if it does not meet the criteria of an
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extraordinary item as defined by
Accounting Principles Board Opinion 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Reporting the Results of Operat

ions - Reporting the Effects of Disposal of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Segment of a Business, and Extra
ordinary, Unusual and Infrequently Occurring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Events and Transactions."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SFAS No. 146, "Accounting for Co
sts Associated with Exit or Disposal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Activities", was issued in June
2002 and will be effective for Oncor on January
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1, 2003. SFAS No. 146 requires t
hat a liability for costs associated with an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exit or disposal activity be rec
ognized only when the liability is incurred and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql measured initially at fair value
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For accounting standards not yet
adopted or implemented, Oncor is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evaluating the potential impact
on its financial position and results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. REGULATIONS AND RATES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulatory Settlement Plan -- On
December 31, 2001, US Holdings filed a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement plan with the Commiss
ion, which was approved by the Commission on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 20, 2002. On August 5, 2002
, the Commission issued a financing order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the settlement plan,
authorizing the issuance of transition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (securitization) bonds of $1.3 b
illion. The Commission's order approving the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement plan and the financin
g order were appealed in separate dockets in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Travis County District Court on
August 16, 2002. US Holdings is unable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql predict when the appeal process
related to the Commission's approval of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement plan and the financin
g order will be concluded or the outcome. If the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission's approval is upheld,
the settlement plan resolves all major pending
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issues related to US Holdings' t
ransition to competition and will supersede
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain ongoing proceedings that
are related to the 1999 Restructuring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legislation. The settlement plan
does not remove regulatory oversight of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business. Oncor does not believe
that the outcome will materially affect Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql net financial results, as TXU En
ergy has agreed, under the Business Separation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, to hold Oncor harmles
s from the results of any disallowance of power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production-related items, includ
ing securitization of regulatory assets,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stranded costs and fuel reconcil
iation. For additional discussion of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement plan and related item
s, see Note 4 to Financial Statements in US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings' 2001 Form 10-K.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The principal and interest on th
e securitization bonds would be secured by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments from retail consumers d
esigned to enable recovery of power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production-related regulatory as
approximately $1.84 billion. Once bonds are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued, the associated amount of
the regulatory assets will be amortized to
f the bonds.
he federal level, Federal Energy Regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission (FERC) Order No. 888
requires all FERC-jurisdictional electric public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utilities to offer third parties
wholesale transmission services under an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql open-access tariff.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Commission's open access who
lesale transmission rules, which had mandated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the use of a particular rate set
ting methodology, were invalid because they
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceeded the statutory authority
of the Commission. On January 10, 2002, Reliant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy Incorporated and the City
Public Service Board of San Antonio each filed
exas District Court against the Commission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of the entities to whom the
y had made payments for transmission service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the invalidated pricing ru
les for the period January 1, 1997 through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 31, 1999, seeking declara
tory orders that, as a result of the application
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the invalid pricing rules, th
e defendants owe unspecified amounts. US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings and TXU SESCO are named
defendants in both suits. Oncor is unable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql predict the outcome of this liti
gation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. FINANCING ARRANGEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Credit Facilities - In April 200
2, US Holdings, TXU Energy and Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entered into a joint $1.0 billio
n 364-day revolving credit facility with a group
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of banks that terminates April 2
2, 2003. This facility will be used for working

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital and general corporate pu
rposes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql During the second quarter of 200
2, Oncor began issuing commercial paper to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fund its short-term liquidity re
quirements. The new commercial paper programs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allow each of TXU Energy and Onc
or to issue up to $2.4 billion and $1.0 billion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of commercial paper, respectivel
y.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The new $1.0 billion 364-day rev
olving credit facility, TXU's and US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings' existing $1.4 billion
credit facility that expires in February 2005,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and TXU's $500 million three-yea
r revolving credit facility with a group of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql banks that terminates in May 200
5 provide back-up for outstanding commercial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paper under the TXU, TXU Energy
and Oncor programs. As of June 30, 2002, total
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding commercial paper und
er these programs was $1.1 billion of which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's portion was $295 million
. As of June 30, 2002, TXU had $186 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding under its commercial
paper program, which was discontinued in July
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002. At that time, TXU was remo
ved as a borrower under the $1.4 billion credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facility. Commercial paper issua
nces are limited to the availability under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql back-up credit facilities, which
was $2.2 billion at June 30, 2002, after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deducting outstanding letters of
credit and outstanding borrowings. In July
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, US Holdings entered into a
$400 million credit facility that terminates no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql later than November 30, 2002, th
at will also provide back-up for outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial paper. The credit fac
ilities discussed above contain cross default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions with a $50 million th
reshold. Under the $1.0 billion 364-day
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revolving credit facility, a def
ault by TXU Energy or any subsidiary thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that exceeds the threshold would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under such facility to be accele
rated as to TXU Energy and US Holdings, but not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as to Oncor. Also, under this fa
cility, a default by Oncor or any subsidiary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof that exceeds the thresho
ld would cause the maturity of outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balances to be accelerated under

such facility as to Oncor and US Holdings, but
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not as to TXU Energy. Further, u
nder this facility, a default by US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that exceeds the threshold would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under such facility to be accele
rated as to US Holdings, but not as to Oncor or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Energy. Under the $1.4 billi
on credit facility and the recent $400 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facility, a default by US Holdin
gs or any subsidiary thereof that exceeds the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql threshold would cause the maturi
ty of outstanding balances under such facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be accelerated. Under the $50
0 million three-year revolving credit facility,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a default by TXU or any subsidia
ry thereof that exceeds the threshold would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause the maturity of outstandin
g balances under such facility to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accelerated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor is also provided short-ter
m financing by TXU and affiliated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql companies. Oncor had short-term
advances from affiliates of $128 million and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $108 million outstanding as of J
une 30, 2002 and December 31, 2001,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Long-Term Debt - At June 30, 200
2, $500 million of advances from affiliates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been classified as long-ter
m debt because Oncor currently anticipates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refinancing these borrowings wit
h long-term debt to be issued during the next 12
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months. Oncor has no obligation
to repay and does not anticipate repayment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these advances within 12 months
should the refinancing not occur.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On August 8, 2002, Oncor redeeme
d all of its 8.5% First Mortgage Bonds due
875% First Mortgage Bonds due February 1, 2022,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in aggregate principal amounts o
f $115 million and $112 million, respectively.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor funded the redemptions thr
ough the issuance of commercial paper, advances
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from affiliates and cash from op
erations. These amounts were classified as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long-term debt due currently at
June 30, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In May 2002, Oncor issued $1.2 b
illion aggregate principal amount of senior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured notes in two series in a
private placement. One series of $700 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is due May 1, 2012 and bears int
erest at the rate of 6.375%, and the other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series of $500 million is due Ma

y 1, 2032 and bears interest at the rate of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.0%. Each series is initially s
ecured by an equal principal amount of Oncor's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first mortgage bonds; however, t
he lien of those bonds may be released in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain circumstances. Proceeds
from the issuance were used by Oncor to repay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long-term advances from affiliat
es. In March and April 2002, Oncor entered into
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a series of forward interest rat
e swaps with a group of banks to effectively fix
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interest rates prior to the
issuance of these notes. As a result of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forward interest rate swaps, the
effective rates of interest on the debt series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due in 2012 and 2032 are approxi
mately 6.65% and 7.26%, respectively. (See Note
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As of June 30, 2002, the secured
long-term debt of Oncor consisted of $3.3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion of first mortgage bonds
and senior secured notes that are secured by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien on substantially all of its
tangible electric T&D property. US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remains obligated on Oncor's fir
st mortgage bonds. None of the long-term debt
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of TXU or US Holding
s are guaranteed or secured by Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The terms of certain financing a
rrangements of TXU and its consolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries contain financial c
ovenants that require maintenance of specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fixed charge coverage ratios, sh
areholders equity to total capitalization ratios
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and leverage ratios and/or conta
in minimum net worth covenants. As of June 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, TXU and its consolidated s
ubsidiaries were in compliance with all such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable covenants.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's mortgage restricts the p
ayment of dividends to the amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's retained earnings. At Ju
ne 30, 2002, there were no restrictions on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of dividends under these
provisions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sale of Receivables -- TXU, thro
ugh its subsidiaries, has certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities to provide financing
through sales of customer accounts receivable.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Under the facilities, purchases
of accounts receivable are funded by sales of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undivided interests therein to f
inancial institutions. Accounts receivable are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continually sold to replace thos
e accounts receivable that have been collected.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certain US subsidiaries of TXU s
ell customer accounts receivable to TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Receivables Company, a wholly-ow
ned bankruptcy remote indirect subsidiary of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU, which sells undivided inter
ests in accounts receivable it purchases to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial institutions. As of Ja
nuary 1, 2002, the facility includes TXU Energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retail Company LP, TXU SESCO Ene
rgy Services Company, Oncor and TXU Gas Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as qualified originators of acco
unts receivable under the program. TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Receivables Company may sell up
to an aggregate of $600 million in undivided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests in the receivables pur
chased from the originators under the program.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As of June 30, 2002, Oncor had s
old $76 million face amount of receivables to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Receivables Company under th
e program in exchange for cash of $36 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and $39 million in subordinated
notes, with $1 million of losses on sales for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the six months ended June 30, 20
02, principally representing the interest on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underlying financing. These loss
es approximated 4% of the cash proceeds from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receivables sales on an annualiz
ed basis. If the program terminates, cash flows
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Oncor would temporarily stop
until the undivided interests of the financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql institutions were repurchased. T
he level of cash flows would normalize in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 16 to 31 days. TXU
Business Services, an affiliate of Oncor,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services the purchased receivabl
es and is paid a market-based servicing fee by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Receivables Company. The sub
ordinated notes receivable from TXU Receivables
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company represent Oncor's retain
ed interest in the transferred receivables and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are recorded at book value, net
of allowances for bad debts, which approximates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair value due to the short-term
nature of the subordinated notes, and are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in accounts receivable
in the consolidated balance sheet.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. SHAREHOLDER'S EQUITY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 30, 2002
December 31, 20
01
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Common stock without par value:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorized shares- 100,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding - 68,931,000 and 69
,000,000................
$2,651
$ 32
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retained earnings...............
...........................
136
2,669
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accumulated and other comprehens
ive income (loss)..........
(25)
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total shareholder's equity......
.....................
$2,762
$2,701
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The amounts presented as of Dece
mber 31, 2001 reflect the allocated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql historical net book value of the
T&D operations of US Holdings and TXU SESCO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that were combined to form Oncor
. On January 1, 2002 these operations were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contributed to Oncor as required
by the 1999 Restructuring Legislation, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql historical equity amounts were a
ssigned to common stock. (See Note 1 for further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information concerning the busin
ess restructuring.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On July 31, 2002, Oncor's Articl
es of Incorporation were amended to split
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the shares of common stock on a
69,000-for-1 basis. Shares outstanding for all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql periods presented have been rest
ated to reflect this stock split.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In April 2002, Oncor repurchased
69,000 shares of its common stock from US
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings for $50 million. In Jul
y 2002, Oncor repurchased another 69,000 shares
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its common stock for $50 mill
ion.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. CONTINGENCIES
s, TXU Gas Company and TXU. The petition alleges

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and TXU entered into a M
emorandum of Understanding with the plaintiffs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to settle this lawsuit, subject
to the execution of a definitive settlement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plaintiff cities for execution.
If any plaintiff cities decline to execute the
ue as to those cities. Oncor believes the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allegations in this suit are wit
hout merit and intends to vigorously defend this
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suit against any plaintiff citie
s that do not execute the settlement. Oncor does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not believe the ultimate resolut
ion of this suit will have a material effect on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor's financial position, resu
lts of operations or cash flows.
tion of which, in the opinion of management, is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not expected to have a material
effect upon its financial position, results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. SUPPLEMENTARY FINANCIAL INF
ORMATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts Receivable -- At June 3
0, 2002 and December 31, 2001, accounts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receivable are stated net of unc
ollectible accounts of $1 million and $4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million, respectively. Accounts
receivable included $48 million and $50 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in unbilled revenues at June 30,
2002 and December 31, 2001, respectively.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, Plant and Equipment -\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql June 30,
December 31,
2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Transmission....................
..........................
$1,982
$1,979
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Distribution....................
..........................
6,217
6,110
..........................
432
430
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total...........................
.....................
8,631
8,519
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Less accumulated depreciation...
..........................
2,984
2,888
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Net of accumulated depreciation.
.....................
5,647
5,631
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Construction work in progress...
..........................
271
149
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Property held for future use....
..........................
22
22
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Net property, plant and equipmen
t....................
$5,940
$5,802
======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capitalized software costs of $1
32 million at June 30, 2002 and $131
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million at December 31, 2001 wer
e included in property, plant and equipment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amortization expense of $4 milli
on and $8 million relating to these software
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql costs was recorded for the three
and six months ended June 30, 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Goodwill -- At June 30, 2002 and
December 31, 2001, goodwill of $25
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql million, included in investments
, is stated net of accumulated amortization of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $7 million.
s -- Included in regulatory assets - net
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are regulatory assets of $2.1 bi
llion and regulatory liabilities of $411 million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at June 30, 2002, and regulatory
assets of $2.1 billion and regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities of $461 million at D
ecember 31, 2001. Regulatory assets of $2.0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql billion at June 30, 2002 and Dec
ember 31, 2001 were not earning a return. Of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets not earning a return, $1.
8 billion is associated with securitization
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonds to be issued pursuant to t
he regulatory settlement plan approved by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission. (See Note 3 for furt
her discussion of the settlement plan.) The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remaining regulatory assets have
a weighted average remaining recovery period of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24 to 43 years.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Derivatives and Hedges -- In Mar
ch and April 2002, Oncor entered into a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series of forward interest rate
swaps with a group of banks to effectively fix
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interest rates on the senior
secured notes discussed in Note 4. Such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contracts were designated as acc
ounting hedges under SFAS No. 133, "Accounting
Hedging Activities," and the fair values of the
r Comprehensive Income. These contracts were
ion. Amounts included in Other Comprehensive
income over the term of the senior secured
erest rates of approximately 6.65% and 7.26% on
respectively.
that have been designated as accounting
derlying hedged items. As a result, Oncor
ness during the six months ended June 30, 2002.
accumulated in other comprehensive income of $1
ssified into earnings during the next twelve
cordance with the Business Separation
t income from TXU Energy for carrying costs
ory assets subject to securitization.
\page
on -- During the six months ended June 30,
noncash advances to affiliates relating to the
iabilities associated with US Holdings' retail
idiary REP of TXU Energy.
\page
for Derivatives Instruments and

contracts were reflected in Othe
settled in May 2002 for $39 mill
Income will be reclassified into
notes resulting in effective int
the notes due in 2012 and 2032,
The terms of Oncor's derivatives
hedges match the terms of the un
experienced no hedge ineffective
As of June 30, 2002, net losses
million are expected to be recla
months.
Affiliated Transactions -- In ac
Agreement, Oncor records interes
primarily related to the regulat
F-28
Supplemental Cash Flow Informati

2002, there were $91 million in
transfer of certain assets and l
customers to an unregulated subs
F-29
$1,200,000,000
OFFER TO EXCHANGE
$700,000,000
$500,000,000
OTES DUE 2012
7.000% EXCHANGE SENIOR SECURED NOTES DUE 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (WHICH ARE REGISTERED UNDER THE
SECURITIES ACT)
(WHICH ARE REGISTERED UNDER THE SECURITIES ACT)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR ANY AND ALL
FOR ANY AND ALL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.375% SENIOR SECURED NOTES DUE
2012
7.000% SENIOR SECURED NOTES DUE 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (WHICH ARE NOT REGISTERED UNDER
THE SECURITIES ACT)
WHICH ARE NOT REGISTERED UNDER THE SECURITIES ACT)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Until _________, all dealers tha
t effect transactions in these securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not participating in
this offering, may be required to deliver a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus. This is in addition
to the dealers' obligation to deliver a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus when acting as underw
riters and with respect to their unsold
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allotments or subscriptions.
\page
\par\pard\plain\fs16{\*\bkmkstart part_1_2_1}{\*\bkmkend part_1_2_1}\pard\plain\
cf1\f50\fs16\ql PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ITEM 20. INDEMNIFICATION OF DIRE
CTORS AND OFFICERS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 2.02-1 of the Texas Busi
ness Corporation Act ("TBCA") permits
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor, in certain circumstances,
to indemnify any present or former director,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer, employee or agent of On
cor against judgments, penalties, fines,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlements and reasonable expen
ses incurred in connection with a proceeding in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which any such person was, is or
is threatened to be, made a party by reason of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holding such office or position,
but only to a limited extent for obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulting from a proceeding in w
hich the person is found liable on the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that a personal benefit was impr
operly received or in circumstances in which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person is found liable in a deri
vative suit brought on behalf of the Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article Ten of the Articles of I
ncorporation of Oncor provides as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Corporation shall indemn
ify and may purchase and maintain insurance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other arrangements on behalf
of any and all persons whom it may lawfully
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnify and insure to the full
est extent permitted by the TBCA, as the same

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exists or may hereafter be amend
ed, or by the laws of the State of Texas, as in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect from time to time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) A director of the Corporatio
n shall not be personally liable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation or its shareholders
for monetary damages for any act or omission in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such director's capacity as dire
ctor, except that this provision does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminate or limit the liability
of a director to the extent the director is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql found liable for: (i) a breach o
f the director's duty of loyalty to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation or its shareholders;
(ii) an act or omission not in good faith that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes a breach of duty of
the director to the Corporation or an act or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission that involves intention
al misconduct or a knowing violation of the law;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) a transaction from which t
he director received an improper benefit whether
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or not the benefit resulted from
an action taken within the scope of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director's office; or (iv) an ac
t or omission for which the liability of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director is expressly provided f
or by an applicable statute. If the laws of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of Texas are hereafter ame
nded to authorize corporate action further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminating or limiting the pers
onal liability of directors then the liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a director of the Corporation
shall be eliminated or limited to the fullest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent permitted by such laws as
so amended.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) No repeal or modification of
this Article Ten by the shareholders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation shall adversely
affect any right or protection of a director or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other person lawfully indemnifie
d by the Corporation existing at the time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such repeal or modification or w
ith respect to events occurring prior to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 13. of the Bylaws of Onc
or provides as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Without further specific approva
l of the shareholders of the Corporation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation shall indemnify
and may purchase, enter into, maintain or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide insurance or other arran
gements for the benefit of any person who is or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was a Director, officer, employe
e or agent of the Corporation or is or was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql serving another entity at the re
quest of the Corporation as a Director, officer,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee or agent or otherwise,
to the fullest extent permitted by the laws of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the State of Texas, including wi
thout limitation Art. 2.02-1 of the Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Corporation Act or any
successor provision, against any liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql asserted against or incurred by
any such person in any such capacity or arising
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql out of such person's service in
such capacity whether or not the Corporation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would otherwise have the power t
o indemnify against any such liability under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas Business Corporation Act.
If the laws of the State of Texas are amended to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorize the purchase, entering
into, maintaining or providing of insurance,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnification or other arrange
ments in the nature of those permitted hereby to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a greater extent than presently
permitted, then the Corporation shall have the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power and authority to purchase,
enter into, maintain and provide any additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance, indemnification or ot
her arrangements in such regard as shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted from time to time by t
he laws of the State of Texas without further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the shareholders of
the Corporation. No repeal or modification of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such laws or this Section shall
adversely affect any such insurance, arrangement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or right to indemnification exis
ting at the time of such repeal.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Corp. has insurance covering
its expenditures that might arise in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with Oncor's lawful i
ndemnification of Oncor's directors and officers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for their liabilities and expens
es. Directors and officers of Oncor also have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance which insures them aga
inst certain other liabilities and expenses.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql II-1
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ITEM 21. EXHIBITS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The list of exhibits under the h
eading INDEX TO EXHIBITS on page II-5 of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this registration statement is i
ncorporated in this Item 21 by reference.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ITEM 22. UNDERTAKINGS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) The undersigned registrant h
ereby undertakes to respond to requests for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information that is incorporated
by reference into the prospectus pursuant to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Item 4, 10(b), 11 or 13 of Form
S-4, within one business day of receipt of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request, and to send the incorpo
rated documents by first class mail or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equally prompt means. This inclu
des information contained in documents filed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent to the effective date
of this registration statement through the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of responding to the request.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) The undersigned registrant h
ereby undertakes to supply by means of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql post-effective amendment all inf
ormation concerning a transaction, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company being acquired involved
therein, that was not the subject of and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in the registration sta
tement when it became effective.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) Insofar as indemnification f
or liabilities arising under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act may be permitted to director
s, officers and controlling persons of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registrant pursuant to the foreg
oing provisions, or otherwise, the registrant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been advised that in the opi
nion of the SEC such indemnification is against
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public policy as expressed in th
e Securities Act and is, therefore,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unenforceable. In the event that
a claim for indemnification against such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities (other than the paym
ent by the registrant of expenses incurred or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid by a director, officer or c
ontrolling person of the registrant in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successful defense of any action
, suit or proceeding) is asserted by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director, officer or controlling
person in connection with the securities being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered, the registrant will,
unless in the opinion of its counsel the matter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been settled by controlling
precedent, submit to a court of appropriate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction the question whethe
r such indemnification by it is against public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql policy as expressed in the Secur
ities Act and will be governed by the final
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjudication of such issue.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql POWER OF ATTORNEY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each director and/or officer of
Oncor whose signature appears below hereby
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appoints the Agents for Service
named in this registration statement, and each

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of them severally, as his/her at
torney-in-fact to sign in his/her name and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf, in any and all capacitie
s stated below, and to file with the SEC, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all amendments, including po
st-effective amendments, to this registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement; and the registrant he
reby also appoints each such Agent for Service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as its attorney-in-fact with lik
e authority to sign and file any such amendments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in its name and on its behalf.
cf1\f50\fs16\ql SIGNATURES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the requirements of
the Securities Act, the registrant has duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql caused this registration stateme
nt to be signed on its behalf by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned, thereunto duly auth
orized, in the city of Dallas, state of Texas on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql October 1, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Erle Nye
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Erle Nye, Chairman of the Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Chief Executive)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the requirements of
the Securities Act of 1933, this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement has been
signed by the following persons in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacities and on the dates indi
cated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Signature
Title
Date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql /s/ Erle Nye
Pri
ncipal Executive Officer
October 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ---------------------------------------- and Director
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (Erle Nye, Chairman of the Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql and Chief Executive)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql /s/ Scott Longhurst
Principal Financial
October 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ---------------------------------------- Officer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (Scott Longhurst, Senior Vice Pr
esident \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Finance and Strategy)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql /s/ Biggs C. Porter
Principal Accounting
October 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ---------------------------------------- Officer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (Biggs C. Porter, Vice President
)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql /s/ T.L. Baker
Di
rector
October 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ---------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (T.L. Baker)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql /s/ Michael J. McNally
Director
October 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ---------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (Michael J. McNally)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql /s/ R.A. Wooldridge
Director
October 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ---------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (R.A. Wooldridge)
\page
cf1\f50\fs16\ql INDEX TO EXHIBITS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREVIOUSLY FILED*
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILE
AS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT NUMBER
E
XHIBIT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- ----------\par\pard\plain\fs16
1-12833 Form 8-K
2
-- Master Separation Agreement by and among TXU Electric Delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (January 16, 2002)
Company (now Oncor), TXU Generation Holdings Company LLC, TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Merger Energy Trading Company LP
, TXU SESCO Company, TXU SESCO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy Services Company, TXU Ene
rgy Retail Company LP and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Company, dated as of De
cember 14, 2001.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(a)
-- Articles of Incorporation of Oncor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(b)
-- Articles of Amendment, effective January 17, 2002, to the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles of Incorporation of Onc
or.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(c)
-- Articles of Amendment, effective July 31, 2002, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles of Incorporation of Onc
or.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(d)
-- Bylaws of Oncor, as restated January 17, 2002.
-- Indenture.
-- Officer's Certificate, dated May 6, 2002, to the Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the form of the Old 2012 No
tes and the form of the Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2032 Notes attached thereto.
-- Form of the New 2012 Notes.
-- Form of the New 2032 Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4(e)
2-90185
4
(a)
-- 1983 Mortgage.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4(e)(1)
-- Supplemental Indentures to the 1983 Mortgage:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number
Dated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2-90185
4(b)
First
April 1, 1984
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33-24089
4(a)-1
Fifteenth
July 1, 1987
4(a)-3
Twenty-second
January 1, 1989
4(a)-3
Twenty-fifth
December 1, 1989
4(a)-2
Twenty-eighth
October 1, 1990
4(a)-1
Thirty-third
February 1, 1992
4(a)-1
Thirty-fourth
April 1, 1992
4(a)-3
Thirty-sixth
June 1, 1992
4(a)-1
Thirty-eighth
August 1, 1992
4(a)-3
Fortieth
November 1, 1992
4(a)-1
Forty-second
March 1, 1993
4(a)-2
Forty-fourth
April 1, 1993
4(a)-1
Forty-sixth
July 1, 1993
4(a)-3
Forty-seventh
October 1, 1993
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 0-11442 Form 10-K
4(a)-2
Sixty-first
February 1, 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2000)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 0-12833 Form 10-Q
4(a)-2
Sixty-second
July 1, 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Quarter ended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 30, 2001)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 0-12833 Form 10-K
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2001)
4(a)-2
Sixty-third
January 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 0-12833 Form 10-Q
4
Sixty-fourth
May 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 31, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4(f)
-- First Mortgage Bond, 6.375% Series due 2012.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4(g)
-- First Mortgage Bond, 7.000% Series due 2032.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4(h)
-- Registration Rights Agreement.
-- Opinion of Hunton & Williams.
-- Opinion of Thelen Reid & Priest LLP.
1-12833 Form 10-Q
-- 364-Day Revolving Credit Agreement, dated as of
April 24, 2002, among TXU Energy, Oncor, US Holdings,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 31, 2002)
JPMorgan Chase Bank, as Administrative Agent, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial institutions named the
rein.
-- Credit Agreement, dated August 30, 2002, among TXU Energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor, US Holdings and certain b
anks listed therein,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, Barclays Bank PLC, as Admin
istrative Agent.
-- Generation Interconnection Agreement, dated December 14,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001, between TXU Electric Deliv
ery Company (now Oncor) and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Generation Company LP.
\page
-- Generation Interconnection Agreement, dated December 14,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2001, between TXU Electric Deliv
ery Company (now Oncor) and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Generation Company LP, for i
tself and as Agent for TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Big Brown Company LP, TXU Mounta
in Creek Company LP, TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Handley Company LP, TXU Tradingh
ouse Company LP and TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DeCordova Company LP (Interconne
ction Agreement)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10(e)
-- Amendment to Interconnection Agreement, dated May 31, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10(f)
-- Standard Form Agreement between Oncor and Competitive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retailer Regarding Terms and Con
ditions of Delivery of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Power and Energy (Deliv
ery Service Agreement)
-- Computation of ratios of earnings to fixed charges.
-- Consent of Deloitte & Touche LLP.
-- Consents of Hunton & Williams and Thelen Reid & Priest LLP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in Exhibits 5(a) and 5
(b), respectively.
-- Power of Attorney (see page II-4 herein).
-- Statement of Eligibility on Form T-1 of The Bank of New York
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the Indenture.
-- Form of Letter of Transmittal.
-- Form of Notice of Guaranteed Delivery.
-- Form of Exchange Agent Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * Incorporated herein by referen
ce.
\page{\*\bkmkstart doc_1_3}{\*\bkmkend doc_1_3}\par\pard\plain\f0\fs16\par\pard\
plain\cf1\f50\fs16\ql Exhibit 3(a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLES OF INCORPORATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU ELECTRIC DELIVERY COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned, a natural perso
n over the age of eighteen (18) years and a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql citizen of the State of Texas, a
cting as incorporator of a corporation under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas Business Corporation Act,
does hereby adopt the following Articles of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporation for such corporati
on:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE ONE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The name of the Corporation is T
XU Electric Delivery Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE TWO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The period of its duration is pe
rpetual.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE THREE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The purpose for which the Corpor
ation is organized is to transact any and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all lawful business for which co
rporations may be incorporated under the Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Corporation Act (herein
after referred to as the "TBCA").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE FOUR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The aggregate number of shares w
hich the Corporation shall have authority
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to issue is One Hundred Million
(100,000,000) shares of Common Stock, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql par value.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE FIVE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If, with respect to any action t
o be taken by the shareholders of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, any provision of th
e TBCA would, but for this Article Five, require
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the vote or concurrence of the h
olders of shares having more than a majority of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the votes entitled to be cast th
ereon, or of any class or series thereof, the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vote or concurrence of the holde
rs of shares having only a majority of the votes
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to be cast thereon, or
of any class or series thereof, shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required with respect to any suc
h action.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any action required by the TBCA
to be taken at any annual or special
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting of the shareholders, or
any action which may be taken at any annual or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql special meeting of shareholders,
may be taken without a meeting, without prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice, and without a vote, if a
consent or consents in writing, setting forth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the action so taken, shall be si
gned by the holder or holders of shares having
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not less than the minimum number
of votes that would be necessary to take such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action at a meeting at which the
holders of all the shares entitled to vote on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the action were present and vote
d.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE SIX
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation will not commenc
e business until it has received for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance of shares consideration
of the value of One Thousand Dollars
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ($1,000.00), consisting of money
, labor done, or property actually received.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE SEVEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The street address of its initia
l registered office is Energy Plaza, 1601
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bryan Street, Dallas, Texas 7520
1-3411 and the name of its registered agent at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such address is TXU Business Ser
vices Company (Office of the Corporate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE EIGHT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The number of directors of the C
orporation shall be fixed, from time to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, in the manner provided in
the Bylaws of the Corporation and shall be one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) or more.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The number of directors constitu
ting the initial Board of Directors is five
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5), and the names and addresses
of the persons who are to serve as directors

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until the first annual meeting o
f the shareholders or until their successors are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duly elected and qualified are:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql T.L. Baker
Energy Plaz
a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1601 Bryan Street
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. Jarrell Gibbs
Energy Plaz
a
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Michael J. McNally Energy Plaz
a
Energy Plaz
a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R.A. Wooldridge
Energy Plaz
a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE NINE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation may, from time t
o time, to the extent it may lawfully do
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so, purchase, directly or indire
ctly, any of its stock outstanding at such price
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as may be fixed by its Board of
Directors and accepted by the holders of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock purchased, and may resell
any stock so purchased or otherwise acquired by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it at such price as may be fixed
by the Board of Directors.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE TEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Corporation shall indemn
ify and may purchase and maintain insurance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other arrangements on behalf
of any and all persons whom it may lawfully
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnify and insure to the full
est extent permitted by the TBCA, as the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exists or may hereafter be amend
ed, or by the laws of the State of Texas, as in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect from time to time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) A director of the Corporatio

n shall not be personally liable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation or its shareholders
for monetary damages for any act or omission in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such director's capacity as a di
rector, except that this provision does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminate or limit the liability
of a director to the extent the director is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql found liable for: (i) a breach o
f the director's duty of loyalty to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation or its shareholders;
(ii) an act or omission not in good faith that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes a breach of duty of
the director to the Corporation or an act or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission that involves intention
al misconduct or a knowing violation of the law;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) a transaction from which t
he director received an improper benefit whether
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or not the benefit resulted from
an action taken within the scope of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director's office; or (iv) an ac
t or omission for which the liability of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director is expressly provided f
or by an applicable statute. If the laws of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of Texas are hereafter ame
nded to authorize corporate action further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminating or limiting the pers
onal liability of directors then the liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a director of the Corporation
shall be eliminated or limited to the fullest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent permitted by such laws as
so amended.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) No repeal or modification of
this Article Ten by the shareholders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation shall adversely
affect any right or protection of a director or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other person lawfully indemnifie
d by the Corporation existing at the time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such repeal or modification or w
ith respect to events occurring prior to such
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE ELEVEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon any issue or sale for money
or other consideration of any additional,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unissued or treasury shares of c
apital stock of this Corporation, or securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convertible into or carrying a r
ight to subscribe to or acquire shares of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital stock of this Corporatio
n that may be authorized from time to time, no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of stock (irrespective of
the kind of such stock) shall have any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preemptive or other right to sub

scribe for, purchase or receive any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proportionate or other share of
the stock so issued or sold, such preemptive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights being expressly denied, b
ut the Board of Directors may dispose of all or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any portion of such stock as and
when it may determine free of any and all such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights, whether by offering the
same to shareholders or others or by sale or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other disposition as said Board
of Directors may deem advisable. Nothing in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article shall be construed to li
mit the authority of the Board of Directors to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant options or first refusal r
ights with respect to the capital stock of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE TWELVE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cumulative voting by the shareho
lders of the Corporation at any election
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for directors is expressly prohi
bited. The shareholders entitled to vote for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors in such election shall
be entitled to cast one vote per directorship
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for each share held, and no more
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE THIRTEEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The name and address of the inco
rporator is:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R.A. Wooldridge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy Plaza
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1601 Bryan Street, 30th Floor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ R.A. Wooldridge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R.A. Wooldridge, Incorporator
plain\cf1\f50\fs16\ql Exhibit 3(b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLES OF AMENDMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the provisions of Ar
ticles 4.04 and 10.03 of the Texas Business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation Act, the undersigned
corporation adopts the following Articles of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment to its Articles of Inc
orporation to be effective as set forth herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The name of the corporation is T
XU Electric Delivery Company (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Corporation").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following amendment to the A
rticles of Incorporation of the Corporation was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adopted by the sole shareholder
of the Corporation on January 7, 2002. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles of Incorporation are am
ended to change the name of the Corporation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The amendment alters or changes
Article One of the Articles of Incorporation and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the full text of each provision
of Article One is amended to read as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ARTICLE ONE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The name of the Corporation is O
ncor Electric Delivery Company."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The number of shares of the Corp
oration outstanding at the time of such adoption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was 1,000; and the number of sha
res entitled to vote thereon was 1,000.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The approval of the Articles of
Amendment was duly authorized by all action
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by the laws under which
TXU Electric Delivery Company is incorporated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and by its constituent documents
. The number of outstanding shares of each class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or series of stock of TXU Electr
ic Delivery Company entitled to vote, with other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares or as a class, on the Art
icles of Amendment are as follows:
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number of Shares
Class o
r Series
Number of Shares
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding
Entitled to Vote as a
--------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class or Series

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1,000
Common
N/A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The number of shares, not entitl
ed to vote only as a class, voted for and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Articles of Amendmen
t, respectively, and, if the shares of any class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or series are entitled to vote a
s a class, the number of shares of each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql class or series voted for and ag
ainst the Articles of Amendment, are as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total Voted
Total Voted
Class or Series
Number of Shares
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For
Against
Entitled to Vote as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class or Series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Voted For Voted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ----\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Against
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1,000
0
Common
N/A
N/A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql These Articles of Amendment do n
ot necessitate an exchange, reclassification or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation of issued shares.
ot effect a change in stated capital.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE EIGHT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql These Articles of Amendment shal
l be effective on January 17, 2002 in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the provisions of Article 1
0.03 of the Texas Business Corporation Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ John F. Stephens, Jr.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql John F. Stephens, Jr.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An Authorized Officer
plain\cf1\f50\fs16\ql Exhibit 3(c)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLES OF AMENDMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the provisions of Ar
ticles 4.04 and 10.03 of the Texas Business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation Act, the undersigned
corporation adopts the following Articles of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment to its Articles of Inc
orporation to be effective as set forth herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE I
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The name of the corporation is O
ncor Electric Delivery Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE II
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following amendment to the A
rticles of Incorporation of the corporation was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adopted by the sole shareholder
of the corporation on July 8, 2002. The Articles
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Incorporation are amended to
split the shares of common stock of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation on a 69,000-for-1 ba
sis.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The amendment alters or changes
Article Four of the Articles of Incorporation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the full text of Article Fou
r is amended to read as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ARTICLE FOUR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The aggregate number of shares w
hich the Corporation shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have authority to issue is One H
undred Million (100,000,000)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of Common Stock, without
par value.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each share of Common Stock of th
e Corporation issued and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding or held in the treas
ury of the Corporation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately prior to the close o
f business on July 31, 2002 is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changed into and reclassified as

69,000 fully paid and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nonassessable shares of Common S
tock, without par value, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the close of business on such
date, each holder of record
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Common Stock shall, without f
urther action, be and become
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the holder of 68,999 additional
shares of Common Stock for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each share of Common Stock held
of record immediately prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto as determined by the Boa
rd of Directors. Effective at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the close of business on such da
te, each certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representing shares of Common St
ock outstanding or held in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql treasury immediately prior to su
ch time shall continue to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represent the same number of sha
res of Common Stock and as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly as practicable thereaft
er, the Corporation shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue and cause to be delivered
to each holder of record of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of Common Stock at the cl
ose of business on such date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an additional certificate or cer
tificates representing 68,999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional shares of Common Stoc
k for each share of Common
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock held of record immediately
prior thereto."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE III
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The number of shares of the corp
oration outstanding at the time of such adoption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was 998; and the number of share
s entitled to vote thereon was 998.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IV
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The approval of the Articles of
Amendment was duly authorized by all action
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by the laws under which
the corporation is incorporated and by its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constituent documents. The numbe
r of outstanding shares of each class or series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of stock of the corporation enti
tled to vote, with other shares or as a class,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Articles of Amendment are
as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number of Shares
Class o
r Series
Number of Shares
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding
Entitled to Vote as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class or Series
Common
998
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE V
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The number of shares, not entitl
ed to vote only as a class, voted for and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Articles of Amendmen
t, respectively, and, if the shares of any class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or series are entitled to vote a
s a class, the number of shares of each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql class or series voted for and ag
ainst the Articles of Amendment, are as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total Voted
Total Voted
Class or Series
Number of Shares
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For
Against
Entitled to Vote as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class or Series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Voted For Voted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ----\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Against
0
Common
998
0
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VI
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql These Articles of Amendment spli
t and reclassify each of the 998 shares of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql common stock of the Corporation
issued and outstanding on the effective date to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be 69,000 shares of common stock
, or an aggregate of 68,862,000 shares of common
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VII
ot effect a change in the aggregate stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital of the corporation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VIII
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql These Articles of Amendment shal
l be effective on July 31, 2002 in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the provisions of Article 1
0.03 of the Texas Business Corporation Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Diane J. Kubin
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Diane J. Kubin,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An Authorized Officer
plain\cf1\f50\fs16\ql Exhibit 3(d)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMENDED AND RESTATED BYLAWS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1. PLACE OF MEETINGS OF
SHAREHOLDERS. All meetings of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders shall be held at th
e principal office of the Corporation in Dallas,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas, or at such other place wi
thin or without the State of Texas as may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stated in the call and notice.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2. ANNUAL MEETING OF SHA
REHOLDERS. The annual meeting of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders for the election of
Directors and the transaction of such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business as may properly come be
fore such meeting shall be held at such time as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by the Board of Direc
tors and as stated in the notice of meeting. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event that such annual meeti
ng is not held, a subsequent meeting may be held
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in place thereof and any busines
s transacted or elections held at such meeting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be as valid as if transact
ed or held at the annual meeting. Any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent meeting shall be call
ed in the same manner as provided for special
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meetings of shareholders.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3. SPECIAL MEETINGS OF S
HAREHOLDERS. Special meetings of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders may be called by th
e Chairman of the Board, the President, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors or the holder
s of not less than one-tenth of all the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding shares entitled to v
ote at such meetings.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4. NOTICE OF MEETINGS OF
SHAREHOLDERS. Written notice of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meetings of shareholders, statin
g the place, day and hour of the meeting and, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case of a special meeting, the p
urpose or purposes for which the meeting is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql called, shall be delivered to th
e shareholders of record entitled to vote at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such meetings not less than ten
(10) nor more than sixty (60) days before the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting. If mailed, such notice
shall be deemed to be delivered when deposited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the United States mail addres
sed to the shareholder at his address as it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appears on the stock transfer bo
oks of the Corporation, with postage thereon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepaid. A waiver of notice in w
riting signed by the person or persons entitled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such notice, whether before o
r after the meeting, shall be equivalent to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql giving of such notice.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5. QUORUM AT MEETINGS OF
SHAREHOLDERS. The holders of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority of the shares entitled
to vote, present in person or by proxy, shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute a quorum at any meeti
ng of shareholders, but less than a quorum shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have power to adjourn any meetin
g from time to time. Except as otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided by statute or by the Ar
ticles of Incorporation of the Corporation, when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a quorum is present at any meeti
ng a majority of the shares having voting power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present in person or represented
by proxy shall decide any question brought
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before such meeting. At any meet
ing of shareholders each shareholder entitled to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vote shall be entitled to one vo
te for each share of stock held by him, and may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vote and otherwise act in person
or by proxy.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6. FORM OF CERTIFICATES
OF STOCK AND TRANSFER OF SHARES.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificates of stock of the Cor
poration shall be in such form as the Board of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors may from time to time
determine. The stock of the Corporation shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferable only on the books o
f the Corporation by the holders in person or by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorney on surrender of the cer
tificates therefor properly endorsed. The Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors may appoint one or
more transfer agents and one or more registrars
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the stock. The Corporation sh
all be entitled to treat the holder of record of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any shares of the Corporation as
the owner thereof for all purposes, and shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be bound to recognize any eq
uitable or other claim to, or interest in, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares or any rights deriving fr
om such shares, on the part of any other person,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless and until such other pers
on becomes the holder of record of such shares,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not the Corporation s
hall have either actual or constructive notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the interest of such other pe
rson.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 7. SIGNING OF CERTIFICAT
ES OF STOCK. Certificates of stock of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation shall be signed
by the Chairman of the Board, the President or a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice President and either the Se
cretary or an Assistant Secretary, and shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sealed with the seal of the Corp
oration or a facsimile thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8. NUMBER, ELECTION AND
TENURE OF DIRECTORS. The affairs of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation shall be managed by
a Board of Directors. The number of Directors of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation shall initially
be established by the Articles of Incorporation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall thereafter be establis
hed from time to time by resolution of the Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors, and shall consist
of at least one (1) or more members, who shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be chosen at the annual meeting
of shareholders, or at any meeting of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders held in place there
of, and shall serve until their successors are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elected unless removed as herein
provided for.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vacancies in the Board of Direct
ors, including vacancies arising from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an increase in the number of Dir
ectors, shall be filled by a majority of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors then in the office and
such new Directors shall serve until the next
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annual meeting of shareholders.
Any or all of the Directors may at any time be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql removed, whether cause be assign

ed for such removal or not, by the vote of the
te number of the shares of stock of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation then entitled to vot
e at an election of Directors.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 9. MEETINGS OF DIRECTORS
. Meetings of the Board of Directors
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be held at the time and pl
ace fixed by resolution of the Board of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors or upon the call of th
e Chairman of the Board or the President. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary or officer performing
his duties shall give at least twenty-four
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hours' notice of all meetings of
Directors by mail, telegram, facsimile or hand
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery to the last known addre
ss of each Director, provided that a meeting may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be held without notice immediate
ly after the annual meeting of shareholders, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice need not be given of regu
lar meetings held at such time as may be fixed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by a resolution of the Board. Me
etings of the Directors may be held at any time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without notice if all Directors
are present or if those not present waive notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either before or after the meeti
ng. At any meeting of Directors a majority of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the total number of Directors sh
all constitute a quorum, but less than a quorum
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have power to adjourn the
meeting from time to time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 10. COMMITTEES. The Boar
d of Directors may designate from among
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its members one (1) or more comm
ittees, each of which shall be comprised of one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) or more of its members, and
may designate one (1) or more of its members as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alternate members of any committ
ee, who may, subject to any limitations imposed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Board of Directors, repla
ce absent or disqualified members at any meeting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of that committee. Any such comm
ittee, to the extent provided in the resolution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql establishing such committee, sha
ll have and may exercise all the authority of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors, subject
to statutory limitations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 11. OFFICERS. The Board
of Directors, after the annual meeting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of shareholders each year, may e
lect one of their number Chairman of the Board,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall elect one of their number
President, may elect one or more Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Presidents, shall elect a Secret
ary and may elect a Treasurer, and may elect one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or more Assistant Secretaries an
d Assistant Treasurers and such other officers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as they may from time to time de
em proper. The same person may be elected to and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hold more than one office. The C
hairman of the Board shall be the chief
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executive officer of the Corpora
tion. He shall preside at all meetings of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders and of the Board of
Directors. In the absence of a President, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chairman of the Board shall also
be considered to be the President of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation and shall perform th
e duties and exercise the powers of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql President. In the absence of the
Chairman of the Board, the President shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preside at all meetings of the B
oard of Directors and the shareholders and shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform the duties and exercise
the powers of the Chairman of the Board. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice Presidents, in the order of
their seniority, unless otherwise determined by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors, shall, i
n the absence or disability of a Chairman of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board and President, perform the
duties and exercise the powers of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql President. The Secretary shall a
ttend all meetings of the Board of Directors and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the shareholders and record v
otes and minutes of proceedings in a book to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql kept for that purpose. He shall
give, or cause to be given, notice of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meetings of shareholders and spe
cial meetings of the Board of Directors. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasurer shall have custody of
corporate funds and securities, shall keep full
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and accurate account of receipts
and disbursements of the Corporation, and shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposit all moneys and other val
uable effects in the name and to the credit of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation in such deposito
ries as may be designated by the Board of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors. The Treasurer shall d
isburse the funds of the Corporation pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instructions from the Board of D
irectors, and shall render to the Chairman of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board and Directors, at the
regular meetings of the Board or whenever they
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may require it, an account of al
l his transactions as Treasurer and of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial condition of the Corpo
ration. In the absence of the Secretary or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasurer, the Assistant Secreta
ries or Assistant Treasurers may perform their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duties or exercise their powers,
respectively, or such other duties as may be

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conferred on them by the Board o
f Directors or other officers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term of office of all office
rs shall be one year, or until their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective successors are chosen
and qualified, but any officer may be removed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from office for or without cause
at any time by the Board of Directors. Whenever
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any vacancy shall occur in any o
ffice by death, resignation, increase in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of offices of the Corpora
tion, or otherwise, the same shall be filled by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors, and the
officer so elected shall hold office until his
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor is chosen and qualifie
d. Notwithstanding the foregoing paragraph, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers of the Corporation shal
l have such other powers and duties as usually
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pertain to their offices, respec
tively, as well as such other powers and duties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as may from time to time be conf
erred by the Board of Directors.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 12. TRANSACTIONS WITH TH
E CORPORATION. A Director of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation shall not be disqual
ified by his office from dealing or contracting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with this Corporation, either as
a vendor, purchaser or otherwise, nor shall any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction or contract of the C
orporation be void or voidable by reason of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fact that any Director or any fi
rm of which any Director is a member, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation of which any Directo
r is a shareholder or Director, is in any way
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interested in such transaction o
r contract, provided that such transaction or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contract is or shall be authoriz
ed, ratified or approved either (1) by vote of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the majority of a quorum of the
Board of Directors, without counting in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority or quorum any Director
so interested; or (2) by a vote of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders or by a consent sig
ned by such holders; nor shall any Director be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liable to account to the Corpora
tion for any profits realized by him from or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through any transaction or contr
act of this Corporation authorized, ratified or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved, as aforesaid, by reaso
n of the fact that he or any firm of which he is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a member or any corporation of w
hich he is a shareholder or Director was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interested in such transaction o

r contract. Nothing herein contained shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql create any liability in the even
ts above described or prevent the authorization,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ratification or approval of such
contracts in any other manner provided by law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 13. INSURANCE, INDEMNIFI
CATION AND OTHER ARRANGEMENTS. Without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further specific approval of the
shareholders of the Corporation, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation shall indemnify and
may purchase, enter into, maintain or provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance or other arrangements
for the benefit of any person who is or was a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director, officer, employee or a
gent of the Corporation or is or was serving
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another entity at the request of
the Corporation as a Director, officer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee, agent or otherwise, to
the fullest extent permitted by the laws of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of Texas, including withou
t limitation Art. 2.02-1 of the Texas Business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation Act or any successor
provision, against any liability asserted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against or incurred by any such
person in any such capacity or arising out of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such person's service in such ca
pacity whether or not the Corporation would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise have the power to inde
mnify against any such liability under the Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Corporation Act. If the
laws of the State of Texas are amended to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorize the purchase, entering
into, maintaining or providing of insurance,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnification or other arrange
ments in the nature of those permitted hereby to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a greater extent than presently
permitted, then the Corporation shall have the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power and authority to purchase,
enter into, maintain and provide any additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance, indemnification or ot
her arrangement in such regard as shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted from time to time by t
he laws of the State of Texas without further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the shareholders of
the Corporation. No repeal or modification of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such laws or this Section shall
adversely affect any such insurance, arrangement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or right to indemnification exis
ting at the time of such repeal or modification.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 14. AMENDMENT OF BYLAWS.
These bylaws may be amended by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors or the shareh
olders.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 15. ACTION BY CONSENT. A
ny action required to be taken at a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting of the Directors or the
shareholders may be taken without a meeting if a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent in writing shall be sign
ed by the persons legally required and entitled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to vote on such action.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 17, 2002.
plain\cf1\f50\fs16\ql Exhibit 4(a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ONCOR ELECTRIC DELIVERY COMPANY,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISSUER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRUSTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDENTURE AND DEED OF TRUST
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DATED AS OF MAY 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS INSTRUMENT GRANTS A SECURIT
Y INTEREST
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BY A UTILITY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS INSTRUMENT CONTAINS AFTER-A
CQUIRED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROPERTY PROVISIONS
\page
rust Indenture Act of 1939
, 2002
Indenture Section
................
1009
........
1009
........
1014
........
Not Applicable
........
1008, 1010
................
1013
........
1013
........
Not Applicable
................
1101
........
1101
........
1101
................
1102
........
Not Applicable
........
1102
........
1102
........
1102
................
1102
........
705
........
Not Applicable
........
104
........
104
........
Not Applicable
........
Not Applicable
........
104
................
1001(a)
........
1002
Reconciliation and tie between T

and Indenture, dated as of May 1
Trust Indenture Act Section
ss.310 (a)(1)..................
(a)(2)..........................
(a)(3)..........................
(a)(4)..........................
(b).............................
ss.311 (a).....................
(b).............................
(c).............................
ss.312 (a).....................
(b).............................
(c).............................
ss.313 (a).....................
(b)(1)..........................
(b)(2)..........................
(c).............................
(d).............................
ss.314 (a).....................
(a)(4)..........................
(b).............................
(c)(1)..........................
(c)(2)..........................
(c)(3)..........................
(d).............................
(e).............................
ss.315 (a).....................
(b).............................
(c).............................
........
1001(b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d).............................
........
1001(c)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d)(1)..........................
........
1001(a)(1), 1001(c)(1)
........
1001(c)(2)
........
1001(c)(3)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e).............................
........
914
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ss.316 (a).....................
................
912, 913
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a)(1)(A).......................
........
902, 912
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a)(1)(B).......................
........
913
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a)(2)..........................
........
Not Applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b).............................
........
908
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ss.317 (a)(1)..................
................
903
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a)(2)..........................
........
904
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b).............................
........
703
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ss.318 (a).....................
................
109
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARTIES.........................
...............................................1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECITALS OF THE COMPANY.........
...............................................1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GRANTING CLAUSES................
...............................................1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql First Granting Clause...........
............................................1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Second Granting Clause..........
............................................2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Third Granting Clause...........
............................................2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Excepted Property...............
............................................2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE One Definitions And Othe
r Provisions Of General Application............5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 101. Definitions.......
..........................................5
........................................6
........................................6
........................................6
........................................6
........................................6
........................................6
........................................6
........................................6
........................................7
........................................7
........................................7
........................................7
........................................7
e"......................................7
........................................7
........................................7
........................................7
........................................7
est"....................................7
........................................7
........................................8
........................................8
........................................8
........................................8
........................................8
........................................8
........................................8
........................................8
........................................8
........................................8
"1983 Mortgage".................
"Accountant"....................
"Act"...........................
"Affiliate".....................
"Authenticating Agent"..........
"Authorized Officer"............
"Authorized Purposes"...........
"Benefitted Securities".........
"Board of Directors"............
"Board Resolution"..............
"Business Day"..................
"Capitalization"................
"Capitalized Lease Liabilities".
"Class A Bondholder's Certificat
"Class A Bonds".................
"Class A Mortgage"..............
"Commission"....................
"Company".......................
"Company Order" or "Company Requ
"Corporate Trust Office"........
"corporation"...................
"Cost"..........................
"Debt"..........................
"Defaulted Interest"............
"Discount Security".............
"Dollar" or "$".................
"Electric Utility Property".....
"Eligible Obligations"..........
"Event of Default"..............
"Excepted Property".............
........................................8
........................................8
........................................8
........................................9
\page
........................................9
........................................9
........................................9
........................................9
........................................9
.......................................10
.......................................10
.......................................10
e".....................................10
.......................................10
.......................................10
.......................................10
.......................................11
.......................................11
.......................................11
.......................................11
.......................................11
.......................................11
.......................................11
.......................................11
.......................................13
.......................................13
.......................................13
"Exchange Act"..................
"Execution Date"................
"Expert"........................
"Expert's Certificate"..........
ii
"Fair Value"....................
"Funded Cash"...................
"Funded Property"...............
"Governmental Authority"........
"Government Obligations"........
"Holder"........................
"Indenture".....................
"Independent"...................
"Independent Expert's Certificat
"interest"......................
"Interest Payment Date".........
"Investment Securities".........
"Lien"..........................
"Maturity"......................
"Mortgaged Property"............
"Net Tangible Assets"...........
"Notice of Default".............
"Officer's Certificate".........
"Opinion of Counsel"............
"Outstanding"...................
"Outstanding"...................
"Paying Agent"..................
"Periodic Offering".............
.......................................13
.......................................16
.......................................16
.......................................16
.......................................16
.......................................16
.......................................17
.......................................17
.......................................17
.......................................17
.......................................17
.......................................17
.......................................17
.......................................18
.......................................18
.......................................18
.......................................18
.......................................18
y Registrar"...........................18
.......................................18
.......................................18
.......................................18
.......................................18
enture supplemental hereto"............18
.......................................18
.......................................18
.......................................19
\page
"Permitted Liens"...............
"Permitted Secured Debt"........
"Person"........................
"Place of Payment"..............
"Predecessor Security"..........
"Prepaid Liens".................
"Property Additions"............
"Purchase Money Lien"...........
"Redemption Date"...............
"Redemption Price"..............
"Regular Record Date"...........
"Release Date"..................
"Required Currency".............
"Responsible Officer"...........
"Retired Securities"............
"Secured Debt"..................
"Securities"....................
"Securities Act"................
"Security Register" and "Securit
"Special Record Date"...........
"Stated Interest Rate"..........
"Stated Maturity"...............
"Successor Company".............
"supplemental indenture" or "ind
"Tranche".......................
"Trustee".......................
"Trust Indenture Act"...........
iii
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "United
.......................................19
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION
unded Cash...............................19
; Cost...................................20
cates and Opinions.......................22
Delivered to Trustee.....................23
.........................................25
rustee or Company........................26
of Securities; Waiver....................27
t Indenture Act..........................27
and Table of Contents...................27
igns.....................................27
e........................................27
ure......................................28
.........................................28
.........................................28
Held by Trustee.........................28
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE
..............................................29
.........................................29
Certificate of Authentication............29
..............................................30
Issuable in Series.......................30
.........................................33
ication, Delivery and Dating.............33
es.......................................36
stration of Transfer and Exchange........36
ed, Lost and Stolen Securities...........37
t; Interest Rights Preserved.............38
ers......................................39
States".................
102. Funded Property; F
103. Property Additions
104. Compliance Certifi
105. Form of Documents
106. Acts of Holders...
107. Notices, Etc. to T
108. Notice to Holders
109. Conflict with Trus
110. Effect of Headings
111. Successors and Ass
112. Separability Claus
113. Benefits of Indent
114. Governing Law.....
115. Legal Holidays....
116. Investment of Cash
Two Security Forms......
201. Forms Generally...
202. Form of Trustee's
Three The Securities....
301. Amount Unlimited;
302. Denominations.....
303. Execution, Authent
304. Temporary Securiti
305. Registration, Regi
306. Mutilated, Destroy
307. Payment of Interes
308. Persons Deemed Own
.........................................39
erest....................................39
roper Currency...........................40
est Payment..............................40
.........................................40
irst and Second Series........................40
ities.........................................41
rticle...................................41
; Notice to Trustee......................41
ities to Be Redeemed.....................41
on.......................................42
on Redemption Date......................43
d in Part................................43
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql iv
\page
..............................................43
rticle...................................43
nking Fund Payments with Securities......44
rities for Sinking Fund..................44
d Covenants...................................45
ies; Lawful Possession...................45
ice or Agency............................45
es Payments to Be Held in Trust..........46
e........................................47
ertificate as to Compliance..............47
309. Cancellation......
310. Computation of Int
311. Payment to Be in P
312. Extension of Inter
313. CUSIP Numbers.....
Four Securities of the F
Five Redemption of Secur

501. Applicability of A
502. Election to Redeem
503. Selection of Secur
504. Notice of Redempti
505. Securities Payable
506. Securities Redeeme
Six Sinking Funds.......

601. Applicability of A
602. Satisfaction of Si
603. Redemption of Secu
Seven Representations an
701. Payment of Securit
702. Maintenance of Off
703. Money for Securiti
704. Corporate Existenc
705. Annual Officer's C
706. Waiver of Certain
Covenants................................47
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 707. Limitation on Secu
red Debt.................................47
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Eight Satisfaction and D
ischarge......................................51
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 801. Satisfaction and D
ischarge of Securities...................51
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 802. Satisfaction and D
ischarge of Indenture....................53
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 803. Application of Tru
st Money.................................53
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Nine Events of Default;
Remedies......................................54
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 901. Events of Default.
.........................................54
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 902. Acceleration of Ma
turity; Rescission and Annulment.........56
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 903. Collection of Inde
btedness and Suits for Enforcement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Trustee......................
...........................56
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 904. Trustee May File P
roofs of Claim...........................57
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 905. Trustee May Enforc
e Claims Without Possession of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities......................
...........................57
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 906. Application of Mon
ey Collected.............................58
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 907. Limitation on Suit
s........................................58
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 908. Unconditional Righ
t of Holders to Receive Principal,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Premium and Interest............
...........................59
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 909. Restoration of Rig
hts and Remedies.........................59
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 910. Rights and Remedie
s Cumulative.............................59
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 911. Delay or Omission
Not Waiver...............................59
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 912. Control by Holders
of Securities...........................59
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 913. Waiver of Past Def
aults....................................60
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 914. Undertaking for Co
sts......................................60
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 915. Waiver of Usury, S
tay or Extension Laws....................60
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 916. Defaults under Cla
ss A Mortgages...........................61
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 917. Receiver and Other
Remedies................................61
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Ten The Trustee.........
..............................................61
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1001. Certain Duties an
d Responsibilities.......................61
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1002. Notice of Default
s........................................62
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1003. Certain Rights of
Trustee.................................62
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1004. Not Responsible f
or Recitals or Issuance of Securities....63
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1005. May Hold Securiti
es.......................................63
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1006. Money Held in Tru
st.......................................63
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql v
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1007. Compensation and
Reimbursement............................64
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1008. Disqualification;
Conflicting Interests...................65
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1009. Corporate Trustee
Required; Eligibility...................65
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1010. Resignation and R
emoval; Appointment of Successor.........65
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1011. Acceptance of App
ointment by Successor....................67
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1012. Merger, Conversio
n, Consolidation or Succession
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Business.....................
..........................67
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1013. Preferential Coll
ection of Claims Against Company.........67
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1014. Co-trustee and Se
parate Trustees..........................68
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1015. Appointment of Au
thenticating Agent.......................69
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Eleven Holders' Lists an
d Reports by Trustee and Company..............70
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1101. Lists of Holders.
.........................................70
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1102. Reports by Truste
e and Company............................70
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Twelve Consolidation, Me
rger, Conveyance, or Other Transfer...........71
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1201. Company may Conso
lidate, etc., Only on Certain Terms......71
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1202. Successor Company
Substituted.............................73
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1203. Extent of Lien He
reof on Property of Successor Company....73
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1204. Release of Compan
y upon Conveyance or Other Transfer......74
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1205. Merger into Compa
ny; Extent of Lien Hereof................74

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1206. Transfer of Less
than Substantially All...................74
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Thirteen Supplemental In
dentures......................................75
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1301. Supplemental Inde
ntures Without Consent of Holders........75
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1302. Supplemental Inde
ntures With Consent of Holders...........77
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1303. Execution of Supp
lemental Indentures......................78
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1304. Effect of Supplem
ental Indentures.........................78
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1305. Conformity With T
rust Indenture Act.......................79
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1306. Reference in Secu
rities to Supplemental Indentures........79
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1307. Modification With
out Supplemental Indenture...............79
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Fourteen Meetings of Hol
ders; Action Without Meeting..................79
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1401. Purposes for Whic
h Meetings May Be Called.................79
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1402. Call, Notice and
Place of Meetings........................80
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1403. Persons Entitled
to Vote at Meetings......................80
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1404. Quorum; Action...
.........................................80
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1405. Attendance at Mee
tings; Determination of Voting Rights;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Conduct and Adjournment of Meeti
ngs.......................81
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1406. Counting Votes an
d Recording Action of Meetings...........82
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1407. Action Without Me
eting....................................82
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Fifteen Immunity of Inco
rporators, Shareholders, Officers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Directors...................
..............................82
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1501. Liability Solely
Corporate................................82
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vi
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Sixteen Issuance of Secu
rities Prior to the Release Date..............83
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1601. General..........
.........................................83
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1602. Issuance of Secur

ities on the Basis of Class A Bonds......83
ities on the Basis of Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Additions.......................
..........................85
ities on the Basis of Retired
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities......................
..........................87
ities on the Basis of Deposit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Cash.........................
..........................88
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Seventeen Class A Bonds;
Additional Class A Mortgages; Discharge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Class A Mortgage.............
............................89
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1701. Registration and
Ownership of Class A Bonds...............89
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1702. Payments on Class
A Bonds.................................89
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1703. Surrender of Clas
s A Bonds................................90
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1704. No Transfer of Cl
ass A Bonds..............................90
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1705. Voting of Class A
Bonds...................................90
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1706. Designation of Ad
ditional Class A Mortgages...............91
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1707. Discharge of Clas
s A Mortgage.............................93
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE Eighteen Possession, Use
and Release of Mortgaged Property............96
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1801. Quiet Enjoyment..
.........................................96
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1802. Dispositions with
out Release..............................96
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1803. Release of Mortga
ged Property.............................97
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1804. Release of Proper
ty Not Constituting Funded Property.....100
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1805. Release of Minor
Properties..............................101
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1806. Withdrawal or Oth
er Application of Funded Cash;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Money Obligations......
.........................102
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1807. Release of Proper
ty Taken by Eminent Domain, etc.........104
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1808. Alternative Relea
se Provision............................105
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1809. Disclaimer or Qui
tclaim..................................105
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1810. Miscellaneous....
........................................106
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1811. Establishment of

the Release Date........................107
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1812. Preservation of L
ien.....................................108
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1813. Maintenance of Pr
operties................................108
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1814. Payment of Taxes;
Discharge of Liens.....................108
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1815. Insurance........
........................................109
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1816. Recording, Filing
, etc...................................112
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Testimonium.....................
.............................................111
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signatures......................
.............................................111
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A - DESCRIPTION OF REA
L PROPERTY THAT IS MORTGAGED PROPERTY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AS OF THE EXECUTION DATE........
...............................A-1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B - MODIFICATIONS OF C
LASS A MORTGAGES.............................B-1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vii
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS INSTRUMENT GRANTS A SECURIT
Y INTEREST BY A UTILITY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS INSTRUMENT CONTAINS AFTER-A
CQUIRED PROPERTY PROVISIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDENTURE AND DEED OF TRUST, dat
ed as of May 1, 2002 (the "Execution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date") between ONCOR ELECTRIC DE
LIVERY COMPANY, a Texas corporation (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Company"), having its principal
office at Energy Plaza, 1601 Bryan Street,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dallas, Texas 75201 and THE BANK
OF NEW YORK, a New York banking corporation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql having its principal corporate t
rust office at 101 Barclay Street, New York, New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York 10286, as Trustee (the "Tru
stee").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECITALS OF THE COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company has duly authorized
the execution and delivery of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture to provide for the iss
uance from time to time of its debt securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Securities") in an unlimit
ed aggregate principal amount, to be issued in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one or more series as contemplat
ed herein, and to provide security for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of the principal of and
premium and interest, if any, on the Securities;

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prior to the Release Date (as he
reinafter defined), the Outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities will be secured by a
lien on the Mortgaged Property (as hereinafter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined) to the extent provided
herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company may issue Class A Bo
nds (as hereinafter defined) of one or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more series and deliver such Cla
ss A Bonds to the Trustee to hold in trust for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the benefit of the Holders (as h
ereinafter defined) from time to time of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding Securities, and purs
uant to the terms and provisions hereof, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may require the Trustee
to deliver to the Company for cancellation any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all Class A Bonds held by th
e Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All acts necessary to make this
Indenture a valid agreement of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company have been performed. For
all purposes of this Indenture, except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise expressly provided her
ein or unless the context otherwise requires,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capitalized terms used herein sh
all have the meanings assigned to them in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article One of this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GRANTING CLAUSES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW, THEREFORE, THIS INDENTURE W
ITNESSETH, that, in consideration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the premises and of the purchase
of the Securities by the Holders thereof, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in order to secure the payment o
f the principal of and premium, if any, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest, if any, on all Securit
ies from time to time Outstanding and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance of the covenants the
rein and herein contained, and to declare the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and conditions on which su
ch Securities are secured, the Company hereby
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grants, bargains, sells, conveys
, assigns, transfers, mortgages, pledges, sets
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql over and confirms to the Trustee
, in trust, and grants to the Trustee a security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in and lien on, the fol
lowing (subject, however, to the terms and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions set forth in this Ind
enture):
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FIRST GRANTING CLAUSE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All right, title and interest of
the Company, as of the Execution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date, in and to all property, re
al, personal and mixed, wherever

perty), including without limitation
the Company in and to the following
Excepted Property): (a) all real
and other interests in real property
or referred to in Exhibit A attached
y this reference; (b) all facilities,
\page
s for the transmission and
including, but not limited to, all
, transformers, poles, lines, cables,
ers, regulators and all other property
l of such purposes; (c) all buildings,
or improvements in addition to those
d in clauses (a) and (b) above;
ng, data storage, data transmission
ties, equipment and apparatus
aintenance of any facilities,
described or referred to in clause
regoing property in the process of
ions permitted by
d Section 1205, all right, title and
roperty, real, personal and mixed,
epted Property) which may be hereafter
g the intention of the Company that
e Company after the Execution Date
located (other than Excepted Pro

all right, title and interest of
property so located (other than
property owned in fee, easements
which are specifically described
hereto and incorporated herein b
machinery, equipment and fixture

distribution of electric energy
switchyards, towers, substations
conduits, ducts, conductors, met
used or to be used for any or al
offices, warehouses, structures
referred to or otherwise include
(d) all computers, data processi
and/or telecommunications facili
necessary for the operation or m
machinery, equipment or fixtures
(b) above; and (e) all of the fo
construction;
SECOND GRANTING CLAUSE
Subject to the applicable except
Section 1810(d), Section 1203 an
interest of the Company in all p
wherever located (other than Exc
acquired by the Company, it bein
all such property acquired by th
shall be as fully embraced withi
n and subjected to the Lien hereof as

he Company as of the Execution Date;
, from time to time after the
y an instrument supplemental to this
ien hereof by the Company, the Trustee
ve the same at any time as additional
erstood that any such subjection to
Property as additional security may be
s, limitations or conditions
on of such property or the proceeds
such instrument;
g, however, from the Lien of this
nterest of the Company in and to the
owned or hereafter acquired (herein
rty"):
or other financial
securities accounts, shares of
sts, general or limited
y companies, bonds, notes, other
her securities, security
erty, of whatsoever kind and
livered to, deposited with or
required so to be;
ting agreements and other
d nature; all contract rights,
ts and chattel paper (except to
if such property were owned by t

and
THIRD GRANTING CLAUSE
Any Excepted Property, which may
Execution Date, by delivery or b
Indenture, be subjected to the L
being hereby authorized to recei
security hereunder; it being und
the Lien hereof of any Excepted
made subject to such reservation
respecting the use and dispositi
thereof as shall be set forth in
EXCEPTED PROPERTY
Expressly excepting and excludin
Indenture all right, title and i
following property, whether now
sometimes called "Excepted Prope
(a) all cash on hand or in banks
institutions, deposit accounts,
stock, interests in business tru
partnerships or limited liabilit
evidences of indebtedness and ot
entitlements and investment prop
nature, not hereafter paid or de
held by the Trustee hereunder or
(b) all contracts, leases, opera
agreements of whatsoever kind an
bills, notes and other instrumen
constitute securities, security
rty, in which case they are
\page
n of this Indenture under
income and earnings, all
ights to payment, payment
s, transition property, and all
d profits, claims, credits,
nmental and other licenses,
d allowances; and all patents,
rights, patent applications,
hts and other intellectual
s, choses in action, commercial
property and general intangibles
omputer software;
ks, truck cranes, tractors,
d movable equipment; all rolling
oad equipment; all vessels,
equipment; all airplanes,
d other flight equipment; all
used in connection with any of
property of such character that
erest therein or other Lien
niform Commercial Code as in
ich such property is located;
ares, merchandise and
f sale or lease in the ordinary
the extent that any of the same

entitlements or investment prope
separately excepted from the Lie

clause (a) above); all revenues,
accounts, accounts receivable, r
intangibles and unbilled revenue
rents, tolls, issues, product an
demands and judgments; all gover
permits, franchises, consents an
patent licenses and other patent
trade names, trademarks, copyrig
property; and all claims, credit
tort claims and other intangible
including, but not limited to, c
(c) all automobiles, buses, truc
trailers and similar vehicles an
stock, rail cars and other railr
boats, barges, and other marine
helicopters, aircraft engines an
parts, accessories and supplies
the foregoing; and all personal
the perfection of a security int
thereon is not governed by the U
effect in the jurisdiction in wh
(d) all goods, stock in trade, w
inventory held for the purpose o
s, supplies, inventory and other
are consumable (otherwise than
eir use in the operation of the
cluding nuclear fuel, whether or
onsumable in the operation of the
parate components of any fuel in
ts exist at any time before,
e use thereof as fuel; all hand
ipment; all furniture and
ata processing, data storage,
tions and other facilities,
in any case, are used primarily
urposes or are otherwise not
aintenance of the facilities,
described or referred to in
he First Granting Clause of this
oil and other minerals and
nterests in any of the foregoing,
timber shall have been mined or
from the land; and all electric
l or artificial), steam, water
oduced, manufactured, purchased
pany;
s, gas rights, wells,
es, or facilities, equipment or
\page
course of business; all material

items of personal property which
by ordinary wear and tear) in th
Mortgaged Property; all fuel, in
not any such fuel is in a form c
Mortgaged Property, including se
the forms in which such componen
during or after the period of th
and other portable tools and equ
furnishings; and computers and d
data transmission, telecommunica
equipment and apparatus, which,
for administrative or clerical p
necessary for the operation or m
machinery, equipment or fixtures
clause (b), (c), (d) or (e) of t
Indenture;
(e) all coal, lignite, ore, gas,
all timber, and all rights and i
whether or not such minerals or
extracted or otherwise separated
energy and capacity, gas (natura
and other products generated, pr
or otherwise acquired by the Com
(f) all real property, leasehold
gathering, tap or other pipe lin
apparatus, in any case used or t
o be used primarily for the

al gas;
bject of a lease agreement
e and all right, title and
o such property and in, to and
her or not such lease agreement
and mixed, which prior to
ased from the Lien of the 1983
and mixed, which subsequent
released from the Lien of this
o Section 1811, and any
itions to such properties and
itutions of or for any parts
of the State of Texas;
nts used by the Company in
nd
constructed by the Company
sion and distribution business;
to the provisions of Section 1203,
currence of an Event of Default, the
or co-trustee appointed under Section
ursuant to Section 917 or otherwise,
on of all or substantially all the
t permitted by law, all the Excepted
o in the foregoing clauses (c) and (d)
production or gathering of natur

(g) all property which is the su
designating the Company as lesse
interest of the Company in and t
under such lease agreement, whet
is intended as security;
(h) all property, real, personal
the Execution Date has been rele
Mortgage;
(i) all property, real, personal
to the Execution Date, has been
Indenture, other than pursuant t
improvements, extensions and add
renewals, replacements and subst
thereof;
(j) all property located outside
(k) any and all property and pla
the generation of electricity; a
(l) all property not acquired or
for use in its electric transmis
provided, however, that, subject
(x) if, at any time after the oc
Trustee, or any separate trustee
1014 or any receiver appointed p
shall have entered into possessi
Mortgaged Property, to the exten
Property described or referred t
then owned or held or thereafter
acquired by the Company, to the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent that the same is used in
connection with, or otherwise relates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or is attributable to, the Mortg
aged Property, shall immediately, and,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the case of any Excepted Prop
erty described or referred to in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (g), to the extent that t
he same is used in connection with, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise relates or is attribut
able to, the Mortgaged Property, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand of the Trustee or such ot
her trustee or receiver, become
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the Lien of this Inde
nture, junior and subordinate to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liens at that time existing on s
uch Excepted Property, and the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or such other trustee or receive
r may, to the extent permitted by law
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or by the terms of any such othe
r Lien (and subject to the rights of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the holders of all such other Li
ens), at the same time likewise take
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possession thereof, and (y) when
ever all Events of Default shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been cured and the possession of
all or substantially all of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property shall have be
en restored to the Company, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Excepted Property shall again be
excepted and excluded from the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof to the extent set forth a
bove; it being understood that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may, however, pursuant t
o Third Granting Clause, subject any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Excepted Property to the Lien of
this Indenture whereupon the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall cease to be Excepted Prope
rty;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO HAVE AND TO HOLD all such pro
perty, real, personal and mixed, unto
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee, its successors in t
rust and their assigns forever;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBJECT, HOWEVER, to Permitted L
iens; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBJECT, FURTHER, to the conditi
on that, with respect to any property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is now or hereafter become
s subject to the Lien of any Class A Mortgage,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lien of this Indenture shall
at all times be junior, subject and subordinate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Lien of such Class A Mort
gage;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN TRUST, NEVERTHELESS, for the
equal and ratable benefit and security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Holders from time to time
of all Outstanding Securities without any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql priority of any such Security ov
er any other such Security;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROVIDED, HOWEVER, that the righ
t, title and interest of the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in and to the Mortgaged Property
shall cease, terminate and become void in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with, and subject to
the conditions set forth in, Article Eight or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1811 hereof, and if the
principal of and premium and interest, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Securities shall have bee
n paid to the Holders thereof, or shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been paid to the Company pursuan
t to Section 703 hereof or to the appropriate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authority pursuant
to applicable law after the Maturity thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then and in that case this Inden
ture shall terminate, and the Trustee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execute and deliver to the Compa
ny such instruments as the Company shall require
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to evidence such termination; ot
herwise this Indenture, and the estate and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights hereby granted, shall be
and remain in full force and effect; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IT IS HEREBY COVENANTED AND AGRE
ED by and between the Company and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee that all the Securities
are to be authenticated and delivered, and that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Mortgaged Property is to be
held, subject to the further covenants,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions and trusts hereinafte
r set forth, and the Company hereby covenants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and agrees to and with the Trust
ee, for the equal and ratable benefit of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of the Securities, as fo
llows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 101. DEFINITIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For all purposes of this Indentu
re, except as otherwise expressly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided or unless the context o
therwise requires:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the terms defined in this Ar
ticle have the meanings assigned to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql them in this Article and include
the plural as well as the singular;

t definition which are defined in the
on the Execution Date, either directly or by
ings assigned to them therein;
t definition which are defined in the
ork as in effect on the Execution Date shall
em therein;
erwise defined herein have the
ordance with generally accepted accounting
and, except as otherwise herein expressly
cepted accounting principles" with respect to
itted hereunder shall mean such accounting
\page
pted in the United States at the date of such
of the Company from time to time, at the
r, that in determining generally accepted
to the Company, effect shall be given, to the
ule or regulation of any administrative agency,
vernmental body having jurisdiction over the
" or a "Section" refers to an Article
, of this Indenture; and
and "hereunder" and other words of
enture as a whole and not to any particular
ision.
ortgage and Deed of Trust, dated as of
(b) all terms used herein withou

Trust Indenture Act as in effect
reference therein, have the mean
(c) all terms used herein withou
Uniform Commercial Code of New Y
have the meanings assigned to th
(d) all accounting terms not oth
meanings assigned to them in acc
principles in the United States,
provided, the term "generally ac
any computation required or perm
principles as are generally acce

computation or, at the election
Execution Date; provided, howeve
accounting principles applicable
extent required, to any order, r
regulatory authority or other go
Company;
(e) any reference to an "Article
or a Section, as the case may be
(f) the words "herein", "hereof"
similar import refer to this Ind
Article, Section or other subdiv
"1983 MORTGAGE" shall mean the M
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 1, 1983, by and between

the Company (formerly TXU Electric Delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company), which succeeded to and
was substituted for TXU Electric Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (formerly Texas Utilities Electr
ic Company and now named TXU US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company), and Irving Trust Compa
ny (now The Bank of New York), as supplemented
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and modified from time to time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ACCOUNTANT" means a person enga
ged in the accounting profession or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise qualified to pass on a
ccounting matters (including, but not limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to, a Person certified or licens
ed as a public accountant, whether or not then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql engaged in the public accounting
profession), which Person, unless required to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be Independent, may be an employ
ee or Affiliate of the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ACT", when used with respect to
any Holder of a Security, has the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning specified in Section 106
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "AFFILIATE" of any specified Per
son means any other Person directly or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly controlling or contro
lled by or under direct or indirect common
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control with such specified Pers
on. For the purposes of this definition,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CONTROL" when used with respect
to any specified Person means the power to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql direct generally the management
and policies of such Person, directly or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly, whether through the
ownership of voting securities, by contract or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise; and the terms "CONTRO
LLING" and "CONTROLLED" have meanings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql correlative to the foregoing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "AUTHENTICATING AGENT" means any
Person or Persons (other than the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or an Affiliate of the C
ompany) authorized by the Trustee to act on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf of the Trustee to authent
icate the Securities of one or more series.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "AUTHORIZED OFFICER" means the C
hairman of the Board, the Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chairman, the President, any Vic
e President, the Treasurer, any Assistant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasurer, or any other officer,
manager or agent of the Company duly authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a Board Resolution t
o act in respect of matters relating to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "AUTHORIZED PURPOSES" means the
authentication and delivery of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, the release of prope
rty and/or the withdrawal of cash under any of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of this Indenture
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "BENEFITTED SECURITIES" shall ha
ve the meaning specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 707.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "BOARD OF DIRECTORS" means eithe
r the board of directors, board of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql managers or similar governing bo
dy of the Company or any committee thereof duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized to act in respect of
matters relating to this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "BOARD RESOLUTION" means a copy
of a resolution certified by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary, an Assistant Secretar
y or an Authorized Officer of the Company to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been duly adopted by the Bo
ard of Directors and to be in full force and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect on the date of such certi
fication, and delivered to the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "BUSINESS DAY", when used with r
espect to a Place of Payment or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other particular location specif
ied in the Securities or this Indenture, means
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any day, other than a Saturday o
r Sunday, which is not a day on which banking
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql institutions or trust companies
in such Place of Payment or other location are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally authorized or required
by law, regulation or executive order to remain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql closed, except as may be otherwi
se specified as contemplated by Section 301.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CAPITALIZATION" has the meaning
specified in Section 707.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CAPITALIZED LEASE LIABILITIES"
has the meaning specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CLASS A BONDHOLDER'S CERTIFICAT
E" has the meaning specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CLASS A BONDS" means bonds or o
ther obligations now or hereafter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued and Outstanding under any
Class A Mortgage or Mortgages.
3 Mortgage and each other mortgage or
re, as amended and supplemented from time to
on that is subsequently merged into or
s a party at the time of such merger or
onstitutes a Lien on property conveyed or
pany and (B) the obligations of the mortgagor
ed by the Company, and, in the case of either
after designated an additional Class A Mortgage
eto executed and delivered in accordance with
s and Exchange Commission, as from
d under the Exchange Act, or, if at any time
mmission is not existing and performing the
the Trust Indenture Act, then the body, if any,
ime.
as the "Company" in the first
l a successor Person shall have become such
sions of this Indenture, and thereafter
sor Person.
EST" mean, respectively, a written
y be, signed in the name of the Company by an
to the Trustee.
he office of the Trustee at which at
e trust business shall be principally
e Execution Date is located at 101 Barclay
New York 10286.
\page
"CLASS A MORTGAGE" means the 198

deed of trust or similar indentu
time, (i) to which any corporati
consolidated with the Company wa
consolidation or (ii)(A) which c
otherwise transferred to the Com
under which have been duly assum
(i) or (ii) above, which is here
in an indenture supplemental her
Section 1706.
"COMMISSION" means the Securitie
time to time constituted, create
after the Execution Date such Co
duties now assigned to it under
performing such duties at such t
"COMPANY" means the Person named
paragraph of this Indenture unti
pursuant to the applicable provi
"Company" shall mean such succes
"COMPANY ORDER" or "COMPANY REQU
order or request, as the case ma
Authorized Officer and delivered
"CORPORATE TRUST OFFICE" means t
any particular time its corporat
administered, which office at th
Street, Floor 21 West, New York,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CORPORATION" means a corporatio
n, association, company, limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability company, partnership,
limited partnership, joint stock company or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business trust, and references t
o "corporate" and other derivations of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "corporation" herein shall be de
emed to include appropriate derivations of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "COST" with respect to Property
Additions has the meaning specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "DEBT" has the meaning specified
in Section 707.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "DEFAULTED INTEREST" has the mea
ning specified in Section 307.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "DISCOUNT SECURITY" means any Se
curity which provides for an amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than the principal amount t
hereof to be due and payable upon a declaration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of acceleration of the Maturity
thereof pursuant to Section 902. "Interest" with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a Discount Security m
eans interest, if any, borne by such Security at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Stated Interest Rate.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "DOLLAR" or "$" means a dollar o
r other equivalent unit in such coin
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or currency of the United States
of America as at the time shall be legal tender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the payment of public and pr
ivate debts.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ELECTRIC UTILITY PROPERTY" mean
s any facilities, machinery, equipment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and fixtures for the transmissio
n and distribution of electric energy, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql switchyards, towers, substations
, transformers, poles, lines, cable, conduits,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ducts, conductors, meters, regul
ators and all other property of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql real or personal, or improvement
s, extensions, additions, renewals or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacements of the foregoing, i
n each case used or useful or to be used in or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with the business
of transmitting and distributing electric energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the character described in Fi
rst Granting Clause or Second Granting Clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (without regard to whether the R
elease Date has occurred), whether owned by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company at the Execution Date or
hereafter acquired (other than Excepted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property with respect to all of
the property described in this definition).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ELIGIBLE OBLIGATIONS" means:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) with respect to Securities d
enominated in Dollars, Government
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations or, if specified pur
suant to Section 301 with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Securities, other Investment
Securities; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) with respect to Securities d
enominated in a currency other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than Dollars or in a composite c
urrency, such other obligations or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments as shall be specifie
d with respect to such Securities, as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated by Section 301.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "EVENT OF DEFAULT" has the meani
ng specified in Section 901.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "EXCEPTED PROPERTY" has the mean
ing specified in the granting clauses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "EXCHANGE ACT" means the Securit
ies Exchange Act of 1934, as amended.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "EXECUTION DATE" has the meaning
specified in the first paragraph of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "EXPERT" means a Person which is
an engineer, appraiser or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expert and which, with respect t
o any certificate to be signed by such Person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and delivered to the Trustee, is
qualified to pass upon the matters set forth in
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such certificate. For purposes o
f this definition, (a) "engineer" means a Person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql engaged in the engineering profe
ssion or otherwise qualified to pass upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql engineering matters (including,
but not limited to, a Person licensed as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql professional engineer, whether o
r not then engaged in the engineering
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql profession) and (b) "appraiser"
means a Person engaged in the business of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appraising property or otherwise
qualified to pass upon the Fair Value or fair
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market value of property.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "EXPERT'S CERTIFICATE" means a c
ertificate signed by an Authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer and by an Expert (which

Expert (a) shall be selected either by the Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors or by an Authorized
Officer, the execution of such certificate by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Authorized Officer to be co
nclusive evidence of such selection, and (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as otherwise required in
Sections 1206, 1603, 1707, 1810, may be an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee or Affiliate of the Com
pany) and delivered to the Trustee. The amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stated in any Expert's Certifica
te as to the Cost, Fair Value or fair market
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value of property shall be concl
usive and binding upon the Company, the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Holders of the Securitie
s.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "FAIR VALUE", with respect to pr
operty, means the fair value of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property as may be determined by
reference to (a) the amount which would be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql likely to be obtained in an arm'
s-length transaction with respect to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property between an informed and
willing buyer and an informed and willing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seller, under no compulsion, res
pectively, to buy or sell, (b) the amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment with respect to such
property which, together with a reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql return thereon, would be likely
to be recovered through ordinary business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations or otherwise, (c) the
Cost, accumulated depreciation, and replacement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cost with respect to such proper
ty and/or (d) any other relevant factors;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that (x) the
Fair Value of property shall be determined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without deduction for any Liens
on such property prior to the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture (except as otherwise p
rovided in Section 1803) and (y) the Fair Value
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company of Property Addit
ions may be of less value to a Person which is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not the owner or operator of the
Mortgaged Property or any portion thereof than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to a Person which is such owner
or operator. Fair Value may be determined,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without physical inspection, by
the use of accounting and engineering records
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other data maintained by the
Company or otherwise available to the Expert
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certifying the same.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "FUNDED CASH" has the meaning sp
ecified in Section 102.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "FUNDED PROPERTY" has the meanin
g specified in Section 102.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "GOVERNMENTAL AUTHORITY" means t
he government of the United States or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any State or Territory thereo
f or of the District of Columbia or of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql county, municipality or other po
litical subdivision of any thereof, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql department, agency, authority or
other instrumentality of any of the foregoing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "GOVERNMENT OBLIGATIONS" means s
ecurities which are (a) (i) direct
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of the United States
where the payment or payments thereunder are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supported by the full faith and
credit of the United States or (ii) obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a Person controlled or superv
ised by and acting as an agency or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrumentality of the United St
ates where the timely payment or payments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder are unconditionally g
uaranteed as a full faith and credit obligation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the United States or (b) depo
sitory receipts issued by a bank (as defined in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(a)(2) of the Securitie
s Act, which may include the Trustee or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paying Agent) as custodian with
respect to any such Government Obligation or a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specific payment of interest on
or principal of or other amount with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such Government Obligation h
eld by such custodian for the account of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of a depository receipt,
provided that (except as required by law) such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql custodian is not authorized to m
ake any deduction from the amount payable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of such depository receip
t from any amount received by the custodian in
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of the Government Obliga
tion or the specific payment of interest on or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal of or other amount wit
h respect to the Government Obligation evidenced
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by such depository receipt.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "HOLDER" means a Person in whose
name a Security is registered in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Register.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "INDENTURE" means this instrumen
t as originally executed and as it may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time be supplemente
d or amended by one or more indentures
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental hereto entered into
pursuant to the applicable provisions hereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including, for all purposes of t
his instrument and any such supplemental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indenture, the provisions of the

Trust Indenture Act that are deemed to be a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part of and govern this Indentur
e and any such supplemental indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively. The term "Indentur
e" shall also include the provisions or terms of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular series of Securities
established in any Officer's Certificate, Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolution or Company Order deli
vered pursuant to Sections 201, 301, 303 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "INDEPENDENT", when applied to a
ny Accountant or Expert, means such a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person who (a) is in fact indepe
ndent, (b) does not have any direct material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial interest in the Compan
y or in any other obligor upon the Securities or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any Affiliate of the Company
or of such other obligor, (c) is not connected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Company or such other o
bligor as an officer, employee, promoter,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriter, trustee, partner, d
irector or any person performing similar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql functions and (d) is approved by
the Trustee in the exercise of reasonable care.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "INDEPENDENT EXPERT'S CERTIFICAT
E" means a certificate signed by an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Independent Expert and delivered
to the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "INTEREST" with respect to a Dis
count Security means interest, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql borne by such Security at a Stat
ed Interest Rate rather than interest calculated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at any imputed rate.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "INTEREST PAYMENT DATE", when us
ed with respect to any Security, means
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Stated Maturity of an instal
lment of interest on such Security.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "INVESTMENT SECURITIES" means an
y of the following obligations or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities on which neither the
Company, any other obligor on the Securities nor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Affiliate of either is the o
bligor: (a) Government Obligations; (b) interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bearing deposit accounts (which
may be represented by certificates of deposit)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any national or state bank (w
hich may include the Trustee or any Paying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent) or savings and loan assoc
iation which has outstanding securities rated by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a nationally recognized rating o
rganization in either of the two (2) highest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rating categories (without regar
d to modifiers) for short term securities or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the three (3) highest rat
ing categories (without regard to modifiers) for

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long term securities; (c) banker
s' acceptances drawn on and accepted by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial bank (which may inclu
de the Trustee or any Paying Agent) which has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding securities rated by
a nationally recognized rating organization in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either of the two (2) highest ra
ting categories (without regard to modifiers)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for short term securities or in
any of the three (3) highest rating categories
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (without regard to modifiers) fo
r long term securities; (d) direct obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, or obligations the principal
of and interest on which are unconditionally
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guaranteed by, any State or Terr
itory of the United States or the District of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Columbia, or any political subdi
vision of any of the foregoing, which are rated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by a nationally recognized ratin
g organization in either of the two (2) highest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rating categories (without regar
d to modifiers) for short term securities or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the three (3) highest rat
ing categories (without regard to modifiers) for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long term securities; (e) bonds
or other obligations of any agency or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrumentality of the United St
ates; (f) corporate debt securities which are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rated by a nationally recognized
rating organization in either of the two (2)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql highest rating categories (witho
ut regard to modifiers) for short term
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities or in any of the thre
e (3) highest rating categories (without regard
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to modifiers) for long term secu
rities; (g) repurchase agreements with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any of the foregoing obligati
ons or securities with any banking or financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql institution (which may include t
he Trustee or any Paying Agent) which has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding securities rated by
a nationally recognized rating organization in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either of the two (2) highest ra
ting categories (without regard to modifiers)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for short term securities or in
any of the three (3) highest rating categories
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (without regard to modifiers) fo
r long term securities; (h) securities issued by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any regulated investment company
(including any investment company for which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee or any Paying Agent is t
he advisor), as defined in Section 851 of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Internal Revenue Code of 1986, a
s amended, or any successor section of such Code

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or successor federal statute, pr
ovided that the portfolio of such investment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company is limited to obligation
s or securities of the character and investment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quality contemplated in clauses
(a) through (f) above and repurchase agreements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are fully collateralized b
y any of such obligations or securities; and (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other obligations or securit
ies which may lawfully be purchased by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee in its capacity as such.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "LIEN" means any mortgage, deed
of trust, pledge, security interest,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encumbrance, easement, lease, re
servation, restriction, servitude, charge or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar right and any other lien
of any kind, including, without limitation, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditional sale or other title
retention agreement, any lease in the nature
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, and any defect, irregul
arity, exception or limitation in record title.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "MATURITY", when used with respe
ct to any Security, means the date on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the principal of such Secu
rity or an installment of principal becomes due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and payable as provided in such
Security or in this Indenture, whether at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stated Maturity, by declaration
of acceleration, upon call for redemption or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "MORTGAGED PROPERTY" means, as o
f any particular time, all property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which at such time is subject to
the Lien of this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "NET TANGIBLE ASSETS" has the me
aning specified in Section 707.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "NOTICE OF DEFAULT" means a writ
ten notice of the kind specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 901(c).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "OFFICER'S CERTIFICATE" means a
certificate signed by an Authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer of the Company and deliv
ered to the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "OPINION OF COUNSEL" means a wri
tten opinion of counsel, who may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel for the Company, and who
shall be acceptable to the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "OUTSTANDING", when used with re
spect to Securities, means, as of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of determination, all Secur
ities theretofore authenticated and delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Indenture, except:

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Securities theretofore cance
led or delivered to the Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrar for cancellation;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Securities deemed to have be
en paid for all purposes of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture in accordance with Sec
tion 801 (whether or not the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness in respect thereof
shall be satisfied and discharged for any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Securities, the principal, p
remium, if any, and interest, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which have been fully paid pursu
ant to the third paragraph of Section 306 or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange for or in lieu of which
other Securities have been authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered pursuant to this Inden
ture, other than any such Securities in respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of which there shall have been p
resented to the Trustee proof satisfactory to it
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Company that such Securi
ties are held by a bona fide purchaser or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasers in whose hands such S
ecurities are valid obligations of the Company;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that in deter
mining whether or not the Holders of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requisite principal amount of th
e Securities Outstanding under this Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the Outstanding Securities of
any series or Tranche, have given any request,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand, authorization, direction
, notice, consent or waiver hereunder or whether
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or not a quorum is present at a
meeting of Holders of Securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) Securities owned by the Comp
any or any other obligor upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities or any Affiliate of t
he Company or of such other obligor (unless
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, such Affiliate or s
uch obligor owns all Securities Outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Indenture, or (except
for the purposes of actions to be taken by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of (i) more than one ser
ies or more than one Tranche, as the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be, voting as a class under
Section 1302) all Outstanding Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each such series and each such T
ranche, as the case may be, determined
)) shall be disregarded and deemed not to
determining whether the Trustee shall be
ch request, demand, authorization,
iver or upon any such determination as to
ecurities which the Responsible Officer of
so owned shall be so disregarded;
es so owned which have been pledged in good
ding if it is established to the reasonable
the pledgee, and not the Company, or any
of either thereof, has the right so to act
and that the pledgee is not the Company or
ities or any Affiliate of the Company or of
, further, that in no event shall any
elivered to evidence or secure, in whole or
ns in respect of other indebtedness be
y if the principal of such Security is
ity or upon mandatory redemption, at the
ch other indebtedness is payable, whether
tory redemption or acceleration, but only
the principal amount of such Security as
ount of such other indebtedness, and
scount Security that shall be deemed
ses shall be the amount of the principal
yable as of the date of such determination
on of the Maturity thereof pursuant to
Security which is denominated in a
n a composite currency that shall be deemed
ses shall be the amount of Dollars which
without regard to this clause (x

be Outstanding, except that, in
protected in relying upon any su
direction, notice, consent or wa
the presence of a quorum, only S
the Trustee actually knows to be
provided, however, that Securiti
faith may be regarded as Outstan
satisfaction of the Trustee that
such other obligor or Affiliate
with respect to such Securities
any other obligor upon the Secur
such other obligor; and provided
Security which shall have been d
in part, the Company's obligatio
deemed to be owned by the Compan
payable, whether at Stated Matur
same time as the principal of su
at Stated Maturity or upon manda
to the extent of such portion of
does not exceed the principal am
(y) the principal amount of a Di
to be Outstanding for such purpo
thereof that would be due and pa
upon a declaration of accelerati
Section 902; and
(z) the principal amount of any
currency other than Dollars or i
to be Outstanding for such purpo
could have been purchased by the
principal amount (or, in the case of a

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Discount Security, the Dollar eq
uivalent on the date determined as set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth below of the amount determ
ined as provided in (y) above) of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currency or composite currency e
videnced by such Security, in each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case certified to the Trustee in
an Officer's Certificate, based (i) on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql average of the mean of the buyin
g and selling spot rates quoted by three
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql banks which are members of the N
ew York Clearing House Association selected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company in effect at 11:0
0 A.M. (New York time) in The City of New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York on the fifth Business Day p
receding any such determination or (ii) if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on such fifth Business Day it sh
all not be possible or practicable to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtain such quotations from such
three banks, on such other quotations or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alternative methods of determina
tion which shall be as consistent as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practicable with the method set
forth in (i) above;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, further, that in the c
ase of any Security the principal of which is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable from time to time withou
t presentment or surrender, the principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Security that shall be d
eemed to be Outstanding at any time for all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of this Indenture shall
be the original principal amount thereof less
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the aggregate amount of principa
l thereof theretofore paid.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "OUTSTANDING", when used with re
spect to Class A Bonds, has the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning specified in the related
Class A Mortgage.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PAYING AGENT" means any Person,
including the Company, authorized by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company to pay the principal
of, and premium, if any, or interest, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on any Securities on behalf of t
he Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PERIODIC OFFERING" means an off
ering of Securities of a series from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time to time any or all of the s
pecific terms of which Securities, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation the rate or r
ates of interest, if any, thereon, the Stated

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity or Maturities thereof a
nd the redemption provisions, if any, with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect thereto, are to be deter
mined by the Company or its agents from time to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time subsequent to the initial r
equest for the authentication and delivery of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities by the Trustee,
as contemplated in Section 301 and clause (b) of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PERMITTED LIENS" means, as of a
ny particular time, any of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Liens existing at the Execut
ion Date (including but not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited to, the Lien of the 1983
Mortgage);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) as to property acquired by t
he Company after the Execution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date, Liens existing or placed t
hereon at the time of the acquisition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof (including, but not limi
ted to, the Lien of any Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Liens for taxes, assessments
and other governmental charges
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or requirements which are not de
linquent or which are being contested
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in good faith by appropriate pro
ceedings;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) mechanics', workmen's, repai
rmen's, materialmen's,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warehousemen's, and carriers' Li
ens, other Liens incident to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction, Liens or privilege
s of any employees of the Company for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql salary or wages earned, but not
yet payable, and other Liens,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including without limitation Lie
ns for worker's compensation awards,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising in the ordinary course o
f business for charges or requirements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are not delinquent or whic
h are being contested in good faith
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and by appropriate proceedings;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Liens in respect of attachme
nts, judgments or awards arising
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql out of judicial or administrativ
e proceedings (i) in an amount not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceeding the greater of (A) Ten
Million Dollars ($10,000,000) and (B)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql three percent (3%) of the sum of
(1) the principal amount of the
\page
(2) the principal amount of Class A
n Class A Bonds delivered to and held
ons 1602 and 1701 or (ii) with respect
n good faith be prosecuting an appeal
nd with respect to which the Company
cution pending such appeal or other
to prosecute an appeal or other
ons or other rights of others in,
, regulations and restrictions
rities, exceptions and limitations in
or any part thereof; provided,
ases, reservations, rights, laws,
ts, irregularities, exceptions and
ate materially impair the use by the
y considered as a whole for the
the Company;
eptions and limitations in title
ts-of-way in favor of the Company or
by the Company primarily for
operty held under lease, easement,
ed, however, that (i) the Company
arent owner or owners of such real
the terms of the instrument granting
nt, license or similar right, to the
which the Company acquired the same;
eminent domain or similar statutes to
13
Securities then Outstanding and

Bonds then Outstanding other tha
by the Trustee pursuant to Secti
to which the Company shall (X) i
or other proceeding for review a
shall have secured a stay of exe
proceeding or (Y) have the right
proceeding for review;
(f) easements, leases, reservati
on, over and/or across, and laws
affecting, and defects, irregula
title to, the Mortgaged Property
however, that such easements, le
regulations, restrictions, defec
limitations do not in the aggreg
Company of the Mortgaged Propert
purposes for which it is held by
(g) defects, irregularities, exc
to real property subject to righ
otherwise or used or to be used
right-of-way purposes or real pr
license or similar right; provid
shall have obtained from the app
property a sufficient right, by
such right-of-way, lease, easeme
use thereof for the purposes for
(ii) the Company has power under
ies, exceptions or limitations or
es, exceptions and limitations may be
effort or expense; and defects,
imitations in title to flood lands,
hts;
or other obligations neither
by the Company nor on account of which
n real property or rights in or
ed by the Company for the purpose of
of electric energy, gas or water, for
raphic, radio, wireless or other
rwise for the purpose of obtaining
tion Date affecting properties
e and renewals and extensions thereof;
ties entered into after such date or
the Company after such date which, in
terms of not more than ten (10) years
s at the option of the tenant) or
\page
e use by the Company of such
rposes for which they are held by the
ensors, franchisors or permitters
ome due or for other obligations or
t of which rent or the performance of
is required under leases, subleases,
so long as the payment of such rent
remove such defects, irregularit

(iii) such defects, irregulariti
otherwise remedied without undue
irregularities, exceptions and l
flooding rights and/or water rig
(h) Liens securing indebtedness
created, assumed nor guaranteed
it customarily pays interest upo
relating to real property acquir
the transmission or distribution
the purpose of telephonic, teleg
electronic communication or othe
rights-of-way;
(i) leases existing at the Execu
owned by the Company at said dat
and leases affecting such proper
affecting properties acquired by
either case, (i) have respective
(including extensions or renewal
14
(ii) do not materially impair th
properties for the respective pu
Company;
(j) Liens vested in lessors, lic
for rent or other amounts to bec
acts to be performed, the paymen
which other obligations or acts
licenses, franchises or permits,
nce of such other obligations or acts
ntested in good faith and by
gations, duties and/or other
e, municipal or other law, or by
Governmental Authorities, upon the
hereof or the operation or use thereof
to the Mortgaged Property or any part
thereof or with respect to any
t or public purpose requirement, or
ise vested in Governmental Authorities
trictions, obligations, duties and/or
thorities may have by virtue of
rmits or contracts, or by virtue of
esignate a purchaser of or order the
r any part thereof, to terminate
rmits, contracts or other rights or to
ss of the Company; and any and all
lative to any such rights;
ernmental regulations (i) as a
any business or the exercise of any
able the Company to maintain
in any funds established to cover any
tion with workmen's compensation,
ecurity, any pension or welfare
the privileges or benefits required
ne or more of the arrangements
ii) above;
or other amounts or the performa

is not delinquent or is being co
appropriate proceedings;
(k) controls, restrictions, obli
burdens imposed by federal, stat
rules, regulations or orders of
Mortgaged Property or any part t
or upon the Company with respect
thereof or the operation or use
franchise, grant, license, permi
any rights reserved to or otherw
to impose any such controls, res
other burdens;
(l) rights which Governmental Au
franchises, grants, licenses, pe
law, to purchase, recapture or d
sale of the Mortgaged Property o
franchises, grants, licenses, pe
regulate the property and busine
obligations of the Company corre
(m) Liens required by law or gov
condition to the transaction of
privilege or license, (ii) to en
self-insurance or to participate
insurance risks, (iii) in connec
unemployment insurance, social s
benefit plan or (iv) to share in
for companies participating in o
described in clauses (ii) and (i
rty or any part thereof which are
duties or public or statutory
ve in lieu of, surety, stay or appeal
in others to take or receive any
and other minerals, any timber and/or
gas, water, steam and any other
anufactured, generated, purchased or
y or by others on property of the
\page
Persons other than the Company
ents and other instruments to which
relate to the common ownership or
all Liens on the interests of Persons
ty owned in common by such Persons and
that the enforcement of such Liens
nterests of the Company in such
;
nt and/or requirements of any
ed assignee and/or public utility or
nded for the full amount in
ich other adequate security
pursuant to Section 1802(c);
Class A Mortgage, Purchase Money
(n) Liens on the Mortgaged Prope

granted by the Company to secure
obligations or to secure, or ser
bonds;
(o) rights reserved to or vested
part of any coal, ore, gas, oil
any electric capacity or energy,
products, developed, produced, m
otherwise acquired by the Compan
Company;
15
(p) (i) rights and interests of

arising out of contracts, agreem
the Company is a party and which
joint use of property; and (ii)
other than the Company in proper
the Company if and to the extent
would not adversely affect the i
property in any material respect
(q) any restrictions on assignme
assignee to qualify as a permitt
public service corporation;
(r) any Liens which have been bo
dispute or for the payment of wh
arrangements have been made;
(s) rights and interests granted
(t) Prepaid Liens, Liens of any
Liens and all other Liens permit
ted to exist under Section 707

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (whether before or after the Rel
ease Date); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (u) any Lien of the Trustee gran
ted pursuant to Section 1007.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PERMITTED SECURED DEBT" has the
meaning specified in Section 707.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PERSON" means any individual, c
orporation, joint venture, trust or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unincorporated organization or a
ny Governmental Authority.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PLACE OF PAYMENT", when used wi
th respect to the Securities of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series, or Tranche thereof, mean
s the place or places, specified as contemplated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Section 301, at which, subjec
t to Section 702, principal of and premium, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, and interest, if any, on th
e Securities of such series or Tranche are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PREDECESSOR SECURITY" of any pa
rticular Security means every previous
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security evidencing all or a por
tion of the same debt as that evidenced by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular Security; and, for th
e purposes of this definition, any Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered unde
r Section 306 in exchange for or in lieu of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mutilated, destroyed, lost or st
olen Security shall be deemed to evidence the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same debt as the mutilated, dest
royed, lost or stolen Security.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PREPAID LIENS" means any Lien s
ecuring indebtedness for the payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of which money in the necessary
amount shall have been irrevocably deposited in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trust with the trustee or other
holder of such Lien; provided, however, that if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such indebtedness is to be redee
med or otherwise prepaid prior to the stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity thereof, any notice req
uisite to such redemption or prepayment shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been given in accordance wi
th the mortgage or other instrument creating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lien or irrevocable instruc
tions to give such notice shall have been given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such trustee or other holder.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PROPERTY ADDITIONS" has the mea
ning specified in Section 103.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PURCHASE MONEY LIEN" means, wit
h respect to any property being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired or disposed of by the C
ompany or being released from the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, a Lien on such proper
ty which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) is taken or retained by the
transferor of such property to secure
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all or part of the purchase pric
e thereof;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) is granted to one or more Pe
rsons other than the transferor which,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by making advances or incurring
an obligation, give value to enable the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grantor of such Lien to acquire
rights in or the use of such property;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) is granted to any other Pers
on in connection with the release of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such property from the Lien of t
his Indenture on the basis of the deposit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Trustee or the trustee
or other holder of a Lien prior to the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Indenture of obligations
secured by such Lien on such property (as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql well as any other property subje
ct thereto);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) is held by a trustee or agen
t for the benefit of one or more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Persons described in clause (a),
(b) and/or (c) above, provided that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien may be held, in addition, f
or the benefit of one or more other Persons
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which shall have theretofore giv
en, or may thereafter give, value to or for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the benefit or account of the gr
antor of such Lien for one or more other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) otherwise constitutes a purc
hase money mortgage or a purchase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql money security interest under ap
plicable law;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, without limiting the genera
lity of the foregoing, for purposes of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, the term Purchase Mon
ey Lien shall be deemed to include any Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described above whether or not s
uch Lien (x) shall permit the issuance or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurrence of additional indebte
dness secured by such Lien on such property, (y)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall permit the subjection to s
uch Lien of additional property and the issuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other incurrence of additiona
l indebtedness on the basis thereof and/or (z)

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have been granted prior to
the acquisition, disposition or release of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property, shall attach to or oth
erwise cover property other than the property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql being acquired, disposed of or r
eleased and/or shall secure obligations issued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior and/or subsequent to the i
ssuance of the obligations delivered in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with such acquisition
, disposition or release.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "REDEMPTION DATE", when used wit
h respect to any Security to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed, means the date fixed f
or such redemption by or pursuant to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "REDEMPTION PRICE", when used wi
th respect to any Security to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed, means the price at whi
ch it is to be redeemed pursuant to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, exclusive of accrued
and unpaid interest.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "REGULAR RECORD DATE" for the in
terest payable on any Interest Payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date on the Securities of any se
ries means the date specified for that purpose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as contemplated by Section 301.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "RELEASE DATE" shall mean the da
te chosen by the Company and specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Company Order delivered t
o the Trustee under Section 1811.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "REQUIRED CURRENCY" has the mean
ing specified in Section 311.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "RESPONSIBLE OFFICER", when used
with respect to the Trustee, means
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Vice President, Assistant Vi
ce President, Trust Officer or other officer of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee who, in the case of
each of the foregoing, is assigned by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee to its corporate trust d
epartment responsible for the administration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture that is located i
n the Corporate Trust Office.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "RETIRED SECURITIES" means any S
ecurities authenticated and delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Indenture which (a) n
o longer remain Outstanding by reason of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicability of clause (a) or (
b) in the definition of "Outstanding" (other

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than any Predecessor Security of
any Security), (b) have not been made the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under any of the provisions of t
his Indenture of one or more Authorized Purposes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (c) have not been paid, redee
med, purchased or otherwise retired by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application thereto of Funded Ca
sh.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "SECURED DEBT" has the meaning s
pecified in Section 707.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "SECURITIES" has the meaning sta
ted in the first recital of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and more particularly
means any securities authenticated and delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "SECURITIES ACT" means the Secur
ities Act of 1933, as amended.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "SECURITY REGISTER" AND "SECURIT
Y REGISTRAR" have the respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meanings specified in Section 30
5.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "SPECIAL RECORD DATE" for the pa
yment of any Defaulted Interest on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series means a
date fixed by the Trustee pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "STATED INTEREST RATE" means a r
ate (whether fixed or variable) at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which an obligation by its terms
is stated to bear simple interest. Any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculation or other determinati
on to be made under this Indenture by reference
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Stated Interest Rate on a
Security shall be made without regard to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective interest cost to the C
ompany of such Security and without regard to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Stated Interest Rate on, or
the effective cost to the Company of, any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness the Company's oblig
ations in respect of which are evidenced or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured in whole or in part by s
uch Security.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "STATED MATURITY", when used wit
h respect to any Security or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation or any installment of
principal thereof or interest thereon, means
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date on which the principal
of such obligation or such installment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal or interest is stated
to be due and payable (without regard to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions for redemption, prepa
yment, acceleration, purchase or extension).
ing set forth in Section 1201.
ENTURE SUPPLEMENTAL HERETO" means an
ding this Indenture executed and delivered
ities which (a) are of the same series
ept as to principal amount and/or date of
as the "Trustee" in the first
l a successor Trustee shall have been appointed
on 1010 or otherwise have become such with
Securities pursuant to the applicable
d thereafter "Trustee" shall mean or include
\page
e hereunder, and if at any time there is more
as used with respect to the Securities of any
th respect to Securities of that series.
of any time, the Trust Indenture Act
e.
States of America, its territories,
subject to its jurisdiction.
UNDED CASH.
e extent that the same shall then be
Mortgage;
"SUCCESSOR COMPANY" has the mean

"SUPPLEMENTAL INDENTURE" or "IND
instrument supplementing or amen
pursuant to Article Thirteen.
"TRANCHE" means a group of Secur
and (b) have identical terms exc
issuance.
"TRUSTEE" means the Person named
paragraph of this Indenture unti
by the Company pursuant to Secti
respect to one or more series of
provisions of this Indenture, an
18
each Person who is then a Truste

than one such Person, "Trustee"
series shall mean the Trustee wi
"TRUST INDENTURE ACT" means, as
of 1939 as in effect at such tim
"UNITED STATES" means the United
its possessions and other areas
SECTION 102. FUNDED PROPERTY; F
"FUNDED PROPERTY" means:
(a) all Property Additions to th
subject to the Lien of a Class A
(b) all Property Additions to th
e extent that the same shall have been

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made the basis of the authentica
tion and delivery of Securities under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture pursuant to Section 16
03;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) all Property Additions to th
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made the basis of the release of
Funded Property from the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture pursuant to Section 18
03;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) all Property Additions to th
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substituted for Funded Property
retired pursuant to Section 103;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) all Property Additions to th
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made the basis of the withdrawal
of cash held by the Trustee pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1605 or 1806; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) all Property Additions to th
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used as the basis of a credit ag
ainst, or otherwise in satisfaction of, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of any sinking, imp
rovement, maintenance, replacement or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar fund or analogous provis
ion established with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series, or any
Tranche thereof, as contemplated by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 301; provided, however,
that any such Property Additions shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cease to be Funded Property when
all of the Securities of such series or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche shall cease to be Outsta
nding.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that in any certifi
cate filed with the Trustee in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with any of the Prope
rty Additions referred to in clauses (a), (b),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c), (e) and (f) of this Section
, only a part of the Cost or Fair Value of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions described in
such certificate shall be required for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of such certificate, th
en such Property Additions shall be deemed to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Property only to the exte
nt so required for the purpose of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All Funded Property that shall b
e abandoned, destroyed, released or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise disposed of shall for
the purpose of Section 103 hereof be deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Property retired and for
other purposes of this Indenture shall thereupon

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cease to be Funded Property but
as in this Indenture provided may at any time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter again become Funded P
roperty. Neither any reduction in the Cost or
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql book value of property recorded
in the plant account of the Company, nor the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer of any amount appearing
in such account to intangible and/or adjustment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounts, otherwise than in conn
ection with actual retirements of physical
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property abandoned, destroyed, r
eleased or disposed of, and otherwise than in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the removal of s
uch property in its entirety from plant account,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to constitute a
retirement of Funded Property.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company may make allocations
, on a pro-rata or other reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis (including, but not limite
d to, the designation of specific properties or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the designation of all or a spec
ified portion of the properties reflected in one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or more generic accounts or suba
ccounts in the Company's books of account), for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the purpose of determining the e
xtent to which fungible properties, or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties not otherwise identif
ied, reflected in the same generic account or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subaccount in the Company's book
s of account constitute Funded Property or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Property retired.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "FUNDED CASH" means:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) cash, held by the Trustee he
reunder, to the extent that it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represents the proceeds of insur
ance on Funded Property (except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise provided in Section 18
15), or cash deposited in connection with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the release of Funded Property p
ursuant to Article Eighteen, or the payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the principal of, or the proc
eeds of the release of, obligations secured
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Purchase Money Lien and deliv
ered to the Trustee pursuant to Article
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eighteen, all subject, however,
to the provisions of Section 1815 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1806;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) any cash deposited with the
Trustee under Section 1605; and
stee from the payment of the principal
d held by the Trustee pursuant to Sections
; COST.
as of any particular time, any item,
h at such time is owned by the Company and is
are certified to the Trustee as the
(except as otherwise provided in Section 1803
the Cost or Fair Value to the
be (as of the date so certified), an
to Property Additions of which the
time the same became Funded Property
ss than the Cost as determined
uch Fair Value, as so certified, in
erty of the Company retired to the
r than the Funded Property, if any, in
for the release of which such
eretofore deducted from the Cost or
perty Additions theretofore certified
the Company, be added to such
may be, the sum of
\page
obligations secured by
fore so added and which the
(c) any cash received by the Tru

of Class A Bonds delivered to an
1602 and 1701.
SECTION 103. PROPERTY ADDITIONS
(a) "PROPERTY ADDITIONS" means,
unit or element of property whic
Mortgaged Property.
(b) When any Property Additions
basis of any Authorized Purpose
and Section 1806),
(i) there shall be deducted from
Company thereof, as the case may
amount equal to the Cost (or as
Fair Value to the Company at the
was certified to be an amount le
pursuant to this Section, then s
lieu of Cost) of all Funded Prop
date of such certification (othe
connection with the application
certificate is filed) and not th
Fair Value to the Company of Pro
to the Trustee, and
(ii) there may, at the option of
Cost or Fair Value, as the case
20
(1) the principal amount of any

Purchase Money Lien, not thereto
hich shall theretofore have been
trustee or other holder of a Lien
ure as the basis of the release
the Lien of this Indenture or
be;
theretofore so added and
to add, which shall theretofore
ee or the trustee or other holder
his Indenture as the proceeds of
ired (to the extent of the
ded Cash) or as the basis of the
ed from the Lien of this
n, as the case may be;
Security or Securities, or
, not theretofore so added and
to add, (I) which shall
to the Trustee as the basis of
etired or (II) the right to the
hich under the provisions of
heretofore have been waived under
s of the release of Funded
e Company (whichever shall
ns, not theretofore so added and
to add, which shall theretofore
release of Funded Property
he amount shown in the Expert's
stee in connection with such
Company then elects so to add, w

delivered to the Trustee or the
prior to the Lien of this Indent
of Funded Property retired from
such prior Lien, as the case may
(2) the amount of any cash, not
which the Company then elects so
have been delivered to the Trust
of a Lien prior to the Lien of t
insurance on Funded Property ret
portion thereof deemed to be Fun
release of Funded Property retir
Indenture or from such prior Lie
(3) the principal amount of any
portion of such principal amount
theretofore have been delivered
the release of Funded Property r
authentication and delivery of w
Section 1604 shall at any time t
Section 1803(d)(iii) as the basi
Property retired;
(4) the Cost or Fair Value to th
be less) of any Property Additio
have been made the basis of the
retired (such Fair Value to be t
Certificate delivered to the Tru
release); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) the Cost to the Company of a

ny Property Additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including Property Additions su
bject to the Lien of a Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage) not theretofore so add
ed and which the Company then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elects so to add, to the extent
that the same shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substituted for Funded Property
retired;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that the aggr
egate of the amounts added under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (ii) above shall in no ev
ent exceed the amounts deducted under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (i) above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Except as otherwise provided
in Section 1803, the term "COST" with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to Property Additions sh
all mean the sum of (i) any cash delivered in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment therefor or for the acqu
isition thereof, (ii) an amount equivalent to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fair market value in cash (a
s of the date of delivery) of any securities or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other property delivered in paym
ent therefor or for the acquisition thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the principal amount of an
y obligations secured by prior Lien (other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Class A Mortgage) upon such Pr
operty Additions outstanding at the time of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquisition thereof, (iv) the pr
incipal amount of any other obligations incurred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or assumed in connection with th
e payment for such Property Additions or for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquisition thereof and (v) any
other amounts which, in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally accepted accounting pr
inciples, are properly charged or chargeable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the plant or other property acco
unts of the Company with respect to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions as part of th
e cost of construction or acquisition thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including, but not limited to, a
ny allowance for funds used during construction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any similar or analogous amou
nt; provided, however, that, notwithstanding any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other provision of this Indentur
e,
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) with respect to Property Add
itions owned by a successor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation immediately prior to
the time it shall have become such by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidation or merger or acqui
red by a successor corporation in or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a result of a consolidation o
r merger (excluding, in any case,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions owned by the
Company immediately prior to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time), Cost shall mean the amoun
t or amounts at which such Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Additions are recorded in the pl
ant or other property accounts of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor corporation, or the pr
edecessor corporation from which such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions are acquired,
as the case may be, immediately prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such consolidation or merger;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) with respect to Property Ad
ditions which shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired (otherwise than by cons
truction) by the Company without any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration consisting of cash
, securities or other property or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurring or assumption of indeb
tedness, no determination of Cost
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be required, and, wherever
in this Indenture provision is made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Cost or Fair Value, Cost wit
h respect to such Property Additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean an amount equal to th
e Fair Value to the Company thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or, if greater, the aggregate am
ount reflected in the Company's books
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of account with respect thereto
upon the acquisition thereof; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) in no event shall the Cost
of Property Additions be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to reflect any deprecia
tion or amortization in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Property Additions, or any
adjustment to the amount or amounts at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such Property Additions ar
e recorded in plant or other property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounts due to the non-recovera
bility of investment or otherwise.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any Property Additions are sh
own by the Expert's Certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided for in Section 1603(b)(
ii) to include property which has been used or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operated by others than the Comp
any in a business similar to that in which it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been or is to be used or ope
rated by the Company, the Cost thereof need not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be reduced by any amount in resp
ect of any goodwill, going concern value rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or intangible property simul
taneously acquired for which no separate or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distinct consideration shall hav
e been paid or apportioned, and in such case the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term Property Additions as defin
ed herein may include such goodwill, going

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concern value rights and intangi
ble property.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 104. COMPLIANCE CERTIFI
CATES AND OPINIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise expressly pr
ovided in this Indenture, upon any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application or request by the Co
mpany to the Trustee to take any action under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any provision of this Indenture,
the Company shall furnish to the Trustee an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer's Certificate stating th
at in the opinion of the Authorized Officer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executing such Officer's Certifi
cate all conditions precedent, if any, provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for in this Indenture relating t
o the proposed action (including any covenants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with which constitute
s a condition precedent) have been complied with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and an Opinion of Counsel statin
g that in the opinion of such counsel all such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions precedent, if any, ha
ve been complied with, except that in the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any such application or reque
st as to which the furnishing of such documents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is specifically required by any
provision of this Indenture relating to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular application or reques
t, no additional certificate or opinion need be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnished.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Every certificate or opinion wit
h respect to compliance with a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition or covenant provided f
or in this Indenture shall include:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a statement that each Person
signing such certificate or opinion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has read such covenant or condit
ion and the definitions herein relating thereto;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) a brief statement as to the
nature and scope of the examination or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigation upon which the sta
tements or opinions contained in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate or opinion are based
;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) a statement that, in the opi
nion of each such Person, such Person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has made such examination or inv
estigation as is necessary to enable such Person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to express an informed opinion a
s to whether or not such covenant or condition

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been complied with; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) a statement as to whether, i
n the opinion of each such Person,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such condition or covenant has b
een complied with.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 105. FORM OF DOCUMENTS
DELIVERED TO TRUSTEE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any Officer's Certificate ma
y be based (without further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql examination or investigation), i
nsofar as it relates to or is dependent upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal matters, upon an opinion o
f, or representations by, counsel, and, insofar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as it relates to or is dependent
upon matters which are subject to verification
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Accountants, upon a certifica
te or opinion of, or representations by, an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accountant, and insofar as it re
lates to or is dependent upon matters which are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required in this Indenture to be
covered by a certificate or opinion of, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations by, an Expert, u
pon the certificate or opinion of, or
nless, in any case, such officer has actual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql knowledge that the certificate o
r opinion or representations with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters upon which such Officer'
s Certificate may be based as aforesaid are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql erroneous.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any Expert's Certificate may be
based (without further examination or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigation), insofar as it re
lates to or is dependent upon legal matters,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon an opinion of, or represent
ations by, counsel, and insofar as it relates to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or is dependent upon factual mat
ters, information with respect to which is in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the possession of the Company an
d which are not subject to verification by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Experts, upon a certificate or o
pinion of, or representations by, an officer or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers of the Company, unless
such expert has actual knowledge that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate or opinion or repres
entations with respect to the matters upon which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his certificate or opinion may b
e based as aforesaid are erroneous.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any certificate of an Accountant
may be based (without further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql examination or investigation), i
nsofar as it relates to or is dependent upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal matters, upon an opinion o
f, or representations by, counsel, and in so far
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as it relates to or is dependent

upon factual matters, information with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which is in the possession of
the Company and which are not subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql verification by Accountants, upo
n a certificate of, or representations by, an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer or officers of the Compa
ny, unless such Accountant has actual knowledge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the certificate or opinion
or representations with respect to the matters
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon which his certificate or op
inion may be based as aforesaid are erroneous.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any Opinion of Counsel may be ba
sed (without further examination or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigation), insofar as it re
lates to or is dependent upon factual matters,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information with respect to whic
h is in the possession of the Company, upon a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate of, or representatio
ns by, an officer or officers of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, insofar as it relates to or
is dependent upon matters which are subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql verification by Accountants upon
a certificate or opinion of, or representations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by, an Accountant, and, insofar
as it relates to or is dependent upon matters
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required in this Indenture to be
covered by a certificate or opinion of, or
pon the certificate or opinion of, or
nless such counsel has actual knowledge that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate or opinion or repres
entations with respect to the matters upon which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his opinion may be based as afor
esaid are erroneous. In addition, any Opinion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Counsel may be based (without fu
rther examination or investigation), insofar as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it relates to or is dependent up
on matters covered in an Opinion of Counsel
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rendered by other counsel, upon
such other Opinion of Counsel, unless such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel has actual knowledge tha
t the Opinion of Counsel rendered by such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel with respect to the matt
ers upon which his Opinion of Counsel may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql based as aforesaid are erroneous
. Further, any Opinion of Counsel with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the status of title to or the
sufficiency of descriptions of property, and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the existence of Liens thereon,
and/or the recording or filing of documents,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or any similar matters, may
be based (without further examination or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigation) upon (i) title in
surance policies or commitments and reports,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql abstracts of title, lien search
certificates and other similar documents or (ii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates of, or representati
ons by, officers, employees, agents and/or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representatives of the Company o
r (iii) any combination of the documents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in (i) and (ii), unl
ess, in any case, such counsel has actual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql knowledge that the document or d
ocuments with respect to the matters upon which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his opinion may be based as afor
esaid are erroneous. If, in order to render any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Opinion of Counsel provided for
herein, the signer thereof shall deem it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary that additional facts
or matters be stated in any Officer's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate, certificate of an A
ccountant or Expert's Certificate provided for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, then such certificate ma
y state all such additional facts or matters as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the signer of such Opinion of Co
unsel may request.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In any case where several ma
tters are required to be certified by,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or covered by an opinion of, any
specified Person, it is not necessary that all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such matters be certified by, or
covered by the opinion of, only one such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person, or that they be so certi
fied or covered by only one document, but one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Person may certify or give
an opinion with respect to some matters and one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or more other such Persons as to
other matters, and any such Person may certify
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or give an opinion as to such ma
tters in one or several documents. Where (i) any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person is required to make, give
or execute two or more applications, requests,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consents, certificates, statemen
ts, opinions or other instruments under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, or (ii) two or more P
ersons are each required to make, give or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execute any such application, re
quest, consent, certificate, statement, opinion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other instrument, any such ap
plications, requests, consents, certificates,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements, opinions or other in
struments may, but need not, be consolidated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form one instrument.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Whenever, subsequent to the
receipt by the Trustee of any Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolution, Officer's Certificat
e, Expert's Certificate, Opinion of Counsel or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other document or instrument, a
clerical, typographical or other inadvertent or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unintentional error or omission

shall be discovered therein, a new document or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument may be substituted th
erefor in corrected form with the same force and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect as if originally filed in
the corrected form and, irrespective of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date or dates of the actual exec
ution and/or delivery thereof, such substitute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document or instrument shall be
deemed to have been executed and/or delivered as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the date or dates required wi
th respect to the document or instrument for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it is substituted. Anythin
g in this Indenture to the contrary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notwithstanding, if any such cor
rective document or instrument indicates that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action has been taken by or at t
he request of the Company which could not have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been taken had the original docu
ment or instrument not contained such error or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission, the action so taken sh
all not be invalidated or otherwise rendered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ineffective but shall be and rem
ain in full force and effect, except to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent that such action was a re
sult of willful misconduct or bad faith. Without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limiting the generality of the f
oregoing, any Securities issued under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority of such defective docu
ment or instrument shall nevertheless be the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql valid obligations of the Company
entitled to the benefits of this Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equally and ratably with all oth
er Outstanding Securities, except as aforesaid.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 106. ACTS OF HOLDERS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any request, demand, authori
zation, direction, notice, consent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election, waiver or other action
provided by this Indenture to be made, given or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taken by Holders may be embodied
in and evidenced by one or more instruments of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantially similar tenor sign
ed by such Holders in person or by an agent duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointed in writing or, alterna
tively, may be embodied in and evidenced by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql record of Holders voting in favo
r thereof, either in person or by proxies duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointed in writing, at any mee
ting of Holders duly called and held in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the provisions o
f Article Fourteen, or a combination of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments and any such record.
Except as herein otherwise expressly provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such action shall become effecti

ve when such instrument or instruments or record
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or both are delivered to the Tru
stee and, where it is hereby expressly required,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company. Such instrument
or instruments and any such record (and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action embodied therein and evid
enced thereby) are herein sometimes referred to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the "Act" of the Holders sign
ing such instrument or instruments and so voting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at any such meeting. Proof of ex
ecution of any such instrument or of a writing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointing any such agent, or of
the holding by any Person of a Security, shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be sufficient for any purpose of
this Indenture and (subject to Section 1001)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive in favor of the Trust
ee and the Company, if made in the manner
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in this Section. The re
cord of any meeting of Holders shall be proved
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the manner provided in Sectio
n 1406.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The fact and date of the exe
cution by any Person of any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument or writing may be pro
ved by the affidavit of a witness of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execution or by a certificate of
a notary public or other officer authorized by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law to take acknowledgments of d
eeds, certifying that the individual signing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such instrument or writing ackno
wledged to him the execution thereof or may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proved in any other manner which
the Trustee and the Company deem sufficient.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Where such execution is by a sig
ner acting in a capacity other than his
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individual capacity, such certif
icate or affidavit shall also constitute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient proof of his authorit
y.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The ownership, principal amo
unt (except as otherwise contemplated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in clause (y) of the first provi
so to the definition of Outstanding) and serial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql numbers of Securities held by an
y Person, and the date of holding the same,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be proved by the Security
Register.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Any request, demand, authori
zation, direction, notice, consent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election, waiver or other Act of
a Holder shall bind every future Holder of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same Security and the Holder of
every Security issued upon the registration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer thereof or in exchange
therefor or in lieu thereof in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql anything done, omitted or suffer
ed to be done by the Trustee or the Company in

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reliance thereon, whether or not
notation of such action is made upon such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Until such time as written i
nstruments shall have been delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee with respect to t
he requisite percentage of principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities for the action contem
plated by such instruments, any such instrument
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed and delivered by or on
behalf of a Holder may be revoked with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any or all of such Securities
by written notice by such Holder or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent Holder, proven in the
manner in which such instrument was proven.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Securities of any series, or
any Tranche thereof, authenticated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and delivered after any Act of H
olders may, and shall if required by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, bear a notation in form
approved by the Trustee as to any action taken
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by such Act of Holders. If the C
ompany shall so determine, new Securities of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series, or any Tranche thereof,
so modified as to conform, in the opinion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee and the Company, to such
action may be prepared and executed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and authenticated and de
livered by the Trustee in exchange for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding Securities of such s
eries or Tranche.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) If the Company shall solicit
from Holders any request, demand,
, consent, waiver or other Act, the Company may,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at its option, fix in advance a
record date for the determination of Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to give such request, d
emand, authorization, direction, notice,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent, waiver or other Act, bu
t the Company shall have no obligation to do so.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If such a record date is fixed,
such request, demand, authorization, direction,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice, consent, waiver or other
Act may be given before or after such record
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date, but only the Holders of re
cord at the close of business on the record date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to be Holders fo
r the purposes of determining whether Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the requisite proportion of the
Outstanding Securities have authorized or agreed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or consented to such request, de

mand, authorization, direction, notice, consent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver or other Act, and for tha
t purpose the Outstanding Securities shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computed as of the record date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 107. NOTICES, ETC. TO T
RUSTEE OR COMPANY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise provided her
ein, any request, demand,
, consent, election, waiver or Act of Holders or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other document provided or permi
tted by this Indenture to be made upon, given or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnished to, or filed with, the
Trustee by any Holder or by the Company, or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company by the Trustee or by any
Holder, shall be sufficient for every purpose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder (unless otherwise expr
essly provided herein) if in writing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered personally to an offic
er or other responsible employee of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addressee, or transmitted by fac
simile transmission or other direct written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electronic means to such telepho
ne number or other electronic communications
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql address set forth for such party
below or such other address as the parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto shall from time to time d
esignate, or delivered by registered or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified mail or reputable over
night courier, charges prepaid, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable address set forth for
such party below or to such other address as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either party hereto may from tim
e to time designate:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to the Trustee, to:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporate Trust Administration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 101 Barclay Street, Floor 21W
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Vice President
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Telephone: (212) 896-7136
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Telecopy: (212) 896-7298
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to the Company, to:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy Plaza
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Treasurer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Telephone: (214) 812-5565
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Telecopy: (214) 812-8998
\page
erein shall be deemed to have been
if personally delivered, on the date of
imile transmission or other direct written
transmission, and if transmitted by registered
vernight courier, on the date of receipt.
OF SECURITIES; WAIVER.
ovided herein, where this Indenture
f any event, such notice shall be sufficiently
, to Holders if in writing and mailed,
each Holder affected by such event, at the
ears in the Security Register, not later than
than the earliest date, if any, prescribed for
ion of regular mail service or by
ll be impracticable to give such notice to
ication as shall be made with the approval of
ufficient notification for every purpose
ice to Holders is given by mail, neither the
any defect in any notice so mailed, to any
he sufficiency of such notice with respect to
nture may be waived in writing by the
notice, either before or after the event
n, and such waiver shall be the equivalent of
y Holders shall be filed with the Trustee, but
tion precedent to the validity of any action
26
Any communication contemplated h

made, given, furnished and filed
delivery, if transmitted by facs
electronic means, on the date of
or certified mail or reputable o
SECTION 108. NOTICE TO HOLDERS
Except as otherwise expressly pr
provides for notice to Holders o
given, and shall be deemed given
first-class postage prepaid, to
address of such Holder as it app
the latest date, and not earlier
the giving of such Notice.
In case by reason of the suspens
reason of any other cause it sha
Holders by mail, then such notif
the Trustee shall constitute a s
hereunder. In any case where not
failure to mail such notice, nor
particular Holder shall affect t
other Holders.
Any notice required by this Inde
Person entitled to receive such
otherwise to be specified therei
such notice. Waivers of notice b
such filing shall not be a condi
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taken in reliance upon such waiv

er.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 109. CONFLICT WITH TRUS
T INDENTURE ACT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any provision of this Indentu
re limits, qualifies or conflicts with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another provision hereof which i
s required or deemed to be included in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture by, or is otherwise go
verned by, any provision of the Trust Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act, such other provision shall
control; and if any provision hereof otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conflicts with the Trust Indentu
re Act, the Trust Indenture Act shall control
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless otherwise provided as con
templated by Section 301 with respect to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series of Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 110. EFFECT OF HEADINGS
AND TABLE OF CONTENTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Article and Section headings
in this Indenture and the Table of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contents are for convenience onl
y and shall not affect the construction hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 111. SUCCESSORS AND ASS
IGNS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All covenants and agreements in
this Indenture by the Company and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall bind their respect
ive successors and assigns, whether so expressed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or not.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 112. SEPARABILITY CLAUS
E.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In case any provision in this In
denture or the Securities shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held to be invalid, illegal or u
nenforceable, the validity, legality and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforceability of the remaining
provisions shall not in any way be affected or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impaired thereby.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 113. BENEFITS OF INDENT
URE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nothing in this Indenture or the
Securities, express or implied, shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql give to any Person, other than t
he parties hereto, their successors hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Holders of any Outstandi

ng Securities, any benefit or any legal or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equitable right, remedy or claim
under this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 114. GOVERNING LAW.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Indenture and the Securitie
s shall be governed by and construed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with the law of th
e State of New York (including without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation Section 5-1401 of the
New York General Obligations Law or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor to such statute), exce
pt to the extent that the Trust Indenture Act
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be applicable and except t
o the extent that the law of the State of Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mandatorily govern.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 115. LEGAL HOLIDAYS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In any case where any Interest P
ayment Date, Redemption Date or Stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity of any Security shall n
ot be a Business Day at any Place of Payment,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then (notwithstanding any other
provision of this Indenture or of the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than a provision in Securi
ties of any series, or any Tranche thereof, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the indenture supplemental he
reto, Board Resolution or Officer's Certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which establishes the terms of t
he Securities of such series or Tranche, which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically states that such pr
ovision shall apply in lieu of this Section)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of interest or principal
and premium, if any, need not be made at such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Place of Payment on such date, b
ut may be made on the next succeeding Business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Day at such Place of Payment wit
h the same force and effect as if made on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date, Redemptio
n Date, or Stated Maturity, and, if such payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is made or duly provided for on
such Business Day, no interest shall accrue on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the amount so payable for the pe
riod from and after such Interest Payment Date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Redemption Date or Stated Maturi
ty, as the case may be, to such Business Day.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 116. INVESTMENT OF CASH
HELD BY TRUSTEE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any cash held by the Trustee or
any Paying Agent under any provision
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Indenture shall, except
as otherwise provided in Section 1806 or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article Eight, at the request of
the Company evidenced by Company Order, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invested or reinvested in Invest
ment Securities designated by the Company (such

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company Order to contain a repre
sentation to the effect that the securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated therein constitute In
vestment Securities), any interest on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Investment Securities shall be p
romptly paid over to the Company as received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql free and clear of any Lien. Such
Investment Securities shall be held subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same provisions hereof as th
e cash used to purchase the same, but upon a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql like request of the Company shal
l be sold, in whole or in designated part, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the proceeds of such sale shall
be held subject to the same provisions hereof as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the cash used to purchase the In
vestment Securities so sold. If such sale shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql produce a net sum less than the
cost of the Investment Securities so sold, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall pay to the Trustee
or any such Paying Agent, as the case may be,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such amount in cash as, together
with the net proceeds from such sale, shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal the cost of the Investment
Securities so sold, and if such sale shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql produce a net sum greater than t
he cost of the Investment Securities so sold,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee or any such Paying A
gent, as the case may be, shall promptly pay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql over to the Company an amount in
cash equal to such excess, free and clear of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Lien. In no event shall the
Trustee be liable for any loss incurred in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the sale of any
Investment Security pursuant to this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the foregoing, i
f an Event of Default shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred and be continuing, inte
rest on Investment Securities and any gain upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sale thereof shall be held a
s part of the Mortgaged Property until such
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event of Default shall have been
cured or waived, whereupon such interest and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gain shall be promptly paid over
to the Company free and clear of any Lien.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITY FORMS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 201. FORMS GENERALLY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The definitive Securities of eac
h series shall be in substantially the

d in the indenture supplemental hereto
Board Resolution establishing such series, or
uant to such a supplemental indenture or Board
ch appropriate insertions, omissions,
ns as are required or permitted by this
ters, numbers or other marks of identification
placed thereon as may be required to comply
exchange or as may, consistently herewith, be
ting such Securities, as evidenced by their
r forms of Securities of any series are
n or in an Officer's Certificate pursuant to a
d Resolution, such Board Resolution and
hall be delivered to the Trustee at or prior to
r contemplated by Section 303 for the
uch Securities.
ntemplated by Section 301, the
be issuable in registered form without coupons.
be produced in such manner as shall be
ting such Securities, as evidenced by their
CERTIFICATE OF AUTHENTICATION.
hentication shall be in substantially
the series designated therein
ned Indenture.
_
form or forms thereof establishe

establishing such series or in a
in an Officer's Certificate purs
Resolution, in each case with su
substitutions and other variatio
Indenture, and may have such let
and such legends or endorsements
with the rules of any securities
determined by the officers execu
execution thereof. If the form o
established in a Board Resolutio
Supplemental Indenture or a Boar
Officer's Certificate, if any, s
the delivery of the Company Orde
authentication and delivery of s
Unless otherwise specified as co
Securities of each series shall
The definitive Securities shall
determined by the officers execu
execution thereof.
SECTION 202. FORM OF TRUSTEE'S
The Trustee's certificate of aut
the form set forth below:
This is one of the Securities of
referred to in the within-mentio
THE BANK OF NEW YORK,
as Trustee
By: ____________________________
Authorized Signatory
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 301. AMOUNT UNLIMITED;
ISSUABLE IN SERIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The aggregate principal amount o
f Securities which may be
r this Indenture is unlimited.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Securities may be issued in
one or more series. Subject to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql last paragraph of this Section,
prior to the authentication and delivery of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series there s
hall be established by specification in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indenture or in a B
oard Resolution or in an Officer's Certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a supplemental inden
ture or a Board Resolution:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the title of the Securities
of such series (which shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distinguish the Securities of su
ch series from Securities of all other series);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) any limit upon the aggregate
principal amount of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series which may be authent
icated and delivered under this Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (except for Securities authentic
ated and delivered upon registration of transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, or in exchange for, or in li
eu of, other Securities of such series pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 304, 305, 306, 506 or
1306 and except for any Securities which,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 303, are dee
med never to have been authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered hereunder);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) the Person or Persons (witho
ut specific identification) to whom
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any interest on Securities of su
ch series, or any Tranche thereof, shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable, if other than the Perso
n in whose name that Security (or one or more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Predecessor Securities) is regis
tered at the close of business on the Regular
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Record Date for such interest;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) the date or dates on which t
he principal of the Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series or any Tranche thereof, i

s payable or any formulary or other method or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other means by which such date o
r dates shall be determined, by reference to an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql index or other fact or event asc
ertainable outside of this Indenture or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise (without regard to any
provisions for redemption, prepayment,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration, purchase or extens
ion); and the right, if any, to extend the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity of the Securities of su
ch series, or any Tranche thereof, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duration of any such extension;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) the rate or rates at which t
he Securities of such series, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche thereof, shall bear inte
rest, if any (including the rate or rates at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which overdue principal shall be
ar interest after Maturity if different from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate or rates at which such Secu
rities shall bear interest prior to Maturity,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, if applicable, the rate or
rates at which overdue premium or interest shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bear interest, if any), or any f
ormulary or other method or other means by which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such rate or rates shall be dete
rmined by reference to an index or other fact or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event ascertainable outside of t
his Indenture or otherwise, the date or dates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from which such interest shall a
ccrue; the Interest Payment Dates and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regular Record Dates, if any, fo
r the interest payable on such Securities on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date; and the b
asis of computation of interest, if other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided in Section 310; and
the right, if any, to extend the interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment periods and the duration
of any such extension;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) the place or places at which
and/or methods (if other than as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided elsewhere in this Inden
ture) by which (i) the principal of and premium,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, and interest, if any, on
Securities of such series, or any Tranche
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, shall be payable, (ii)
registration of transfer of Securities of such
\page
may be effected, (iii) exchanges of Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such series, or any Tranche t
hereof, may be effected and (iv) notices and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demands to or upon the Company i
n respect of the Securities of such series, or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Tranche thereof, and this In
denture may be served; the Security Registrar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any Paying Agent or Agents f
or such series or Tranche; and, if such is the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case, that the principal of such
Securities shall be payable without the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql presentment or surrender thereof
;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) the period or periods within
which, or the date or dates on which,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the price or prices at which and
the terms and conditions upon which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of such series, or an
y Tranche thereof, may be redeemed, in whole or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in part, at the option of the Co
mpany and any restrictions on such redemptions;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including but not limited to a r
estriction on a partial redemption by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company of the Securities of any
series, or any Tranche thereof, resulting in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delisting of such Securities fro
m any national exchange;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) the obligation or obligation
s, if any, of the Company to redeem or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase or repay the Securities
of such series, or any Tranche thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to any sinking fund or
other mandatory redemption provisions or at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option of a Holder thereof and t
he period or periods within which or the date or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dates on which, the price or pri
ces at which and the terms and conditions upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such Securities shall be r
edeemed or purchased or repaid, in whole or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part, pursuant to such obligatio
n and applicable exceptions to the requirements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 504 in the case of ma
ndatory redemption or redemption or repayment at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the option of the Holder;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the denominations in which S
ecurities of such series, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche thereof, shall be issuab
le if other than denominations of One Thousand
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dollars ($1,000) and any integra
l multiple thereof;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) if the principal of or premi
um, if any, or interest, if any, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities of such series, o
r any Tranche thereof, are to be payable, at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election of the Company or a Hol
der thereof, in a coin or currency other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that in which the Securities are
stated to be payable, the period or periods
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within which, and the terms and
conditions upon which, such election may be made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the manner in which the amou

nt of such coin or currency payable is to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) the currency or currencies,
including composite currencies, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which payment of the principal o
f and premium, if any, and interest, if any, on
r any Tranche thereof, shall be payable (if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than Dollars) and the mann
er in which the equivalent of the principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount thereof in Dollars is to
be determined for any purpose, including for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose of determining the princ
ipal amount deemed to be Outstanding at any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) if the principal of or premi
um, if any, or interest, if any, on
r any Tranche thereof, are to be payable, or are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be payable at the election of
the Company or a Holder thereof, in securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other property, the type and
amount of such securities or other property, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the formulary or other method or
other means by which such amount shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined, and the period or pe
riods within which, and the terms and conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon which, any such election ma
y be made;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) if the amount payable in res
pect of principal of or premium, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, or interest, if any, on the
Securities of such series, or any Tranche
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, may be determined with
reference to an index or other fact or event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ascertainable outside this Inden
ture, the manner in which such amounts shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined to the extent not est
ablished pursuant to clause (e) of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (n) if other than the entire pri
ncipal amount thereof, the portion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the principal amount of Securiti
es of such series, or any Tranche thereof, which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be payable upon declaratio
n of acceleration of the Maturity thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 902;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (o) any Events of Default, in ad
dition to those specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 901, or any exceptions t

o those specified in Section 901, with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Securities of such series
, and any covenants of the Company for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of the Holders of the Se
curities of such series, or any Tranche thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in addition to those set forth i
n Article Seven, or any exceptions to those set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in Article Seven;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (p) the terms, if any, pursuant
to which the Securities of such
may be converted into or exchanged for shares of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital stock or other securitie
s of the Company or any other Person;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (q) the obligations or instrumen
ts, if any, which shall be considered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be Eligible Obligations in re
spect of the Securities of such series, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche thereof, denominated in
a currency other than Dollars or in a composite
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currency, whether Eligible Oblig
ations include Investment Securities with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to Securities of such se
ries, and any provisions for satisfaction and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharge of Securities of any s
eries, in addition to those set forth in Article
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eight, or any exceptions to thos
e set forth in Article Eight;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (r) if the Securities of such se
ries, or any Tranche thereof, are to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be issued in global form, (i) an
y limitations on the rights of the Holder or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of such Securities to tr
ansfer or exchange the same or to obtain the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration of transfer thereof
, (ii) any limitations on the rights of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder or Holders thereof to obt
ain certificates therefor in definitive form in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lieu of global form and (iii) an
y other matters incidental to such Securities;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (s) if the Securities of such se
ries, or any Tranche thereof, are to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be issuable as bearer securities
, any and all matters incidental thereto which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are not specifically addressed i
n a supplemental indenture as contemplated by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (g) of Section 1301;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (t) to the extent not establishe
d pursuant to clause (r) of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph, any limitations on th
e rights of the Holders of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Series, or any Tranche ther
eof, to transfer or exchange such Securities or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to obtain the registration of tr
ansfer thereof; and if a service charge will be

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made for the registration of tra
nsfer or exchange of Securities of such series,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any Tranche thereof, the amou
nt or terms thereof;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (u) any exceptions to Section 11
5, or variation in the definition of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Day, with respect to th
e Securities of such series, or any Tranche
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) whether the Securities of su
ch series are Benefitted Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 707;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (w) any other terms of the Secur
ities of such series, or any Tranche
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, that the Company may el
ect to specify.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to Securities of a
series subject to a Periodic Offering,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the indenture supplemental heret
o or the Board Resolution which establishes such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series, or the Officer's Certifi
cate pursuant to such supplemental indenture or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board Resolution, as the case ma
y be, may provide general terms or parameters
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Securities of such series an
d provide either that the specific terms of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of such series, or an
y Tranche thereof, shall be specified in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company Order or that such terms
shall be determined by the Company or its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agents in accordance with proced
ures specified in a Company Order as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated in clause (b) of Se
ction 303.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise provided with r
espect to a series of Securities as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated in Section 301(b),
the aggregate principal amount of a series of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities may be increased and
additional Securities of such series may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued up to the maximum aggrega
te principal amount authorized with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series as increased.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 302. DENOMINATIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise provided as con
templated by Section 301 with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any series of Securities, or

any Tranche thereof, the Securities of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series shall be issuable in deno
minations of One Thousand Dollars ($1,000) and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any integral multiple thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 303. EXECUTION, AUTHENT
ICATION, DELIVERY AND DATING.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise provided as con
templated by Section 301 with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any series of Securities or a
ny Tranche thereof, the Securities shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed on behalf of the Compan
y by an Authorized Officer, and may have the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporate seal of the Company af
fixed thereto or reproduced thereon attested by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other Authorized Officer or
by the Secretary or an Assistant Secretary of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. The signature of an
y or all of these officers on the Securities may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be manual or facsimile.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities bearing the manual or
facsimile signatures of individuals
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql who were at the time of executio
n Authorized Officers or the Secretary or an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assistant Secretary of the Compa
ny shall bind the Company, notwithstanding that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such individuals or any of them
have ceased to hold such offices prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and delivery of s
uch Securities or did not hold such offices at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of such Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee shall authenticate a
nd deliver Securities of a series for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql original issue, at one time or f
rom time to time in accordance with the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Order referred to below, upon re
ceipt by the Trustee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the instrument or instrument
s establishing the form or forms and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of the Securities of such
series, as provided in Sections 201 and 301;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) a Company Order requesting t
he authentication and delivery of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and, to the extent th
at the terms of such Securities shall not have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been established in an indenture
supplemental hereto or in a Board Resolution,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in an Officer's Certificate p
ursuant to a supplemental indenture or Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolution, all as contemplated
by Section 301, either (i) establishing such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms or (ii) in the case of Sec
urities of a series subject to a Periodic
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offering, specifying procedures,
acceptable to the Trustee, by which such terms

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are to be established (which pro
cedures may provide, to the extent acceptable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee, for authentication
and delivery pursuant to oral or electronic
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instructions from the Company or
any agent or agents thereof, which oral
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instructions are to be promptly
confirmed electronically or in writing), in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either case in accordance with t
he instrument or instruments establishing the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of the Securities of such
series delivered pursuant to clause (a) above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If applicable, the Company Order
shall also designate the related series of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Bonds being delivered to
the Trustee in connection with the issuance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series of Securities;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) if prior to the Release Date
, any opinions, certificates,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents and instruments requir
ed by Article Sixteen;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Securities of such series, e
ach executed on behalf of the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by an Authorized Officer of the
Company;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) an Officer's Certificate (i)
which shall comply with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of Section 104 of t
his Indenture and (ii) which states that no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event of Default under this Inde
nture has occurred or is occurring;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) an Opinion of Counsel which
shall comply with the requirements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 104 of this Indenture an
d that states that:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the form or forms of such Se
curities have been duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized by the Company and ha
ve been established in conformity with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of this Indenture
;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the terms of such Securitie
s have been duly authorized by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company and have been establ
ished in conformity with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Indenture; an
d
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) when such Securities shall

have been authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered by the Trustee and iss
ued and delivered by the Company in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the manner and subject to any co
nditions specified in such Opinion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Counsel, such Securities will ha
ve been duly issued under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and will constitute va
lid and legally binding obligations of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, entitled to the ben
efits provided by this Indenture, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforceable in accordance with t
heir terms, subject, as to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement, to laws relating to
or affecting generally the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement of mortgagees' and o
ther creditors' rights, including,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation, bankruptcy,
insolvency, reorganization,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receivership, moratorium and oth
er laws affecting the rights and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedies of creditors and mortga
gees' generally and general principles
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of equity (regardless of whether
such enforceability is considered in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a proceeding in equity or at law
).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that, with re
spect to Securities of a series subject to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Periodic Offering, the Trustee s
hall be entitled to receive such Opinion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Counsel only once at or prior to
the time of the first authentication and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of Securities of such s
eries and that in lieu of the opinions described
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in clauses (ii) and (iii) above
such Opinion of Counsel may, alternatively,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql state, respectively,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) that, when the terms of such
Securities shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established pursuant to a Compan
y Order or Orders, or pursuant to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures as may be specified f
rom time to time by a Company Order or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Orders, all as contemplated by a
nd in accordance with the instrument or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments delivered pursuant t
o clause (a) above, such terms will have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been duly authorized by the Comp
any and will have been established in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conformity with the provisions o
f this Indenture; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (y) that, such Securities, when
(1) executed by the Company, (2)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered by t
he Trustee in accordance with this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, (3) issued and delive

red by the Company and (4) paid for, all as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated by and in accordanc
e with the aforesaid Company Order or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Orders, as the case may be, will
have been duly issued under this Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and will constitute valid and le
gally binding obligations of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to the benefits provide
d by the Indenture, and enforceable in
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with their terms, sub
ject, as to enforcement, to laws relating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to or affecting generally the en
forcement of mortgagees' and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql creditors' rights, including, wi
thout limitation, bankruptcy, insolvency,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reorganization, receivership, mo
ratorium and other laws affecting the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and remedies of creditors
and mortgagees' generally and general
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principles of equity (regardless
of whether such enforceability is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql considered in a proceeding in eq
uity or at law).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to Securities of a
series subject to a Periodic Offering,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee may conclusively rel
y, as to the authorization by the Company of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Securities, the forms an
d terms thereof and the legality, validity,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql binding effect and enforceabilit
y thereof, and compliance of the authentication
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and delivery thereof with the te
rms and conditions of this Indenture, upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Opinion of Counsel and other doc
uments delivered pursuant to Sections 201 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 301 and this Section, as applica
ble, at or prior to the time of the first
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication of Securities of
such series, unless and until such opinion or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other documents have been supers
eded or revoked or expire by their terms. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the authenticati
on and delivery of Securities of a series,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a Periodic Offering,
the Trustee shall be entitled to assume that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company's instructions to au
thenticate and deliver such Securities do not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql violate any applicable law or an
y applicable rule, regulation or order of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authority having ju
risdiction over the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the forms or terms of the Sec

urities of any series have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established by or pursuant to a
Board Resolution or an Officer's Certificate as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted by Sections 201 or 301
, the Trustee shall not be required to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticate such Securities if
the issuance of such Securities pursuant to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture will affect the Truste
e's own rights, duties or immunities under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and this Indenture or
otherwise in a manner which is not reasonably
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptable to the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise specified as
contemplated by Section 301 with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to any series of Securit
ies, or any Tranche thereof, each Security shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be dated the date of its authent
ication.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to any series of Securit
ies, or any Tranche thereof, no Security shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be entitled to any benefit under
this Indenture or be valid or obligatory for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any purpose unless there appears
on such Security a certificate of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication substantially in
the form provided for herein executed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee or its agent by manual s
ignature of an authorized officer thereof, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such certificate upon any Securi
ty shall be conclusive evidence, and the only
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evidence, that such Security has
been duly authenticated and delivered hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and is entitled to the benefits
of this Indenture. Notwithstanding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing, if any Security shall
have been authenticated and delivered hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company, or any Person ac
ting on its behalf, but shall never have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued and sold by the Company,
and the Company shall deliver such Security to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee for cancellation as
provided in Section 309 together with a written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement (which need not comply
with Section 104 and need not be accompanied by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Opinion of Counsel) stating t
hat such Security has never been issued and sold
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company, for all purposes
of this Indenture such Security shall be deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql never to have been authenticated
and delivered hereunder and shall never be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to the benefits hereof.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 304. TEMPORARY SECURITI
ES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pending the preparation of defin
itive Securities of any series, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche thereof, the Company may
execute, and upon Company Order the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall authenticate and deliver,
temporary Securities which are printed,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lithographed, typewritten, mimeo
graphed or otherwise produced, in any authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql denomination, substantially of t
he tenor of the definitive Securities in lieu of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which they are issued, with such
appropriate insertions, omissions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substitutions and other variatio
ns as any officer executing such Securities may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determine, as evidenced by such
officer's execution of such Securities;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that temporar
y Securities need not recite specific
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption, sinking fund, conver
sion or exchange provisions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise specified as co
ntemplated by Section 301 with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Securities of any series,
or any Tranche thereof, after the preparation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of definitive Securities of such
series or Tranche, the temporary Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series or Tranche shall be
exchangeable, without charge to the Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, for definitive Securiti
es of such series or Tranche upon surrender of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such temporary Securities at the
office or agency of the Company maintained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 702 in a Pla
ce of Payment for such Securities. Upon such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrender of temporary Securitie
s for such exchange, the Company shall, except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as aforesaid, execute and the Tr
ustee shall authenticate and deliver in exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor definitive Securities o
f the same series and Tranche of authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql denominations and of like tenor
and aggregate principal amount.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Until exchanged in full as herei
nabove provided, temporary Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall in all respects be entitle
d to the same benefits under this Indenture as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql definitive Securities of the sam
e series and Tranche and of like tenor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered here
under.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 305. REGISTRATION, REGI
STRATION OF TRANSFER AND EXCHANGE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall cause to be ke
pt in each office designated pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 702, with respect to
the Securities of each series, a register (all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registers kept in accordance wit
h this Section being collectively referred to as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the "Security Register") in whic
h, subject to such reasonable regulations as it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may prescribe, the Company shall
provide for the registration of Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series, or any Tranche ther
eof, and the registration of transfer thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall designate one
Person to maintain the Security Register for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of each series on a c
onsolidated basis, and such Person is referred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to herein, with respect to such
series, as the "Security Registrar." Anything
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein to the contrary notwithst
anding, the Company may designate one or more of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its offices as an office in whic
h a register with respect to the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one or more series shall be main
tained, and the Company may designate itself the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar with respect
to one or more of such series. The Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Register shall be open for inspe
ction by the Trustee and the Company at all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable times.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the Securities of any
series, or any Tranche thereof, upon surrender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for registration of transfer of
any Security of such series or Tranche at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql office or agency of the Company
maintained pursuant to Section 702 in a Place of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment for such series or Tranc
he, the Company shall execute, and the Trustee
in the name of the designated transferee or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferees, one or more new Sec
urities of the same series and Tranche, of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized denominations and of
like tenor and aggregate principal amount.
series, or any Tranche thereof, any Security of
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series or Tranche may be ex
changed at the option of the Holder for one or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more new Securities of the same

series and Tranche, of authorized denominations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and of like tenor and aggregate
principal amount, upon surrender of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities to be exchanged at an
y such office or agency. Whenever any Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are so surrendered for exchange,
the Company shall execute, and the Trustee
the Securities, which the Holder making the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange is entitled to receive.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All Securities delivered upon an
y registration of transfer or exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Securities shall be valid obl
igations of the Company, evidencing the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation, and entitled to the
same benefits under this Indenture, as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities surrendered upon such
registration of transfer or exchange.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Every Security presented or surr
endered for registration of transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or for exchange shall (if so req
uired by the Company, the Trustee or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar) be duly endo
rsed or shall be accompanied by a written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument of transfer in form s
atisfactory to the Company, the Trustee or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar, as the case
may be, duly executed by the Holder thereof or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his attorney duly authorized in
writing.
ntemplated by Section 301, with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to Securities of any ser
ies, or any Tranche thereof, no service charge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be made for any registrati
on of transfer or exchange of Securities, but
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company may require payment
of a sum sufficient to cover any tax or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental charge that may be
imposed in connection with any registration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer or exchange of Securiti
es, other than exchanges pursuant to Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 304, 506 or 1306 not involving a
ny transfer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall not be require
d to execute or to provide for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration of transfer of or t
he exchange of (a) Securities of any series, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Tranche thereof, during a pe
riod of 15 days immediately preceding the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice is to be given identifyin
g the serial numbers of the Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series or Tranche called for red
emption or (b) any Security so selected for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption in whole or in part,
except the unredeemed portion of any Security

ED, LOST AND STOLEN SECURITIES.
rendered to the Trustee, the Company
all authenticate and deliver in exchange
ame series and Tranche, and of like tenor and
er not contemporaneously outstanding.
he Company and the Trustee (a)
f the ownership of and the destruction, loss or
ch security or indemnity as may be reasonably
them and any agent of any of them harmless,
o the Company or the Trustee that such Security
purchaser, the Company shall execute and the
eliver, in lieu of any such destroyed, lost or
of the same series and Tranche, and of like
ing a number not contemporaneously outstanding.
n case any such mutilated, destroyed,
me or is about to become due and payable, the
nstead of issuing a new Security, pay such
urity under this Section, the Company
sufficient to cover any tax or other
imposed in relation thereto and any other
\page
he fees and expenses of the Trustee) in
issued pursuant to this Section in
being redeemed in part.

SECTION 306. MUTILATED, DESTROY
If any mutilated Security is sur
shall execute and the Trustee sh
therefor a new Security of the s
principal amount, bearing a numb
If there shall be delivered to t
evidence to their satisfaction o
theft of any Security and (b) su
required by them to save each of
then, in the absence of notice t
has been acquired by a bona fide
Trustee shall authenticate and d
stolen Security, a new Security
tenor and principal amount, bear
Notwithstanding the foregoing, i
lost or stolen Security has beco
Company in its discretion may, i
Security.
Upon the issuance of any new Sec
may require the payment of a sum
governmental charge that may be
37
reasonable expenses (including t

connection therewith.
Every new Security of any series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lieu of any destroyed, lost or s

tolen Security shall constitute an original
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional contractual obligatio
n of the Company, whether or not the destroyed,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lost or stolen Security shall be
at any time enforceable by anyone other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Holder of such new Security,
and any such new Security shall be entitled to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all the benefits of this Indentu
re equally and proportionately with any and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Securities of such series
duly issued hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The provisions of this Section a
re exclusive and shall preclude (to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent lawful) all other rig
hts and remedies with respect to the replacement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or payment of mutilated, destroy
ed, lost or stolen Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 307. PAYMENT OF INTERES
T; INTEREST RIGHTS PRESERVED.
ntemplated by Section 301 with
series, or any Tranche thereof, interest on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security which is payable, and i
s punctually paid or duly provided for, on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date shall be p
aid to the Person in whose name that Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (or one or more Predecessor Secu
rities) is registered at the close of business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Regular Record Date for s
uch interest.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any interest on any Security of
any series which is payable, but is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not punctually paid or duly prov
ided for, on any Interest Payment Date (herein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql called "Defaulted Interest") sha
ll forthwith cease to be payable to the Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the related Regular Record Da
te by virtue of having been such Holder, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Defaulted Interest may be p
aid by the Company, at its election, as provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in clause (a) or (b) below:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Company may elect to mak
e payment of any Defaulted Interest to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Persons in whose names the S
ecurities of such series (or their respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Predecessor Securities) are regi
stered at the close of business on a date (a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Special Record Date") for the p
ayment of such Defaulted Interest, which shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be fixed in the following manner
. The Company shall notify the Trustee in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing of the amount of Default
ed Interest proposed to be paid on each Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such series and the date of t
he proposed payment, and at the same time the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall deposit with the T
rustee an amount of money equal to the aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount proposed to be paid in re
spect of such Defaulted Interest or shall make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangements satisfactory to the
Trustee for such deposit prior to the date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the proposed payment, such money
when deposited to be held in trust for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of the Persons entitled
to such Defaulted Interest as in this clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided. Thereupon the Trustee
shall fix a Special Record Date for the payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Defaulted Interest which
shall be not more than 15 days and not less
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than 10 days prior to the date o
f the proposed payment and not less than 10 days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the receipt by the Trustee
of the notice of the proposed payment. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall promptly notify th
e Company of such Special Record Date and, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the name and at the expense of t
he Company shall promptly cause notice of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed payment of such Default
ed Interest and the Special Record Date therefor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be mailed, first-class postag
e prepaid, to each Holder of Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series at the address of such Ho
lder as it appears in the Security Register, not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than 10 days prior to such
Special Record Date. Notice of the proposed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of such Defaulted Intere
st and the Special Record Date therefor having
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been so mailed, such Defaulted I
nterest shall be paid to the Persons in whose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql names the Securities of such ser
ies (or their respective Predecessor Securities)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are registered at the close of b
usiness on such Special Record Date.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Company may make payment
of any Defaulted Interest on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series in any
other lawful manner not inconsistent with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of any securities e
xchange on which such Securities may be listed,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and upon such notice as may be r
equired by such exchange, if, after notice given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company to the Trustee of
the proposed payment pursuant to this clause,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such manner of payment shall be
deemed practicable by the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the foregoing provisi
ons of this Section and Section 305,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Security delivered under th

is Indenture upon registration of transfer of or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in exchange for or in lieu of an
y other Security shall carry the rights to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest accrued and unpaid, and
to accrue, which were carried by such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 308. PERSONS DEEMED OWN
ERS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prior to due presentment of a Se
curity for registration of transfer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, the Trustee and any
agent of the Company or the Trustee may treat
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Person in whose name such Se
curity is registered as the absolute owner of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Security for the purpose of
receiving payment of principal of and premium,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, and (subject to Sections
305 and 307) interest, if any, on such Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and for all other purposes whats
oever, whether or not such Security be overdue,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and none of the Company, the Tru
stee or any agent of the Company or the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be affected by notice to t
he contrary.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 309. CANCELLATION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All Securities surrendered for p
ayment, redemption, registration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer or exchange or for cred
it against any sinking fund payment shall, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrendered to any Person other
than the Security Registrar, be delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar and, if not t
heretofore canceled, shall be promptly canceled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Security Registrar. The C
ompany may at any time deliver to the Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrar for cancellation any S
ecurities previously authenticated and delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder which the Company may
have acquired in any manner whatsoever or which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall not have issue
d and sold, and all Securities so delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be promptly canceled by th
e Security Registrar. No Securities shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated in lieu of or in e
xchange for any Securities canceled as provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in this Section, except as expre
ssly permitted by this Indenture. All canceled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities held by the Security
Registrar shall be disposed of in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the customary practices of
the Security Registrar at the time in effect,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Security Registrar shall
not be required to destroy any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates. The Security Regis
trar shall promptly deliver a certificate of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition to the Trustee and t

he Company unless, by a Company Order, similarly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered, the Company shall dir
ect that canceled Securities be returned to it.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Security Registrar shall pro
mptly deliver evidence of any cancellation of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security in accordance with this
Section 309 to the Trustee and the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 310. COMPUTATION OF INT
EREST.
contemplated by Section 301 for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series, or Tra
nche thereof, interest on the Securities of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series shall be computed on the
basis of a three hundred sixty (360) day year
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consisting of twelve (12) thirty
(30) day months, and with respect to any period
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than a full month, on the b
asis of the actual number of days elapsed during
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such period. For example, the in
terest for a period running from the 15th day of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one month to the 15th day of the
next month would be calculated on the basis of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one 30-day month.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 311. PAYMENT TO BE IN P
ROPER CURRENCY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the case of any Security deno
minated in any currency other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dollars or in a composite curren
cy (the "Required Currency"), except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise specified with respect
to such Security as contemplated by Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 301, the obligation of the Compa
ny to make any payment of the principal thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the premium or interest there
on, shall not be discharged or satisfied by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tender by the Company, or recove
ry by the Trustee, in any currency other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Required Currency, except to
the extent that such tender or recovery shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result in the Trustee timely hol
ding the full amount of the Required Currency
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then due and payable. If any suc
h tender or recovery is in a currency other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Required Currency, the Trust
ee may take such actions as it considers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate to exchange such cur
rency for the Required Currency. The costs and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql risks of any such exchange, incl
uding without limitation the risks of delay and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange rate fluctuation, shall

be borne by the Company, the Company shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain fully liable for any shor
tfall or delinquency in the full amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Required Currency then due and p
ayable, and in no circumstances shall the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee be liable therefor excep
t in the case of its negligence or willful
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql misconduct.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 312. EXTENSION OF INTER
EST PAYMENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall have the right
at any time, to extend interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment periods on all the Secur
ities of any series hereunder, if so specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as contemplated by Section 301 w
ith respect to such Securities and upon such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms as may be specified as con
templated by Section 301 with respect to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 313. CUSIP NUMBERS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company in issuing the Secur
ities may use "CUSIP" or other similar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql numbers (if then generally in us
e), and, if so, the Company, the Trustee or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar may use "CUSI
P" or such other numbers in notices or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption as a convenience to H
olders; provided that any such notice may state
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that no representation is made a
s to the correctness of such numbers either as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql printed on the Securities or as
contained in any notice of a redemption and that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reliance may be placed only the
other identification numbers printed on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, in which case none o
f the Company or, as the case may be, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee or the Security Registra
r, or any agent of any of them, shall have any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability in respect of any CUSI
P number used on any such notice, and any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption shall not be affected
by any defect in or omission of such numbers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES OF THE FIRST AND SECO
ND SERIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There are hereby created two ser
ies of Securities (herein sometimes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to as "Securities of th
e First Series" and "Securities of the Second
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Series," respectively). The form
, designation and terms of the Securities of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql First Series and the Securities
of the Second Series shall be established in a

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indenture or a Boar
d Resolution, and/or in an Officer's Certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a supplemental inden
ture or a Board Resolution in accordance with
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REDEMPTION OF SECURITIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 501. APPLICABILITY OF A
RTICLE.
Tranche thereof, which are redeemable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before their Stated Maturity sha
ll be redeemable in accordance with their terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (except as otherwise specifi
ed as contemplated by Section 301 for Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such series or Tranche) in ac
cordance with this Article.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 502. ELECTION TO REDEEM
; NOTICE TO TRUSTEE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The election of the Company to r
edeem any Securities shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evidenced by a Board Resolution
or an Officer's Certificate. The Company shall,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at least 40 days prior to the Re
demption Date fixed by the Company (unless a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shorter notice shall be satisfac
tory to the Trustee), notify the Trustee in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing of such Redemption Date
and of the principal amount of such Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be redeemed. In the case of a
ny redemption of Securities (a) prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration of any restriction on
such redemption provided in the terms of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities or elsewhere in this
Indenture or (b) pursuant to an election of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company which is subject to a co
ndition specified in the terms of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, the Company shall fu
rnish the Trustee with an Officer's Certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evidencing compliance with such
restriction or condition.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 503. SELECTION OF SECUR
ITIES TO BE REDEEMED.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If less than all the Securities
of any series, or any Tranche thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are to be redeemed, the particul
ar Securities to be redeemed shall be selected

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Trustee from the Outstand
ing Securities of such series or Tranche not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously called for redemption
, by such method as shall be provided for such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular series or Tranche, or
in the absence of any such provision, by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql method of random selection as th
e Trustee shall deem fair and appropriate and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which may, in any case, provide
for the selection for redemption of portions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (equal to any authorized denomin
ation for Securities of such series or Tranche)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the principal amount of Secur
ities of such series or Tranche of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql denomination larger than the min
imum authorized denomination for Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series or Tranche; provided
, however, that if, as indicated in an Officer's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate, the Company shall h
ave offered to purchase all or any principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the Securities then Ou
tstanding of any series, or any Tranche thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and less than all of such Securi
ties as to which such offer was made shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been tendered to the Company for
such purchase, the Trustee, if so directed by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company Order, shall select for
redemption all or any principal amount of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities which have not been s
o tendered.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee shall promptly notif
y the Company and the Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrar in writing of the Secu
rities selected for redemption and, in the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any Securities selected to be
redeemed in part, the principal amount thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be redeemed.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For all purposes of this Indentu
re, unless the context otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires, all provisions relatin
g to the redemption of Securities shall relate,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the case of any Securities re
deemed or to be redeemed only in part, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of the principal amount
of such Securities which has been or is to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 504. NOTICE OF REDEMPTI
ON.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series, notice

of redemption shall be given in the manner
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Section 108 to the H
olders of the Securities to be redeemed not less
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than 30 days prior to the Redemp
tion Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series, all no
tices of redemption shall state:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the Redemption Date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the Redemption Price (if kno
wn),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) if less than all the Securit
ies of any series or Tranche are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be redeemed, the identificati
on of the particular Securities to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed and the portion of the
principal amount of any Security to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed in part,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) that on the Redemption Date
the Redemption Price, together
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with accrued interest, if any, t
o the Redemption Date, will become due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and payable upon each such Secur
ity to be redeemed and, if applicable,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that interest thereon will cease
to accrue on and after said date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) the place or places where su
ch Securities are to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrendered for payment of the R
edemption Price and accrued interest,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, unless it shall have bee
n specified as contemplated by Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 301 with respect to such Securit
ies that such surrender shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) that the redemption is for a
sinking or other fund, if such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is the case,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) the CUSIP or ISIN numbers, i
f any, assigned to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities; provided, however, t
hat such notice may state that no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representation is made as to the
correctness of CUSIP or ISIN numbers,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in which case none of the Compan
y, the Trustee or any agent of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or the Trustee shall hav
e any liability in respect of the use
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any CUSIP or ISIN number or n
umbers on such notices, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption of such Securities sh

all not be affected by any defect in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or omission of such numbers, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) such other matters as the Co
mpany shall deem desirable or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise specified with
respect to any Securities in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with Section 301, wit
h respect to any notice of redemption of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities at the election of th
e Company, unless, upon the giving of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice, such Securities shall be
deemed to have been paid in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 801, such notice may sta
te that such redemption shall be conditional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the receipt by the Paying A
gent or Agents for such Securities, on or prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the date fixed for such redem
ption, of money sufficient to pay the principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of and premium, if any, and inte
rest, if any, on such Securities and that if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such money shall not have been s
o received such notice shall be of no force or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect and the Company shall not
be required to redeem such Securities. In the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event that such notice of redemp
tion contains such a condition and such money is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not so received, the redemption
shall not be made and within a reasonable time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter notice shall be given
, in the manner in which the notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption was given, that such
money was not so received and such redemption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was not required to be made, and
the Paying Agent or Agents for the Securities
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise to have been redeemed
shall promptly return to the Holders thereof any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Securities which had bee
n surrendered for payment upon such redemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notice of redemption of Securiti
es to be redeemed at the election of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, and any notice of n
on-satisfaction of a condition for redemption as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aforesaid, shall be given by the
Company or, at the Company's request, by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar in the name a
nd at the expense of the Company. Notice of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mandatory redemption of Securiti
es shall be given by the Security Registrar in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the name and at the expense of t
he Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 505. SECURITIES PAYABLE
ON REDEMPTION DATE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notice of redemption having been
given as aforesaid, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions, if any, set forth in
such notice having been satisfied, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities or portions thereof s
o to be redeemed shall, on the Redemption Date,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become due and payable at the Re
demption Price therein specified, and from and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after such date (unless, in the
case of an unconditional notice of redemption,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall default in the
payment of the Redemption Price and accrued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest, if any) such Securitie
s or portions thereof, if interest-bearing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall cease to bear interest. Up
on surrender of any such Security for redemption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with such notice,
such Security or portion thereof shall be paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company at the Redemption
Price, together with accrued interest, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Redemption Date; provided
, however, that no such surrender shall be a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition to such payment if so
specified as contemplated by Section 301 with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to such Security; and pr
ovided, further, that except as otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified as contemplated by Sec
tion 301 with respect to such Security, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installment of interest on any S
ecurity the Stated Maturity of which installment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is on or prior to the Redemption
Date shall be payable to the Holder of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security, or one or more Predece
ssor Securities, registered as such at the close
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of business on the related Regul
ar Record Date according to the terms of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security and subject to the prov
isions of Sections 305 and 307.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 506. SECURITIES REDEEME
D IN PART.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the surrender of any Securi
ty which is to be redeemed only in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part at a Place of Payment there
for (with, if the Company or the Trustee so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires, due endorsement by, or
a written instrument of transfer in form
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory to the Company and
the Trustee duly executed by, the Holder thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or his attorney duly authorized
in writing), the Company shall execute, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall authenticate and d
eliver to the Holder of such Security, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service charge, a new Security o
r Securities of the same series and Tranche, of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any authorized denomination requ
ested by such Holder and of like tenor and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount equal
to and in exchange for the unredeemed portion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the principal of the Security
so surrendered.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SINKING FUNDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 601. APPLICABILITY OF A
RTICLE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The provisions of this Article s
hall be applicable to any sinking fund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the retirement of the Securi
ties of any series, or any Tranche thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as otherwise specified as
contemplated by Section 301 for Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series or Tranche.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The minimum amount of any sinkin
g fund payment provided for by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of Securities of any serie
s, or any Tranche thereof, is herein referred to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a "mandatory sinking fund pay
ment", and any payment in excess of such minimum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount provided for by the terms
of Securities of any series, or any Tranche
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, is herein referred to a
s an "optional sinking fund payment". If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided for by the terms of Sec
urities of any series, or any Tranche thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the cash amount of any sinking f
und payment may be subject to reduction as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Section 602. Each si
nking fund payment shall be applied to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption of Securities of the
series or Tranche in respect of which it was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made as provided for by the term
s of such Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 602. SATISFACTION OF SI
NKING FUND PAYMENTS WITH SECURITIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company (a) may deliver to t
he Trustee Outstanding Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (other than any previously calle
d for redemption) of a series or Tranche in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of which a mandatory sin
king fund payment is to be made and (b) may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql apply as a credit Securities of
such series or Tranche which have been redeemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either at the election of the Co

mpany pursuant to the terms of such Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or through the application of pe
rmitted optional sinking fund payments pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the terms of such Securities,
in each case in satisfaction of all or any part
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such mandatory sinking fund p
ayment with respect to the Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series; provided, however, that
no Securities shall be applied in satisfaction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a mandatory sinking fund paym
ent if such Securities shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously so applied. Securitie
s so applied shall be received and credited for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such purpose by the Trustee at t
he Redemption Price specified in such Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for redemption through operation
of the sinking fund and the amount of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mandatory sinking fund payment s
hall be reduced accordingly.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 603. REDEMPTION OF SECU
RITIES FOR SINKING FUND.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Not less than 40 days prior to e
ach sinking fund payment date for the
Tranche thereof, the Company shall deliver to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee an Officer's Certifi
cate specifying:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the amount of the next succe
eding mandatory sinking fund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment for such series or Tranc
he;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the amount, if any, of the o
ptional sinking fund payment to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made together with such manda
tory sinking fund payment;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) the aggregate sinking fund p
ayment; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) the portion, if any, of such
aggregate sinking fund payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is to be satisfied by the
payment of cash;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) the portion, if any, of such
aggregate sinking fund payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is to be satisfied by deli
vering and crediting Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series or Tranche pursuant
to Section 602 and stating the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for such credit and that such Se
curities have not previously been so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credited, and the Company shall
also deliver to the Trustee any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities to be so delivered.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Company shall not deliver
such Officer's Certificate and, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent applicable, all such
Securities, the next succeeding sinking fund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment for such series or Tranc
he shall be made entirely in cash in the amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the mandatory sinking fund pa
yment. Not less than 30 days before each such
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sinking fund payment date the Tr
ustee shall select the Securities to be redeemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon such sinking fund payment d
ate in the manner specified in Section 503 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause notice of the redemption t
hereof to be given in the name of and at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense of the Company in the ma
nner provided in Section 504. Such notice having
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been duly given, the redemption
of such Securities shall be made upon the terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and in the manner stated in Sect
ions 505 and 506.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTATIONS AND COVENANTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 701. PAYMENT OF SECURIT
IES; LAWFUL POSSESSION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Company shall pay the pr
incipal of and premium, if any, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest, if any, on the Securit
ies of each series in accordance with the terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Securities and this Inde
nture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) At the Execution Date, the C
ompany is lawfully possessed of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property and has suffi
cient right and authority to mortgage and pledge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Mortgaged Property, as provi
ded in and by this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 702. MAINTENANCE OF OFF
ICE OR AGENCY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall maintain in ea
ch Place of Payment for the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each series, or any Tranche t
hereof, an office or agency where payment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities shall be made, w
here the registration of transfer or exchange of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities may be effected
and where notices and demands to or upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company in respect of such Secur

ities and this Indenture may be served. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall give prompt writte
n notice to the Trustee of the location, and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change in the location, of each
such office or agency and prompt notice to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of any such change in th
e manner specified in Section 108. If at any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time the Company shall fail to m
aintain any such required office or agency or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall fail to furnish the Truste
e with the address thereof, then payment of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities shall be made, regist
ration of transfer or exchange thereof may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effected and notices and demands
in respect of such Securities and this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture may be served at the C
orporate Trust Office of the Trustee, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company hereby appoints the Trus
tee as its agent for all such purposes in any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such event.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company may also from time t
o time designate one or more other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offices or agencies with respect
to the Securities of one or more series, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche thereof, for any or all
of the foregoing purposes and may from time to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time rescind such designations;
provided, however, that, unless otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified as contemplated by Sec
tion 301 with respect to the Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series or Tranche, no such desig
nation or rescission shall in any manner relieve
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company of its obligation to
maintain an office or agency for such purposes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in each Place of Payment for suc
h Securities in accordance with the requirements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth above. The Company sha
ll give prompt written notice to the Trustee,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and prompt notice to the Holders
in the manner specified in Section 108, of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such designation or rescission a
nd of any change in the location of any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other office or agency.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Anything herein to the contrary
notwithstanding, any office or agency
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by this Section may be
maintained at an office of the Company or an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliate of the Company, in whi
ch event the Company or such Affiliate shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform all functions to be perf
ormed at such office or agency.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 703. MONEY FOR SECURITI

ES PAYMENTS TO BE HELD IN TRUST.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Company shall at any time
act as its own Paying Agent with
series, or any Tranche thereof, it shall, on or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before each due date of the prin
cipal of and premium, if any, and interest, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, on any of such Securities,
segregate and hold in trust for the benefit of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Persons entitled thereto a s
um sufficient to pay the principal and premium
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or interest so becoming due unti
l such sums shall be paid to such Persons or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise disposed of as herein
provided. The Company shall promptly notify the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee of any failure by the Co
mpany (or any other obligor on such Securities)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make any payment of principal
of or premium, if any, or interest, if any, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Whenever the Company shall have
one or more Paying Agents for the
Tranche thereof, it shall, on or before each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due date of the principal of and
premium, if any, and interest, if any, on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, deposit with such Pa
ying Agents sums sufficient (without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duplication) to pay the principa
l and premium or interest so becoming due, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sums to be held in trust for the
benefit of the Persons entitled to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal, premium or interest,
and (unless such Paying Agent is the Trustee)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall promptly notif
y the Trustee of any failure by it so to act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall cause each Pay
ing Agent for the Securities of any
other than the Company or the Trustee, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execute and deliver to the Trust
ee an instrument in which such Paying Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall agree with the Trustee, su
bject to the provisions of this Section, that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Paying Agent shall:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) hold all sums held by it for
the payment of the principal of and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premium, if any, or interest, if
any, on such Securities in trust for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of the Persons entitled
thereto until such sums shall be paid to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Persons or otherwise disposed of
as herein provided;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) give the Trustee notice of a
ny failure by the Company (or any

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other obligor upon such Securiti
es) to make any payment of principal of or
any, on such Securities; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) at any time during the conti
nuance of any such failure, upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written request of the Trustee,
forthwith pay to the Trustee all sums so held in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trust by such Paying Agent and f
urnish to the Trustee such information as it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possesses regarding the names an
d addresses of the Persons entitled to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sums.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company may at any time pay,
or by Company Order direct any Paying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent to pay, to the Trustee all
sums held in trust by the Company or such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paying Agent, such sums to be he
ld by the Trustee upon the same trusts as those
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon which such sums were held b
y the Company or such Paying Agent and, if so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stated in a Company Order delive
red to the Trustee, in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of Article Seven; and
, upon such payment by any Paying Agent to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, such Paying Agent shall
be released from all further liability with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to such money.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any money deposited with the Tru
stee or any Paying Agent, or then held
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company, in trust for the
payment of the principal of and premium, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, or interest, if any, on any
Security and remaining unclaimed for two years
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after such principal and premium
, if any, or interest, if any, has become due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and payable shall to the extent
permitted by law be paid to the Company on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company Request, or, if then hel
d by the Company, shall be discharged from such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trust; and, upon such payment or
discharge, the Holder of such Security shall,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as an unsecured general creditor
and not as the Holder of an Outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security, look only to the Compa
ny for payment of the amount so due and payable
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and remaining unpaid unless the
applicable law provides otherwise, and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability of the Trustee or such
Paying Agent with respect to such trust money,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all liability of the Company

as trustee thereof, shall thereupon cease;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that the Trus
tee or such Paying Agent, before being required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make any such payment to the
Company, may at the expense of the Company cause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be mailed, on one occasion on
ly, notice to such Holder that such money
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remains unclaimed and that, afte
r a date specified therein, which shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than thirty (30) days from
the date of such mailing, any unclaimed balance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such money then remaining wil
l be paid to the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 704. CORPORATE EXISTENC
E.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the rights of the Com
pany under Article Twelve, the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall do or cause to be done all
things necessary to preserve and keep in full
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql force and effect its legal exist
ence as a corporation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 705. ANNUAL OFFICER'S C
ERTIFICATE AS TO COMPLIANCE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Not later than June 1 in each ye
ar, commencing June 1, 2002, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall deliver to the Tru
stee an Officer's Certificate which need not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with the requirements of
Section 104, executed by the principal executive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer, the principal financial
officer or the principal accounting officer of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, as to such officer'
s knowledge of the Company's compliance with all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions and covenants under t
his Indenture, such compliance to be determined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without regard to any period of
grace or requirement of notice under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, and making any other
statements as may be required by the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 706. WAIVER OF CERTAIN
COVENANTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company may omit in any part
icular instance to comply with any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term, provision or condition set
forth in (a) Section 602 or any additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenant or restriction specifie
d with respect to the Securities of any series,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any Tranche thereof, as conte
mplated by Section 301, if before the time for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such compliance the Holders of a
majority in aggregate principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding Securities of all se
ries and Tranches with respect to which

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with Section 602 or s
uch additional covenant or restriction is to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omitted, considered as one class
, shall, by Act of such Holders, either waive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such compliance in such instance
or generally waive compliance with such term,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision or condition and (b) S
ection 604, 605 or Article Eleven if before the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time for such compliance the Hol
ders of a majority in principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Outstanding under thi
s Indenture shall, by Act of such Holders,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either waive such compliance in
such instance or generally waive compliance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such term, provision or conditio
n; but, in the case of (a) or (b), no such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver shall extend to or affect
such term, provision or condition except to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent so expressly waived, and,
until such waiver shall become effective, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of the Company and t
he duties of the Trustee in respect of any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term, provision or condition sha
ll remain in full force and effect.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 707. LIMITATION ON SECU
RED DEBT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Except as otherwise specifie
d as contemplated by Section 301 for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series, so lon
g as any Securities of any series are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding, the Company shall n
ot, from and after the Release Date, issue any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Debt (other than Permitt
ed Secured Debt), without the consent of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of a majority in princip
al amount of all the Outstanding Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all series and Tranches with res
pect to which this covenant is specified as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated by Section 301 (the
"Benefitted Securities"), considered as one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql class, except as expressly conte
mplated in subsections (b) and (c) of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The provisions of subsection
(a) shall not prohibit the creation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or existence of any Secured Debt
if either:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the Company shall make effec
tive provision whereby the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Benefitted Securities shall be s
ecured at least equally and ratably

o the Trustee bonds, notes or
secured by the Lien which secures such
"Secured Obligations") (i) in an
to the aggregate principal amount of
i) maturing (or being subject to
ted Maturities of such series and
any mandatory redemption provisions
tions outstanding under such Lien and
ons contained therein pursuant to
emption provisions correlative to the
atory redemption (pursuant to a
e Securities of such series or for the
of the Holder, as well as a provision
acceleration of the maturity of all
eries following an Event of Default
rescinded upon the rescission of such
y understood that such Secured
t, bear interest, (y) may, but need
redemption thereof at the option of
to be made at a redemption price or
al amount thereof and (z) shall be
fit of the Holders of all Securities
Outstanding subject to such terms and
to the Company, transfer
n of payments of principal and
all be set forth in an indenture
providing for the delivery to the
ons.
with such Secured Debt; or

(ii) the Company shall deliver t
other evidences of indebtedness
Secured Debt (hereinafter called
aggregate principal amount equal
each series then Outstanding, (i
mandatory redemption) on the Sta
(iii) containing, in addition to
applicable to all Secured Obliga
any mandatory redemption provisi
clause (ii) above, mandatory red
provisions, if any, for the mand
sinking fund or otherwise) of th
redemption thereof at the option
for mandatory redemption upon an
Outstanding Securities of such s
(such mandatory redemption to be
acceleration); it being expressl
Obligations (x) may, but need no
not, contain provisions for the
the issuer, any such redemption
prices not less than the princip
held by the Trustee for the bene
of such series from time to time
conditions relating to surrender
restrictions, voting, applicatio
interest and other matters as sh
supplemental hereto specifically
Trustee of such Secured Obligati
ither of the alternatives described in
l deliver to the Trustee:
this Indenture (i) together with
editor arrangements, whereby this
e Lien referred to in subsection (b)
er indebtedness secured by such Lien
ry to the Trustee of Secured
) stating that, to the knowledge
efault has occurred and is continuing
d is continuing which entitles the
accelerate the maturity of the
der and (y) stating the aggregate
issuable, and then proposed to be
h Lien;
if the Outstanding Securities
ecured by such Lien, to the effect
ding are entitled to the benefit of
th all other indebtedness outstanding
Secured Obligations are to be
effect that such Secured Obligations
Lien and constitute valid
\page
efit of such Lien equally and ratably
outstanding secured by such Lien.
, except as otherwise expressly
therwise requires:
(c) If the Company shall elect e

subsection (b), the Company shal
(i) an indenture supplemental to
evidence of appropriate inter-cr
Indenture shall be secured by th
equally and ratably with all oth
or (ii) providing for the delive
Obligations;
(ii) an Officer's Certificate (i
of the signer, (x) no Event of D
and (y) no event has occurred an
secured party under such Lien to
indebtedness outstanding thereun
principal amount of indebtedness
issued, under and secured by suc
(iii) an Opinion of Counsel (i)
under this Indenture are to be s
that all Securities then Outstan
such Lien equally and ratably wi
secured by such Lien or (ii) if
delivered to the Trustee, to the
have been duly issued under such
48
obligations, entitled to the ben
with all other indebtedness then
(d) For purposes of this Section
provided or unless the context o
Person, means (A) indebtedness of
videnced by a bond, debenture, note or
ement by which such Person is
money, (B) any guaranty by such
of another Person, and (C) any
the Company. "Debt" does not include,
ness of such person under any
sale agreement or any other agreement
deferred purchase price of property
ation (including obligations under
e agreements and any hedges or
), or other obligations of such Person
ss, (y) obligations of such Person
re not Capitalized Lease Liabilities,
edness, neither assumed nor guaranteed
ustomarily pays interest, existing
relating to real estate acquired by
smission line, transportation line,
y purposes.
ans, as of any particular time,
ess than one year from the
ce thereof and is not extendible
any refundings, refinancings
Secured Debt by or with similar
than one year from the date of
or replacement and is not
issuer;
(i) "DEBT", with respect to any

such Person for borrowed money e
other written instrument or agre
obligated to repay such borrowed
Person of any such indebtedness
Capitalized Lease Liabilities of
among other things, (w) indebted
installment sale or conditional
relating to indebtedness for the
or services, (x) any trade oblig
power or other commodity purchas
derivatives associated therewith
in the ordinary course of busine
under any lease agreement that a
or (z) any Liens securing indebt
by the Company nor on which it c
upon real estate or rights in or
the Company for substation, tran
distribution line or right of wa
(ii) "PERMITTED SECURED DEBT" me
any of the following:
(A) Secured Debt which matures l
date of the issuance or incurren
at the option of the issuer; and
and/or replacements of any such
Secured Debt which matures less
such refunding, refinancing and/
extendible at the option of the
(B) Secured Debt secured by Purc
hase Money Liens or any

pon property at the time of, or
days after, the acquisition
refundings, refinancings and/or
Debt; provided, however, that no
r Lien shall extend to or cover
r than (i) the property so
sions and additions to such
nts and substitutions of or for
ts thereof and (ii) with respect
roperty subsequently acquired by
ernmental obligations the
d in gross income for purpose of
to Section 103 of the Internal
(or any successor provision of
ng or refinancing, in whole or in
nstruction of property to be used
at the Lien which secures such
by applicable law or by the
\page
gations or is otherwise necessary
n such exclusion from gross
nancings and/or replacements of
similar Secured Debt;
lated to the construction or
iously owned by the Company or
ancing of a project involving the
other Liens existing or placed u

within one hundred eighty (180)
thereof by the Company, and any
replacements of any such Secured
such Purchase Money Lien or othe
any property of the Company othe
acquired and improvements, exten
property and renewals, replaceme
such property or any part or par
to Purchase Money Liens, other p
the Company;
(C) Secured Debt relating to gov
interest on which is not include
federal income taxation pursuant
Revenue Code of 1986, as amended
law), for the purpose of financi
part, costs of acquisition or co
by the Company, to the extent th
Secured Debt is required either
49
issuer of such governmental obli

in order to establish or maintai
income; and any refundings, refi
any such Secured Debt by or with
(D) Secured Debt (i) which is re
acquisition of property not prev
(ii) which is related to the fin
erty of the Company and (iii) in
ect of which has no recourse to
he Company other than the
with the proceeds of such
ced with the proceeds of such
such property or such project);
and/or replacements of any
Debt described in clause (iii)
Secured Debt described in
ecured Debt not otherwise so
an aggregate principal amount
of the Company's Net Tangible
of all the following items
e Company's unconsolidated
or indebtedness maturing more
determination, and (ii) common
umulated other comprehensive
preference stock, premium on
gs (however the foregoing may be
not otherwise deducted, the cost
al stock held in the Company's
shall be determined in
ed accounting principles and
of business in which the Company
d as of the date not more than 60
he event for which the
means the amount, if any,
development or expansion of prop

either case, the obligee in resp
the Company or any property of t
property constructed or acquired
transaction or the project finan
transaction (or the proceeds of
and any refundings, refinancings
Secured Debt by or with Secured
above; and
(E) in addition to the Permitted
clauses (A) through (D) above, S
permitted in this Section 707 in
not exceeding the greater of 10%
Assets or 10% of Capitalization.
"CAPITALIZATION" means the total
appearing on, or included in, th
balance sheet; (i) liabilities f
than 12 months from the date of
stock, common stock expense, acc
income or loss, preferred stock,
common stock and retained earnin
designated), less, to the extent
of shares of the Company's capit
treasury, if any. Capitalization
accordance with generally accept
practices applicable to the type
is engaged, and may be determine
days prior to the happening of t
determination is being made.
"CAPITALIZED LEASE LIABILITIES"
any's unconsolidated balance
electric transmission and
by the Company, which amount
e with generally accepted
ces applicable to the type of
engaged.
amount shown as total assets
balance sheet, less (i)
without limitation, such items
ames, patents, unamortized debt
egulatory assets carried as an
dated balance sheet, (ii)
on account of minority
hall be determined in accordance
ng principles and practices
ss in which the Company is
created, issued, incurred or
secured by a Lien upon any property
f the Company, real, personal or
\page
e and wherever located. For purposes
Lease Liabilities of the Company will
a Lien on the Company's property.
ISCHARGE OF SECURITIES.
shown as liabilities on the Comp

sheet for capitalized leases of
distribution property not owned
shall be determined in accordanc
accounting principles and practi
business in which the Company is
"NET TANGIBLE ASSETS" means the
on the Company's unconsolidated
intangible assets including, but
as goodwill, trademarks, trade n
discount and expense and other r
asset on the Company's unconsoli
appropriate adjustments, if any,
interests. Net Tangible Assets s
with generally accepted accounti
applicable to the type of busine
engaged.
(iii) "SECURED DEBT" means Debt
assumed by the Company which is
(other than Excepted Property) o
50
mixed, of whatever kind or natur

of this Section, any Capitalized
be deemed to be Debt secured by
ARTICLE EIGHT
SATISFACTION AND DISCHARGE
SECTION 801. SATISFACTION AND D
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any Security or Securities, or a
ny portion of the principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, shall be deemed to have
been paid and no longer Outstanding for all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of this Indenture, and
the entire indebtedness of the Company in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect thereof shall be deemed
to have been satisfied and discharged, if there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have been irrevocably depo
sited with the Trustee or any Paying Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (other than the Company), in tru
st:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) money in an amount which sha
ll be sufficient, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) in the case of a deposit mad
e prior to the Maturity of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities or portions thereof,
Eligible Obligations, which shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contain provisions permitting th
e redemption or other prepayment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof at the option of the iss
uer thereof, the principal of and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on which when due, with
out any regard to reinvestment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, will provide moneys whi
ch, together with the money, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposited with or held by the Tr
ustee or such Paying Agent, shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) a combination of (a) or (b)
which shall be sufficient,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to pay when due the principal of
and premium, if any, and interest, if any, due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to become due on such Securi
ties or portions thereof on or prior to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity; provided, however, tha
t in the case of the provision for payment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redemption of less than all the
Securities of any series or Tranche, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities or portions thereof s
hall have been selected by the Trustee as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided herein and, in the case
of a redemption, the notice requisite to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql validity of such redemption shal
l have been given or irrevocable authority shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been given by the Company t
o the Trustee to give such notice, under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangements satisfactory to the
Trustee; and provided, further, that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall have delivered to
the Trustee and such Paying Agent:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) if such deposit shall have b
een made prior to the Maturity of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, a Company Order stat
ing that the money and Eligible Obligations

s Section shall be held in trust, as
l have been deposited, an Opinion of
obligations constitute Eligible Obligations
rmitting the redemption or other prepayment
uer thereof, and a report of an independent
recognized standing, selected by the
other requirements set forth in clause (b)
d; and
een made prior to the Maturity of such
cate stating the Company's intention that,
\page
Certificate, its indebtedness in respect of
eof will have been satisfied and discharged
gible Obligations, or both, in
gether with the documents required by clauses
tee shall, upon receipt of a Company Request,
Security or Securities or portions thereof with
s made are deemed to have been paid for all
hat the entire indebtedness of the Company in
ed and discharged as contemplated in this
f the conditions set forth in the preceding
ied in respect of any Securities or portions
son, the Officer's Certificate specified in
elivered, such Securities or portions thereof
have been paid for all purposes of this
deposited in accordance with thi

provided in Section 803;
(y) if Eligible Obligations shal
Counsel to the effect that such
and do not contain provisions pe
thereof at the option of the iss
public accountant of nationally
Company, to the effect that the
and (c) above have been satisfie
(z) if such deposit shall have b
Securities, an Officer's Certifi
51
upon delivery of such Officer's

such Securities or portions ther
as contemplated in this Section.
Upon the deposit of money or Eli
accordance with this Section, to
(x), (y) and (z) above, the Trus
acknowledge in writing that the
respect to which such deposit wa
purposes of this Indenture and t
respect thereof has been satisfi
Section. In the event that all o
paragraph shall have been satisf
thereof except that, for any rea
clause (z) shall not have been d
shall nevertheless be deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, and the Holders of su

ch Securities or portions thereof shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nevertheless be no longer entitl
ed to the benefits provided by this Indenture or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any of the covenants of the C
ompany under Article Seven (except the covenants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in Sections 702 and 70
3) or any other covenants made in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities or portions ther
eof as contemplated by Section 301 or Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1301(b), but the indebtedness of
the Company in respect of such Securities or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portions thereof shall not be de
emed to have been satisfied and discharged prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Maturity for any other purpos
e and the Holders of such Securities or portions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof shall continue to be ent
itled to look to the Company for payment of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness represented thereby
; and, upon Company Request, the Trustee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledge in writing that such
Securities or portions thereof are deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been paid for all purposes
of this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If payment at Stated Maturity of
less than all of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any series, or any Tranche there
of, is to be provided for in the manner and with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the effect provided in this Sect
ion, the Trustee shall select such Securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or portions of principal amount
thereof, in the manner specified by Section 503
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for selection for redemption of
less than all the Securities of a series or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that Securities whi
ch shall be deemed to have been paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for purposes of this Indenture,
and, if such is the case, in respect of which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company's indebtedness shall
have been satisfied and discharged, all as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in this Section, do not
mature and are not to be redeemed within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sixty (60) day period commencing
with the date of the deposit of moneys or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eligible Obligations, as aforesa
id, the Company shall, as promptly as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practicable, give a notice, in t
he same manner as a notice of redemption with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to such Securities, to t
he Holders of such Securities to the effect that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such deposit has been made and t
he effect thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding that any Securit
ies shall be deemed to have been paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for purposes of this Indenture,
as aforesaid, the obligations of the Company and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee in respect of such S

ecurities under Sections 304, 305, 306, 504,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 702, 703, 1007 and 1015 and this
Article shall survive.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall pay, and shall
indemnify the Trustee or any Paying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent with which Eligible Obliga
tions shall have been deposited as provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section against, any tax, f
ee or other charge imposed on or assessed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against such Eligible Obligation
s or the principal or interest received in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of such Eligible Obligat
ions, including, but not limited to, any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tax payable by any entity deemed
, for tax purposes, to have been created as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result of such deposit.
notwithstanding, (a) if, at any time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after a Security would be deemed
to have been paid for purposes of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, and, if such is the c
ase, the Company's indebtedness in respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof would be deemed to have
been satisfied and discharged, pursuant to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section (without regard to the p
rovisions of this paragraph), the Trustee or any
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paying Agent, as the case may be
, (i) shall be required to return the money or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eligible Obligations, or combina
tion thereof, deposited with it as aforesaid to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company or its representativ
e under any applicable Federal or State
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy, insolvency or other
similar law, or (ii) is unable to apply any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql money in accordance with this Ar
ticle with respect to any Securities by reason
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any order or judgment of any
court or governmental authority enjoining,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restraining or otherwise prohibi
ting such application, such Security shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereupon be deemed retroactivel
y not to have been paid and any satisfaction and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharge of the Company's indeb
tedness in respect thereof shall retroactively
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deemed not to have been effec
ted, and such Security shall be deemed to remain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding and (b) any satisfac
tion and discharge of the Company's indebtedness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in respect of any Security shall
be subject to the provisions of the last
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph of Section 703.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 802. SATISFACTION AND D
ISCHARGE OF INDENTURE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Indenture shall upon Compan
y Request cease to be of further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect (except as hereinafter ex
pressly provided), and the Trustee, at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense of the Company, shall ex
ecute such instruments as the Company shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably request to evidence a
nd acknowledge the satisfaction and discharge of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture, when:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) no Securities remain Outstan
ding hereunder; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the Company has paid or caus
ed to be paid all other sums
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable hereunder by the Company
;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that if, in a
ccordance with the last paragraph of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 801, any Security, previ
ously deemed to have been paid for purposes of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture, shall be deemed
retroactively not to have been so paid, this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture shall thereupon be dee
med retroactively not to have been satisfied and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharged, as aforesaid, and to
remain in full force and effect, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall execute and delive
r such instruments as the Trustee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably request to evidence a
nd acknowledge the same.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the satisfaction
and discharge of this Indenture as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aforesaid, the obligations of th
e Company and the Trustee under Sections 304,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 305, 306, 504, 702, 703, 1007 an
d 1015 and this Article shall survive.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon satisfaction and discharge
of this Indenture as provided in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section, the Trustee shall assig
n, transfer and turn over to the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the lien provided by
Section 1007, any and all money, securities and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other property then held by the
Trustee for the benefit of the Holders of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities (other than money and
Eligible Obligations held by the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 803) and sha
ll execute and deliver to the Company such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments as, in the judgment
of the Company, shall be necessary, desirable or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate to effect or evidenc
e the satisfaction and discharge of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 803. APPLICATION OF TRU
ST MONEY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither the Eligible Obligations
nor the money deposited pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 801, nor the principal o
r interest payments on any such Eligible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations, shall be withdrawn
or used for any purpose other than, and shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held in trust for, the payment o
f the principal of and premium, if any, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest, if any, on the Securit
ies or portions of principal amount thereof in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of which such deposit wa
s made, all subject, however, to the provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 703; provided, howeve
r, that so long as there shall not have occurred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and be continuing an Event of De
fault, any cash received from such principal or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest payments on such Eligib
le Obligations, if not then needed for such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose, shall, to the extent pr
acticable and upon Company Request and delivery
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee of the documents
referred to in clause (y) in the first paragraph
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 801, be invested in E
ligible Obligations of the type described in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (b) in the first paragrap
h of Section 801 maturing at such times and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such amounts as shall be suffici
ent, together with any other moneys and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeds of any other Eligible O
bligations then held by the Trustee, to pay when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due the principal of and premium
, if any, and interest, if any, due and to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become due on such Securities or
portions thereof on and prior to the Maturity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, and interest earned fro
m such reinvestment shall be paid over to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company as received, free and cl
ear of any trust, lien or pledge under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture (except the lien provi
ded by Section 1007); and provided, further,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that, so long as there shall not
have occurred and be continuing an Event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default, any moneys held in acco
rdance with this Section on the Maturity of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities in excess of the
amount required to pay the principal of and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premium, if any, and interest, i
f any, then due on such Securities shall be paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql over to the Company free and cle
ar of any trust, lien or pledge under this

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture (except the lien provi
ded by Section 1007); and provided, further,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that if an Event of Default shal
l have occurred and be continuing, moneys to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid over to the Company pursuan
t to this Section shall be held until such Event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default shall have been waive
d or cured.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE NINE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EVENTS OF DEFAULT; REMEDIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 901. EVENTS OF DEFAULT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Event of Default", wherever use
d herein with respect to Securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql means any one of the following e
vents:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) failure to pay any interest
on any Security when it becomes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due and payable and continuance
of such default for a period of 30
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days; provided, however, that no
such default shall constitute an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Event of Default" if the Compan
y has made a valid extension of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest payment period with res
pect to the Securities of such series,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of which such Security is a part
, if so provided as contemplated by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 301; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) failure to pay the principal
of or premium, if any, on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security when it becomes due and
payable; provided, however, that no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such default shall constitute an
"Event of Default" if the Company has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made a valid extension of the Ma
turity of the Securities of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series, of which such Security i
s a part, if so provided as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated by Section 301; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) failure to perform or breach
of, any covenant or warranty of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company in this Indenture (o
ther than a covenant or warranty a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql default in the performance of wh
ich or breach of which is elsewhere in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section specifically addres
sed) and continuance of such default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or breach for a period of 90 day
s after there has been given, by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered or certified mail, to
the Company by the Trustee, or to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and the Trustee by the H
olders of at least 33% in aggregate

ing Securities, a written notice
h and requiring it to be remedied and
otice of Default" hereunder, unless
the Holders of a principal amount of
ncipal amount of Securities the
e, as the case may be, shall agree in
period prior to its expiration;
tee, or the Trustee and the Holders of
ies, as the case may be, shall be
\page
nsion of such period if corrective
ny within such period and is being
jurisdiction in the premises of
in respect of the Company in an
nder any applicable Federal or State
zation or other similar law or (2) a
mpany a bankrupt or insolvent, or
tition by one or more Persons other
ization, arrangement, adjustment or
the Company under any applicable
olvency or similar law, or appointing
r, assignee, trustee, sequestrator or
ompany or for any substantial part of
nding up or liquidation of its
order for relief or any such other
ned unstayed and in effect for a
principal amount of the Outstand

specifying such default or breac
stating that such notice is a "N
the Trustee, or the Trustee and
Securities not less than the pri
Holders of which gave such notic
writing to an extension of such
provided, however, that the Trus
such principal amount of Securit
54
deemed to have agreed to an exte

action is initiated by the Compa
diligently pursued; or
(d) the entry by a court having
(1) a decree or order for relief
involuntary case or proceeding u
bankruptcy, insolvency, reorgani
decree or order adjudging the Co
approving as properly filed a pe
than the Company seeking reorgan
composition of or in respect of
Federal or State bankruptcy, ins
a custodian, receiver, liquidato
other similar official for the C
its property, or ordering the wi
affairs, and any such decree or
decree or order shall have remai
period of 90 consecutive days; o
r
any of a voluntary case or
Federal or State bankruptcy,
her similar law or of any other case
a bankrupt or insolvent, or the
try of a decree or order for relief in
or proceeding under any applicable
olvency, reorganization or other
nt of any bankruptcy or insolvency
ompany, or the filing by the Company
nt seeking reorganization or relief
State bankruptcy, insolvency,
r the consent by the Company to the
e appointment of or taking possession
ator, assignee, trustee, sequestrator
ny or of any substantial part of its
ompany of an assignment for the
ission by the Company in writing of
enerally as they become due, or the
the Board of Directors of the Company;
hold any Outstanding Class A
e Trustee as the basis for the
ecurities which remain Outstanding
atured event of default under the
h Class A Bonds were authenticated and
atured event of default which (i) is
n Class A Bonds and is not of similar
f Default described in clause (d) or
ted in the acceleration of the Class A
(e) the commencement by the Comp

proceeding under any applicable
insolvency, reorganization or ot
or proceeding to be adjudicated
consent by the Company to the en
respect of the Company in a case
Federal or State bankruptcy, ins
similar law or to the commenceme
case or proceeding against the C
of a petition or answer or conse
under any applicable Federal or
reorganization or similar law, o
filing of such petition or to th
by a custodian, receiver, liquid
or similar official of the Compa
property, or the making by the C
benefit of creditors, or the adm
its inability to pay its debts g
authorization of such action by
or
(f) so long as the Trustee shall
Bonds which were delivered to th
authentication and delivery of S
hereunder, the occurrence of a m
Class A Mortgage under which suc
delivered (other than any such m
not a failure to make payments o
kind or character to the Event o
(e) above and (ii) has not resul
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds Outstanding under such Cla

ss A Mortgage); provided, however,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that, anything in this Indenture
to the contrary notwithstanding, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver or cure of such event of
default under the Class A Mortgage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall constitute a waiver and cu
re of the corresponding Event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default hereunder and the rescis
sion and annulment of the consequences
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any such event under such Cla
ss A Mortgage shall constitute a
consequences thereof.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 902. ACCELERATION OF MA
TURITY; RESCISSION AND ANNULMENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If an Event of Default shall hav
e occurred and be continuing, then in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql every such case the Trustee or t
he Holders of not less than 33% in principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the Outstanding Securi
ties may declare the principal amount (or, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the Securities of such se
ries are Discount Securities, such portion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the principal amount of such Sec
urities as may be specified in the terms thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as contemplated by Section 301)
of all of the Securities to be due and payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately, by a notice in writ
ing to the Company (and to the Trustee if given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Holders), and upon receipt by
the Company of notice of such declaration such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount (or specified a
mount) together with premium, if any, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accrued and unpaid interest shal
l become immediately due and payable.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At any time after such a declara
tion of acceleration of the maturity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Securities then Outstandi
ng shall have been made, but before any sale of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the Mortgaged Property ha
s been made and before a judgment or decree for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of the money due shall h
ave been obtained by the Trustee as provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Article, the Event or Event
s of Default giving rise to such declaration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration shall, without furt
her act, be deemed to have been cured, and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declaration and its consequences
shall, without further act, be deemed to have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been rescinded and annulled, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the Company shall have paid

or deposited with the Trustee a sum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient to pay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) all overdue interest, if any
, on all Securities then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the principal of and premiu
m, if any, on any Securities then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding which have become du
e otherwise than by such declaration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of acceleration and interest the
reon at the rate or rates prescribed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor in such Securities;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) to the extent that payment
of such interest is lawful,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest upon overdue interest a
t the rate or rates prescribed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor in such Securities;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) all amounts due to the Trus
tee under Section 1007;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) all Events of Default, other
than the non-payment of the principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Securities of such series whi
ch shall have become due solely by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declaration of acceleration, sha
ll have been cured or waived as provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No such rescission shall affect
any subsequent Event of Default or impair any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right consequent thereon.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 903. COLLECTION OF INDE
BTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If an Event of Default described
in clause (a) or (b) of Section 901
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have occurred, the Company
shall, upon demand of the Trustee, pay to it,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the benefit of the Holders o
f the Securities with respect to which such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event of Default shall have occu
rred, the whole amount then due and payable on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities for principal an
d premium, if any, and interest, if any, and, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent permitted by law, int
erest on premium, if any, and on any overdue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal and interest, at the r
ate or rates prescribed therefor in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, and, in addition the
reto, such further amount as shall be sufficient
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to cover any amounts due to the
Trustee under Section 1007.
\page
such amounts forthwith upon such
name and as trustee of an express trust, may
for the collection of the sums so due and
eding to judgment or final decree and may
pany or any other obligor upon such Securities
or decreed to be payable in the manner provided
e Company or any other obligor upon such
e occurred and be continuing, the
oceed to protect and enforce its rights and the
ies by such appropriate judicial proceedings as
ctual to protect and enforce any such rights,
ment of any covenant or agreement in this
ise of any power granted herein, or to enforce
ROOFS OF CLAIM.
eceivership, insolvency, liquidation,
ngement, adjustment, composition or other
the Company or any other obligor upon the
e Company or of such other obligor or their
tive of whether the principal of the Securities
therein expressed or by declaration or
ether the Trustee shall have made any demand on
verdue principal or interest) shall be entitled
n such proceeding or otherwise,
r the whole amount of principal,
56
If the Company shall fail to pay

demand, the Trustee, in its own
institute a judicial proceeding
unpaid, may prosecute such proce
enforce the same against the Com
and collect the moneys adjudged
by law out of the property of th
Securities, wherever situated.
If an Event of Default shall hav
Trustee may in its discretion pr
rights of the Holders of Securit
the Trustee shall deem most effe
whether for the specific enforce
Indenture or in aid of the exerc
any other proper remedy.
SECTION 904. TRUSTEE MAY FILE P
In case of the pendency of any r
bankruptcy, reorganization, arra
judicial proceeding relative to
Securities or the property of th
creditors, the Trustee (irrespec
shall then be due and payable as
otherwise and irrespective of wh
the Company for the payment of o
and empowered, by intervention i
(a) to file and prove a claim fo
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premium, if any, and interest, i

f any, owing and unpaid in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities and to file such
other papers or documents as may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary or advisable in order
to have the claims of the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including any claim for amounts
due to the Trustee under Section 1007
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any claims of the Trustee as
holder of Class A Bonds) and of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders allowed in such judicial
proceeding, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) to collect and receive any m
oneys or other property payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or deliverable on any such claim
s and to distribute the same;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any custodian, receiver, ass
ignee, trustee, liquidator, sequestrator or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other similar official in any su
ch judicial proceeding is hereby authorized by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Holder to make such payment
s to the Trustee and, in the event that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall consent to the mak
ing of such payments directly to the Holders, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay to the Trustee any amounts d
ue it under Section 1007.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nothing herein contained shall b
e deemed to authorize the Trustee to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorize or consent to or accep
t or adopt on behalf of any Holder any plan of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reorganization, arrangement, adj
ustment or composition affecting the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the rights of any Holder ther
eof or to authorize the Trustee to vote in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of the claim of any Hold
er in any such proceeding.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 905. TRUSTEE MAY ENFORC
E CLAIMS WITHOUT POSSESSION OF SECURITIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All rights of action and claims
under this Indenture or the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be prosecuted and enforced b
y the Trustee, without the possession of any of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities or the production
thereof in any proceeding relating thereto, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such proceeding instituted b
y the Trustee shall be brought in its own name
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as trustee of an express trust,
and any recovery of judgment shall, after
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision for the payment of the
reasonable compensation, expenses,

e Trustee, its agents and counsel, be for the
n respect of which such judgment has been
EY COLLECTED.
ee pursuant to this Article shall be
to the extent permitted by law, at the date or
in case of the distribution of such money on
if any, or interest, if any, upon presentation
which or for the benefit of which such money
e notation thereon of the payment if only
r thereof if fully paid:
unts due the Trustee under
ounts then due and unpaid upon the
premium, if any, and interest, if any, in
fit of which such money has been collected,
riority of any kind, according to the
Securities for principal, premium, if any,
ly; and
ainder, if any, to the Company or to
led to receive the same or as a court of
t.
S.
o institute any proceeding, judicial
is Indenture, or for the appointment of a
other remedy hereunder, unless:
disbursements and advances of th

ratable benefit of the Holders i
recovered.
SECTION 906. APPLICATION OF MON
Any money collected by the Trust
applied in the following order,
dates fixed by the Trustee and,
account of principal or premium,
of the Securities in respect of
shall have been collected and th
partially paid and upon surrende
FIRST: To the payment of all amo
Section 1007;
SECOND: To the payment of the am
Securities for principal of and
respect of which or for the bene
ratably, without preference or p
amounts due and payable on such
and interest, if any, respective
THIRD: To the payment of the rem
whomsoever may be lawfully entit
competent jurisdiction may direc
SECTION 907. LIMITATION ON SUIT
No Holder shall have any right t
or otherwise, with respect to th
receiver or trustee, or for any
(a) such Holder shall have previ
ously given written notice to the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee of a continuing Event of
Default;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the Holders of a majority in
aggregate principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Outstanding Securities shall
have made written request to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee to institute proceedings
in respect of such Event of Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in its own name as Trustee hereu
nder;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) such Holder or Holders shall
have offered to the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable indemnity against the
costs, expenses and liabilities to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurred in compliance with such
request;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) the Trustee for 60 days afte
r its receipt of such notice,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request and offer of indemnity s
hall have failed to institute any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) no direction inconsistent wi
th such written request shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been given to the Trustee d
uring such 60-day period by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of a majority in aggrega
te principal amount of the Outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it being understood and intended
that no one or more of the Holders of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities shall have any right
in any manner whatever by virtue of, or by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql availing of, any provision of th
is Indenture to affect, disturb or prejudice the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights of any other Holders or t
o obtain or to seek to obtain priority or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preference over any other Holder
s or to enforce any right under this Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except in the manner herein prov
ided and for the equal and ratable benefit of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Holders.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 908. UNCONDITIONAL RIGH
T OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND INTEREST.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding any other provis
ion in this Indenture, the Holder of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Security shall have the righ
t, which is absolute and unconditional, to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive payment of the principal
of and premium, if any, and (subject to Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 307) interest, if any, on such S
ecurity on the Stated Maturity or Maturities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expressed in such Security (or,
in the case of redemption, on the Redemption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date) and to institute suit for
the enforcement of any such payment, and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights shall not be impaired wit
hout the consent of such Holder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 909. RESTORATION OF RIG
HTS AND REMEDIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Trustee or any Holder has
instituted any proceeding to enforce
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any right or remedy under this I
ndenture and such proceeding shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discontinued or abandoned for an
y reason, or shall have been determined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adversely to the Trustee or to s
uch Holder, then and in every such case, subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any determination in such pro
ceeding, the Company, the Trustee and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder shall be restored several
ly and respectively to their former positions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder and thereafter all rig
hts and remedies of the Trustee and such Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall continue as though no such
proceeding had been instituted.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 910. RIGHTS AND REMEDIE
S CUMULATIVE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise provided in
the last paragraph of Section 306, no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right or remedy herein conferred
upon or reserved to the Trustee or to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders is intended to be exclus
ive of any other right or remedy, and every
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right and remedy shall, to the e
xtent permitted by law, be cumulative and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition to every other right an
d remedy given hereunder or now or hereafter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql existing at law or in equity or
otherwise. The assertion or employment of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right or remedy hereunder, or ot
herwise, shall not prevent the concurrent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assertion or employment of any o
ther appropriate right or remedy.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 911. DELAY OR OMISSION
NOT WAIVER.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No delay or omission of the Trus
tee or of any Holder to exercise any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right or remedy accruing upon an
y Event of Default shall impair any such right
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or remedy or constitute a waiver
of any such Event of Default or an acquiescence

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein. Every right and remedy
given by this Article or by law to the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to the Holders may be exercis
ed from time to time, and as often as may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed expedient, by the Trustee
or by the Holders, as the case may be.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 912. CONTROL BY HOLDERS
OF SECURITIES.
e occurred and be continuing, the
al amount of the Outstanding Securities shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the right to direct the tim
e, method and place of conducting any proceeding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any remedy available to the
Trustee, or exercising any trust or power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conferred on the Trustee, with r
espect to such Securities; provided, however,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) such direction shall not be
in conflict with any rule of law
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or with this Indenture, and coul
d not involve the Trustee in personal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability in circumstances where
indemnity would not, in the Trustee's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sole discretion, be adequate, an
d
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the Trustee may take any oth
er action deemed proper by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee which is not inconsisten
t with such direction.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 913. WAIVER OF PAST DEF
AULTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Holders of not less than a m
ajority in principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding Securities may on be
half of the Holders of all the Securities waive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any past default hereunder and i
ts consequences, except a default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) in the payment of the princi
pal of or premium, if any, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest, if any, on any Outstan
ding Security, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) in respect of a covenant or
provision hereof which under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1302 cannot be modified
or amended without the consent of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of each Outstanding Secur
ity of any series or Tranche affected.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon any such waiver, such defau
lt shall cease to exist, and any and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Events of Default arising th
erefrom shall be deemed to have been cured, for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql every purpose of this Indenture;
but no such waiver shall extend to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent or other default or i
mpair any right consequent thereon.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 914. UNDERTAKING FOR CO
STS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company and the Trustee agre
e, and each Holder by his acceptance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof shall be deemed to have
agreed, that any court may in its discretion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require, in any suit for the enf
orcement of any right or remedy under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, or in any suit agains
t the Trustee for any action taken, suffered or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omitted by it as Trustee, the fi
ling by any party litigant in such suit of an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undertaking to pay the costs of
such suit, and that such court may in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion assess reasonable cos
ts, including reasonable attorneys' fees,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against any party litigant in su
ch suit, having due regard to the merits and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good faith of the claims or defe
nses made by such party litigant but the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Section shall
not apply to any suit instituted by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, to any suit instituted
by the Trustee, to any suit instituted by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder, or group of Holders, hol
ding in the aggregate more than 10% in aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of the Securiti
es then Outstanding, or to any suit instituted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by any Holder for the enforcemen
t of the payment of the principal of or premium,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, or interest, if any, on
any Security on or after the Stated Maturity or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturities expressed in such Sec
urity (or in the case of redemption, on or after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Redemption Date).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 915. WAIVER OF USURY, S
TAY OR EXTENSION LAWS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company covenants (to the ex
tent that it may lawfully do so) that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it will not at any time insist u
pon, or plead, or in any manner whatsoever claim
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or take the benefit or advantage
of, any usury, stay or extension law wherever
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enacted, now or at any time here
after in force, which may affect the covenants

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the performance of this Inden
ture; and the Company (to the extent that it may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lawfully do so) hereby expressly
waives all benefit or advantage of any such law
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and covenants that it will not h
inder, delay or impede the execution of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power herein granted to the Trus
tee, but will suffer and permit the execution of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql every such power as though no su
ch law had been enacted.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 916. DEFAULTS UNDER CLA
SS A MORTGAGES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition to every other right
and remedy provided herein, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee may (but shall not be ob
ligated to) exercise any right or remedy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available to the Trustee in its
capacity as owner and holder of Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which arises as a result of a de
fault or matured event of default under any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Mortgage, whether or not
an Event of Default shall then have occurred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and be continuing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 917. RECEIVER AND OTHER
REMEDIES.
e occurred and, during the continuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, the Trustee shall have
commenced judicial proceedings to enforce any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right under this Indenture, the
Trustee shall, to the extent permitted by law,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be entitled, prior to the Releas
e Date, as against the Company, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointment of a receiver of the
Mortgaged Property and subject to the rights,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, of others to receive col
lections from former, present or future
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers of the rents, issues,
profits, revenues and other income thereof, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not any receiver is a
ppointed, the Trustee shall be entitled to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retain possession and control of
, and to collect and receive the income from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash, securities and other perso
nal property held by the Trustee hereunder and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to all other remedies available
to mortgagees and secured parties under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Uniform Commercial Code or any o
ther applicable law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE TEN

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE TRUSTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1001. CERTAIN DUTIES AN
D RESPONSIBILITIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Trustee shall have and b
e subject to all the duties and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibilities specified with
respect to an indenture trustee in the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act and no implied cov
enants or obligations shall be read into this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture against the Trustee. F
or purposes of Sections 315(a) and 315(c) of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trust Indenture Act, the term "d
efault" is hereby defined as an Event of Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which has occurred and is contin
uing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) No provision of this Indentu
re shall require the Trustee to expend
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or risk its own funds or otherwi
se incur any financial liability in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance of any of its duties
hereunder, or in the exercise of any of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights or powers, if it shall ha
ve reasonable grounds for believing that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql repayment of such funds or adequ
ate indemnity against such risk or liability is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not reasonably assured to it.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Notwithstanding anything con
tained in this Indenture to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contrary, the duties and respons
ibilities of the Trustee under this Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be subject to the protecti
ons, exculpations and limitations on liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql afforded to an indenture trustee
under the provisions of the Trust Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act. For the purposes of Section
s 315(b) and 315(d)(2) of the Trust Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act, the term "responsible offic
er" is hereby defined as a Responsible Officer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the chairman or vice chairma
n of the board of directors, the chairman or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vice chairman of the executive c
ommittee of the board of directors, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql president, any vice president, t
he secretary, any assistant secretary, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql treasurer any assistant treasure
r, the cashier, any assistant cashier, any trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer or assistant trust offic
er, the controller and any assistant controller
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Trustee, or any other off
icer of the Trustee customarily performing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql functions similar to those perfo
rmed by a Responsible Officer or any of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above designated officers and al
so means, with respect to a particular corporate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trust matter, any other officer

to whom such matter is referred because of his
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or her knowledge of and familiar
ity with the particular subject.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Whether or not therein expre
ssly so provided, every provision of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture relating to the c
onduct or affecting the liability of or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affording protection to the Trus
tee shall be subject to the provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1002. NOTICE OF DEFAULT
S.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee shall give notice of
any default hereunder known to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee in the manner and to the
extent required to do so by the Trust Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act, unless such default shall h
ave been cured or waived; provided, however,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that in the case of any default
of the character specified in Section 901(c), no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such notice to Holders shall be
given until at least 60 days after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence thereof. For the purp
ose of this Section, the term "default" means
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any event which is, or after not
ice or lapse of time, or both, would become, an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event of Default.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee shall give to the tr
ustee under each Class A Mortgage a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy of each notice of default g
iven to the Holders pursuant to this Section. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, the Trustee shall give
to the Holders copies of each notice of default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under any Class A Mortgage given
to the Trustee in its capacity as owner and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of Class A Bonds delivere
d thereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1003. CERTAIN RIGHTS OF
TRUSTEE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the provisions of Sec
tion 1001 and to the applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Trust Indentur
e Act:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the Trustee may conclusively
rely and shall be fully protected in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acting or refraining from acting
upon any resolution, certificate, statement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument, opinion, report, not

ice, request, direction, consent, order, bond,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql debenture, note, other evidence
of indebtedness or other paper or document
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql believed by it to be genuine and
to have been signed or presented by the proper
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party or parties;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) any request or direction of
the Company mentioned herein shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficiently evidenced by a Comp
any Request or Company Order, or as otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expressly provided herein, and a
ny resolution of the Board of Directors may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficiently evidenced by a Boar
d Resolution;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) whenever in the administrati
on of this Indenture the Trustee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deem it desirable that a matter
be proved or established prior to taking,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suffering or omitting any action
hereunder, the Trustee (unless other evidence
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be herein specifically prescribe
d) may, in the absence of bad faith on its part,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusively rely upon an Office
r's Certificate;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) the Trustee may consult with
counsel and the written advice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such counsel or any Opinion of C
ounsel shall be full and complete authorization
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and protection in respect of any
action taken, suffered or omitted by it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder in good faith and in r
eliance thereon;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) the Trustee shall be under n
o obligation to exercise any of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights or powers vested in it by
this Indenture at the request or direction of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Holder pursuant to this Inde
nture, unless such Holder shall have offered to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee reasonable security
or indemnity against the costs, expenses and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities which might be incur
red by it in compliance with such request or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql direction;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) the Trustee shall not be bou
nd to make any investigation into the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facts or matters stated in any r
esolution, certificate, statement, instrument,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opinion, report, notice, request
, direction, consent, order, bond, debenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql note, other evidence of indebted
ness or other paper or document, but the
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, in its discretion, may
make such further inquiry or investigation into
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such facts or matters as it may
see fit, and, if the Trustee shall determine to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql make such further inquiry or inv
estigation, it shall (subject to applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal requirements) be entitled
to examine, during normal business hours, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql books, records and premises of t
he Company, personally or by agent or attorney;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) the Trustee may execute any
of the trusts or powers hereunder or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform any duties hereunder eit
her directly or by or through agents or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorneys and the Trustee shall
not be responsible for any misconduct or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negligence on the part of any ag
ent or attorney appointed with due care by it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) the Trustee shall not be cha
rged with knowledge of any default (as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in Section 1002) or Even
t of Default unless either (1) a Responsible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer of the Trustee shall hav
e actual knowledge of such default or Event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default or (2) written notice of
such default or Event of Default shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been given to the Trustee by the
Company or any other obligor on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, or by any Holder of
such Securities, or, in the case of an Event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default described in Section 901
(f), by the trustee under the applicable Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the rights, privileges, prot
ections, immunities and benefits given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee, including, witho
ut limitation, its right to be indemnified, are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extended to, and shall be enforc
eable by, the Trustee in each of its capacities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) the Trustee shall not be lia
ble for any action taken, suffered or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omitted to be taken by it in goo
d faith and reasonably believed by it to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized or within the discret
ion or rights or powers conferred upon it by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1004. NOT RESPONSIBLE F
OR RECITALS OR ISSUANCE OF SECURITIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The recitals contained herein an
d in the Securities (except the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee's certificates of authen
tication) shall be taken as the statements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, and neither the Tru
stee nor any Authenticating Agent assumes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibility for their correct
ness. The Trustee makes no representations as to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the value or condition of the Mo
rtgaged Property, the title of the Company to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Mortgaged Property, the secu
rity afforded by the Lien of this Indenture, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql validity or genuineness of any s
ecurities deposited with the Trustee hereunder,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the validity or sufficiency o
f this Indenture or of the Securities. Neither
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee nor any Authenticati
ng Agent shall be accountable for the use or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application by the Company of Se
curities or the proceeds thereof or any money
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid to the Company hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1005. MAY HOLD SECURITI
ES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each of the Trustee, any Authent
icating Agent, any Paying Agent, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar or any other
agent of the Company, in its individual or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other capacity, may become the o
wner or pledgee of Securities and, subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 1008 and 1013, may othe
rwise deal with the Company with the same rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it would have if it were not the
Trustee, Authenticating Agent, Paying Agent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Registrar or such other
agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1006. MONEY HELD IN TRU
ST.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Money held by the Trustee in tru
st hereunder need not be segregated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from other funds, except to the
extent required by law. The Trustee shall be
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under no liability for interest
on or investment of any money received by it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder except as expressly pr
ovided herein or otherwise agreed with, and for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sole benefit of, the Company
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1007. COMPENSATION AND
REIMBURSEMENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall
to time reasonable compensation
hereunder (which compensation shall
of law in regard to the compensation
);
y provided herein, reimburse the
reasonable expenses, disbursements
or made by the Trustee in accordance
ture (including the reasonable
d disbursements of its agents and
hat any such expense, disbursement or
he Trustee's negligence, willful
nd hold it harmless from and
expense reasonably incurred by it
with the acceptance or administration
or the performance of its duties
ble costs and expenses of defending
ility in connection with the exercise
ers or duties hereunder except to the
or expense may be attributable to its
r bad faith.
of the obligations of the Company
shall have a lien prior to the Securities upon
roperty and funds held or collected by the
erty and funds held in trust under Section 803
mpany as provided in Section 803).
e to the rights provided to the
ons of this Indenture, when the Trustee incurs
(a) pay to the Trustee from time

for all services rendered by it
not be limited by any provision
of a trustee of an express trust
(b) except as otherwise expressl
Trustee upon its request for all
and advances reasonably incurred
with any provision of this Inden
compensation and the expenses an
counsel), except to the extent t
advance may be attributable to t
misconduct or bad faith; and
(c) indemnify the Trustee for, a
against, any loss, liability or
arising out of or in connection
of the trust or trusts hereunder
hereunder, including the reasona
itself against any claim or liab
or performance of any of its pow
extent any such loss, liability
negligence, willful misconduct o
As security for the performance
under this Section, the Trustee
the Mortgaged Property and all p
Trustee as such, other than prop
(except moneys payable to the Co
In addition and without prejudic
Trustee under any of the provisi
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses or renders services in

connection with an Event of Default specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 901(d) or Section 901(e)
, the expenses (including the reasonable charges
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and expenses of its counsel) and
the compensation for the services are intended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to constitute expenses of admini
stration under any applicable Federal and State
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy, insolvency or other
similar law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company's obligations under
this Section 1007 and the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in this Section 1007
shall survive the resignation or removal of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, the discharge of the Co
mpany's obligations under Article Eight of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and/or the termination
of this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "TRUSTEE" for purposes of this S
ection 1007 shall include any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql predecessor Trustee; provided, h
owever, that the negligence, willful misconduct
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or bad faith of any Trustee here
under shall not affect the rights of any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee hereunder.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1008. DISQUALIFICATION;
CONFLICTING INTERESTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Trustee shall have or acq
uire any conflicting interest within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the meaning of the Trust Indentu
re Act, it shall either eliminate such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conflicting interest or resign t
o the extent, in the manner and with the effect,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and subject to the conditions, p
rovided in the Trust Indenture Act and this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture. For purposes of Secti
on 310(b)(1) of the Trust Indenture Act and to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent permitted thereby, th
e Trustee, in its capacity as trustee in respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Securities of any series,
shall not be deemed to have a conflicting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest arising from its capaci
ty as trustee in respect of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other series issued under th
is Indenture. Nothing herein shall prevent the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee from filing with the Com
mission the application referred to in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql second to last paragraph of Sect
ion 310(b) of the Trust Indenture Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1009. CORPORATE TRUSTEE
REQUIRED; ELIGIBILITY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There shall at all times be a Tr
ustee hereunder which shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a corporation organized and
doing business under the laws of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States of America, any St
ate thereof or the District of Columbia,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized under such laws to ex
ercise corporate trust powers, having a combined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital and surplus of at least
$50,000,000 and subject to supervision or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql examination by Federal, State or
District of Columbia authority, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) if and to the extent permitt
ed by the Commission by rule,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulation or order upon applica
tion, a corporation or other Person organized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and doing business under the law
s of a foreign government, authorized under such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws to exercise corporate trust
powers, having a combined capital and surplus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of at least $50,000,000 or the D
ollar equivalent of the applicable foreign
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currency and subject to supervis
ion or examination by authority of such foreign
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql government or a political subdiv
ision thereof substantially equivalent to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supervision or examination appli
cable to United States institutional trustees,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, in either case, qualified a
nd eligible under this Article and the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act. If such corporati
on publishes reports of condition at least
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annually, pursuant to law or to
the requirements of such supervising or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql examining authority, then for th
e purposes of this Section, the combined capital
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and surplus of such corporation
shall be deemed to be its combined capital and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surplus as set forth in its most
recent report of condition so published. If at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time the Trustee shall cease
to be eligible in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Section and t
he Trust Indenture Act, it shall resign
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately in the manner and wi
th the effect hereinafter specified in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1010. RESIGNATION AND R
EMOVAL; APPOINTMENT OF SUCCESSOR.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) No resignation or removal of
the Trustee and no appointment of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor Trustee pursuant to th
is Article shall become effective until the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptance of appointment by the

successor Trustee in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable requirements of Secti
on 1011.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Trustee may resign at an
y time by giving written notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof to the Company. If the i
nstrument of acceptance by a successor Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by Section 1011 shall n
ot have been delivered to the Trustee within 30
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days after the giving of such no
tice of resignation, the resigning Trustee may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql petition any court of competent
jurisdiction for the appointment of a successor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Trustee may be removed a
t any time by Act of the Holders of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority in principal amount of
the Outstanding Securities delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee and the Company.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) If at any time:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the Trustee shall fail to co
mply with Section 1008 after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written request therefor by the
Company or by any Holder who has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a bona fide Holder for at least
six months, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the Trustee shall cease to
be eligible under Section 1009 or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 310(a) of the Trust Inde
nture Act and shall fail to resign
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after written request therefor b
y the Company or by any such Holder,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the Trustee shall become i
ncapable of acting or shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjudged a bankrupt or insolvent
or a receiver of the Trustee or of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its property shall be appointed
or any public officer shall take
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charge or control of the Trustee
or of its property or affairs for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose of rehabilitation, conse
rvation or liquidation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then, in any such case, (x) the
Company by Board Resolutions may remove the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee with respect to all Secu
rities or (y) subject to Section 914, any Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql who has been a bona fide Holder

for at least six months may, on behalf of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql himself and all others similarly
situated, petition any court of competent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction for the removal of
the Trustee with respect to all Securities and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the appointment of a successor T
rustee or Trustees.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) If the Trustee shall resign,
be removed or become incapable of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acting, or if a vacancy shall oc
cur in the office of Trustee for any cause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (other than as contemplated by c
lause (y) in subsection (d) or this Section),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, by Board Resolution
s, shall promptly appoint a successor Trustee or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustees and shall comply with t
he applicable requirements of Section 1011. If,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within one year after such resig
nation, removal or incapability, or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence of such vacancy, a su
ccessor Trustee shall be appointed by Act of the
al amount of the Outstanding Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to the Company and the
retiring Trustee, the successor Trustee so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointed shall, forthwith upon
its acceptance of such appointment in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the applicable requirements
of Section 1011, become the successor Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to that extent supersede the
successor Trustee appointed by the Company. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no successor Trustee shall have
been so appointed by the Company or the Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and accepted appointment in the
manner required by Section 1011, any Holder who
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been a bona fide Holder of a
Security of such series for at least six months
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may, on behalf of itself and all
others similarly situated, petition any court
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of competent jurisdiction for th
e appointment of a successor Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) So long as no event which is
, or after notice or lapse of time, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql both, would become, an Event of
Default shall have occurred and be continuing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and except with respect to a Tru
stee appointed by Act of the Holders of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority in principal amount of
the Outstanding Securities pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection (e) of this Section,
if the Company shall have delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee (i) Board Resolutions ap
pointing a successor Trustee, effective as of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date specified therein, and (ii)
an instrument of acceptance of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointment, effective as of suc
h date, by such successor Trustee in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Section 1011, the Trustee s

hall be deemed to have resigned as contemplated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in subsection (b) of this Sectio
n, the successor Trustee shall be deemed to have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been appointed by the Company pu
rsuant to subsection (e) of this Section and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such appointment shall be deemed
to have been accepted as contemplated in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1011, all as of such dat
e, and all other provisions of this Section and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1011 shall be applicable
to such resignation, appointment and acceptance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except to the extent inconsisten
t with this subsection (f).
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The Company shall give notic
e of each resignation and each removal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Trustee and each appointm
ent of a successor Trustee to all Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities in the manner provide
d in Section 108. Each notice shall include the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name of the successor Trustee an
d the address of its Corporate Trust Office.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1011. ACCEPTANCE OF APP
OINTMENT BY SUCCESSOR.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) In case of the appointment h
ereunder of a successor Trustee, every
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such successor Trustee so appoin
ted shall execute, acknowledge and deliver to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company and to the retiring
Trustee an instrument accepting such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointment, and thereupon the r
esignation or removal of the retiring Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall become effective and such
successor Trustee, without any further act, deed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or conveyance, shall become vest
ed with all the rights, powers, trusts and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duties of the retiring Trustee;
but, on the request of the Company or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor Trustee, such retiring
Trustee shall, upon payment of all sums owed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it, execute and deliver an instr
ument transferring to such successor Trustee all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rights, powers and trusts of
the retiring Trustee and shall duly assign,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer and deliver to such suc
cessor Trustee all property and money held by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such retiring Trustee hereunder
(including all interest in the Class A Bonds),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject nevertheless to its Lien
provided for in Section 1007.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Upon request of any such suc
cessor Trustee, the Company shall

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execute any instruments for more
fully and certainly vesting in and confirming
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such successor Trustee all su
ch rights, powers and trusts referred to in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection (a) of this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) No successor Trustee shall a
ccept its appointment unless at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time of such acceptance such suc
cessor Trustee shall be qualified and eligible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Article.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1012. MERGER, CONVERSIO
N, CONSOLIDATION OR SUCCESSION TO BUSINESS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any corporation into which the T
rustee may be merged or converted or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with which it may be consolidate
d, or any corporation resulting from any merger,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conversion or consolidation to w
hich the Trustee shall be a party, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation succeeding to all or
substantially all the corporate trust business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Trustee, shall be the suc
cessor of the Trustee hereunder, provided such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation shall be otherwise q
ualified and eligible under this Article,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the execution or filing
of any paper or any further act on the part of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the parties hereto. In ca
se any Securities shall have been authenticated,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but not delivered, by the Truste
e then in office, any successor by merger,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conversion or consolidation to s
uch authenticating Trustee may adopt such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and deliver the S
ecurities so authenticated with the same effect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as if such successor Trustee had
itself authenticated such Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1013. PREFERENTIAL COLL
ECTION OF CLAIMS AGAINST COMPANY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Trustee shall be or becom
e a creditor of the Company or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other obligor upon the Securitie
s (other than by reason of a relationship
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in Section 311(b) of t
he Trust Indenture Act), the Trustee shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to any and all applicabl
e provisions of the Trust Indenture Act
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regarding the collection of clai
ms against the Company or such other obligor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For purposes of Section 311(b) o
f the Trust Indenture Act (a) the term "cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction" shall have the mean
ing provided in Rule 11b-4 under the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act, and (b) the term
"self-liquidating paper" shall have the meaning
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Rule 11b-6 under the

Trust Indenture Act.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1014. CO-TRUSTEE AND SE
PARATE TRUSTEES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At any time or times, for the pu
rpose of meeting the legal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of any applicable j
urisdiction, the Company and the Trustee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have power to appoint, and, upon
the written request of the Trustee or of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of at least 33% in princ
ipal amount of the Securities then Outstanding,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall for such purpo
se join with the Trustee in the execution and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of all instruments and
agreements necessary or proper to appoint, one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or more Persons approved by the
Trustee either to act as co-trustee, jointly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Trustee, or to act as s
eparate trustee, in either case with such powers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as may be provided in the instru
ment of appointment, and to vest in such Person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Persons, in the capacity afor
esaid, any property, title, right or power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed necessary or desirable, s
ubject to the other provisions of this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Company does not join in
such appointment within 15 days after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt by it of a request so to
do, or if an Event of Default shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred and be continuing, the
Trustee alone shall have power to make such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Should any written instrument or
instruments from the Company be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by any co-trustee or se
parate trustee to more fully confirm to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql co-trustee or separate trustee s
uch property, title, right or power, any and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such instruments shall, on reque
st, be executed, acknowledged and delivered by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Every co-trustee or separate tru
stee shall, to the extent permitted by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law, but to such extent only, be
appointed subject to the following conditions:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the Securities shall be auth
enticated and delivered, and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights, powers, duties and oblig
ations hereunder in respect of the
other personal property held by, or
ged with, the Trustee hereunder, shall
tee;
nd obligations hereby conferred
espect of any property covered by such
r imposed upon and exercised or
or by the Trustee and such co-trustee
shall be provided in the instrument
parate trustee, except to the extent
iction in which any particular act is
ll be incompetent or unqualified to
such rights, powers, duties and
nd performed by such co-trustee or
an instrument in writing executed
he Company, may accept the resignation
eparate trustee appointed under this
ault shall have occurred and be
ve power to accept the resignation of,
r separate trustee without the
the written request of the Trustee,
Trustee in the execution and delivery
s necessary or proper to effectuate
uccessor to any co-trustee or separate
ay be appointed in the manner provided
ustee hereunder shall be
ny act or omission of the Trustee, or
, and the Trustee shall not be
custody of securities, cash and

required to be deposited or pled
be exercised solely, by the Trus
(b) the rights, powers, duties a
or imposed upon the Trustee in r
appointment shall be conferred o
performed either by the Trustee
or separate trustee jointly, as
appointing such co-trustee or se
that under any law of any jurisd
to be performed, the Trustee sha
perform such act, in which event
obligations shall be exercised a
separate trustee.
(c) the Trustee at any time, by
by it, with the concurrence of t
of or remove any co-trustee or s
Section, and, if an Event of Def
continuing, the Trustee shall ha
or remove, any such co-trustee o
concurrence of the Company. Upon
the Company shall join with the
of all instruments and agreement
such resignation or removal. A s
trustee so resigned or removed m
in this Section;
(d) no co-trustee or separate tr
personally liable by reason of a
any other such trustee hereunder
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personally liable by reason of a
ny act or omission of any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql co-trustee or separate trustee;
and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) any Act of Holders delivered
to the Trustee shall be deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to have been delivered to each s
uch co-trustee and separate trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1015. APPOINTMENT OF AU
THENTICATING AGENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee may appoint an Authe
nticating Agent or Agents with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Securities of one or more
series, or any Tranche thereof, which shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized to act on behalf of t
he Trustee to authenticate Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series or Tranche issued upon or
iginal issuance, exchange, registration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer or partial redemption t
hereof or pursuant to Section 306, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities so authenticated shal
l be entitled to the benefits of this Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall be valid and obligator
y for all purposes as if authenticated by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee hereunder. Wherever refe
rence is made in this Indenture to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and delivery of S
ecurities by the Trustee or the Trustee's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate of authentication, s
uch reference shall be deemed to include
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and delivery on b
ehalf of the Trustee by an Authenticating Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and a certificate of authenticat
ion executed on behalf of the Trustee by an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authenticating Agent. Each Authe
nticating Agent shall be acceptable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and shall at all times b
e a corporation organized and doing business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the laws of the United Sta
tes of America, any State or territory thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the District of Columbia or t
he Commonwealth of Puerto Rico, authorized under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such laws to act as Authenticati
ng Agent, having a combined capital and surplus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of not less than $50,000,000 and
subject to supervision or examination by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Federal or State authority. If s
uch Authenticating Agent publishes reports of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition at least annually, pur
suant to law or to the requirements of said
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supervising or examining authori
ty, then for the purposes of this Section, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined capital and surplus of

such Authenticating Agent shall be deemed to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its combined capital and surplus
as set forth in its most recent report of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition so published. If at an
y time an Authenticating Agent shall cease to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible in accordance with the
provisions of this Section, such Authenticating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent shall resign immediately i
n the manner and with the effect specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any corporation into which an Au
thenticating Agent may be merged or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql converted or with which it may b
e consolidated, or any corporation resulting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from any merger, conversion or c
onsolidation to which such Authenticating Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be a party, or any corpora
tion succeeding to the corporate agency or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporate trust business of an A
uthenticating Agent, shall continue to be an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authenticating Agent, provided s
uch corporation shall be otherwise eligible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Section, without the
execution or filing of any paper or any further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql act on the part of the Trustee o
r the Authenticating Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An Authenticating Agent may resi
gn at any time by giving written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice thereof to the Trustee an
d the Company. The Trustee may at any time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate the agency of an Authe
nticating Agent by giving written notice thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such Authenticating Agent and
the Company. Upon receiving such a notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resignation or upon such a termi
nation, or in case at any time such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authenticating Agent shall cease
to be eligible in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Section, the
Trustee may appoint a successor Authenticating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent which shall be acceptable
to the Company. Any successor Authenticating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent upon acceptance of its app
ointment hereunder shall become vested with all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rights, powers and duties of
its predecessor hereunder, with like effect as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if originally named as an Authen
ticating Agent. No successor Authenticating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent shall be appointed unless
eligible under the provisions of this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company agrees to pay to eac
h Authenticating Agent from time to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time reasonable compensation for
its services under this Section.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The provisions of Sections 308,
1004 and 1005 shall be applicable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Authenticating Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If an appointment with respect t
o the Securities of one or more
shall be made pursuant to this Section, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of such series or Tra
nche may have endorsed thereon, in addition to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee's certificate of aut
hentication, an alternate certificate of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication substantially in
the following form:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This is one of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in the within-mentio
ned Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By______________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As Authenticating Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By______________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorized Officer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If all of the Securities of a se
ries may not be originally issued at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one time, and if the Trustee doe
s not have an office capable of authenticating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities upon original issuanc
e located in a Place of Payment where the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company wishes to have Securitie
s of such series authenticated upon original
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance, the Trustee, if so req
uested by the Company in writing (which writing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql need not comply with Section 102
and need not be accompanied by an Opinion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Counsel), shall appoint, in acco
rdance with this Section and in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such procedures as shall be acce
ptable to the Trustee, an Authenticating Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql having an office in a Place of P
ayment designated by the Company with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such series of Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE ELEVEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql HOLDERS' LISTS AND REPORTS BY TR
USTEE AND COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1101. LISTS OF HOLDERS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiannually, not later than Jun
e 1 and December 1 in each year,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commencing December 1, 2002 and
at such other times as the Trustee may request
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing, the Company shall fu
rnish or cause to be furnished to the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information as to the names and
addresses of the Holders, and the Trustee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preserve such information and si
milar information received by it in any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacity and afford to the Holde
rs access to information so preserved by it, all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such extent, if any, and in s
uch manner as shall be required by the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act; provided, however
, that no such list need be furnished so long as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee shall be the Securit
y Registrar.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1102. REPORTS BY TRUSTE
E AND COMPANY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Not later than November 1 in eac
h year, commencing with the year 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee shall transmit to th
e Holders, the Commission and each securities
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange upon which any Securiti
es are listed, a report, dated as of the next
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding September 15, with res
pect to any events and other matters described
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Section 313(a) of the Trust I
ndenture Act, in such manner and to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by the Trust Indenture
Act. The Trustee shall transmit to the Holders,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Commission and each securiti
es exchange upon which any Securities are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql listed, and the Company shall fi
le with the Trustee (within 30 days after filing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Commission in the case
of reports which pursuant to the Trust Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act must be filed with the Commi
ssion and furnished to the Trustee) and transmit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Holders, such other infor
mation, reports and other documents, if any, at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such times and in such manner, a
s shall be required by the Trust Indenture Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall notify the Tru
stee of the listing of any Securities on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities exchange.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delivery of such reports, inform
ation and documents to the Trustee is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for informational purposes only,
and the Trustee's receipt of such shall not

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute notice or constructiv
e notice of any information contained therein or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determinable from information co
ntained therein, including the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with any of its coven
ants hereunder (as to which the Trustee is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to rely exclusively on
Officer's Certificates).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall file with the
Trustee (within thirty (30) days after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filing with the Commission in th
e case of reports that pursuant to the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act must be filed with
the Commission and furnished to the Trustee)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and transmit to the Holders, suc
h other information, reports and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents, if any, at such times
and in such manner, as shall be required by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trust Indenture Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE TWELVE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSOLIDATION, MERGER, CONVEYANC
E, OR OTHER TRANSFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1201. COMPANY MAY CONSO
LIDATE, ETC., ONLY ON CERTAIN TERMS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall not consolidat
e with or merge into any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation, or convey or otherw
ise transfer, or lease, as or substantially as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an entirety the Company's Electr
ic Utility Property to any Person, unless:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the corporation formed by su
ch consolidation or into which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company is merged or the Person
which acquires by conveyance or other transfer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or which leases, as or substanti
ally as an entirety such Electric Utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property shall be a corporation
organized and existing under the laws of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States, any State or Terr
itory thereof or the District of Columbia (such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation being hereinafter so
metimes called the "SUCCESSOR COMPANY") and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall execute and deliver to the
Trustee an indenture supplemental hereto, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form recordable and reasonably s
atisfactory to the Trustee, which:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) in the case of a consolidati
on, merger, conveyance or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer, or in the case of a le
ase if the term thereof extends beyond
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the last Stated Maturity of the
Securities then Outstanding, contains
cessor Company of the due and punctual
premium, if any, and interest, if any,
anding and the performance and
condition of this Indenture to be
pany, and
\page
ion, merger, conveyance or other
te, contains a grant, conveyance,
cessor Company, of the same tenor of
Indenture on the Mortgaged
tely prior to the time such
d subjecting to the Lien of this
rsonal and mixed, thereafter
y which shall constitute an
on to the Mortgaged Property (as
placement or substitution of or
ssor Company, subjecting to
property, real, personal or
ty described in subclause (A)
acquired by the Successor Company
in its sole discretion, specify
d by such grant, conveyance, transfer
ffect and standing similar to those
would have had if the Company had not
on, merger, conveyance or other
an express assumption by the Suc

payment of the principal of and
on all the Securities then Outst
observance of every covenant and
performed or observed by the Com
71
(ii) in the case of a consolidat

transfer prior to the Release Da
transfer and mortgage by the Suc
the Granting Clauses herein,
(A) confirming the Lien of this
Property (as constituted immedia
transaction became effective) an
Indenture all property, real, pe
acquired by the Successor Compan
improvement, extension or additi
so constituted) or a renewal, re
for any part thereof, and,
(B) at the election of the Succe
the Lien of this Indenture such
mixed, in addition to the proper
above, then owned or thereafter
as the Successor Company shall,
or describe therein,
and the Lien confirmed or create
and mortgage shall have force, e
which the Lien of this Indenture
been a party to such consolidati
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer and had itself, after t

he time such transaction became
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective, purchased, constructe
d or otherwise acquired the property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to such grant, conveyanc
e, transfer and mortgage;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) in the case of a lease, such
lease shall be made expressly subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to termination at any time durin
g the continuance of an Event of Default, by (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company or the Trustee and (
ii) the purchaser of the property so leased at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any sale thereof hereunder, whet
her such sale be made under the power of sale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby conferred or pursuant to
judicial proceedings;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) the Company shall have deliv
ered to the Trustee an Officer's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate and an Opinion of Co
unsel each of which shall state that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidation, merger, conveyanc
e or other transfer or lease, and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indenture, comply w
ith this Article and that all conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql precedent herein provided for re
lating to such transaction have been complied
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) immediately after giving eff
ect to such transaction (and treating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Debt that becomes an obligat
ion of the Successor Company as a result of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction as having been incur
red by the Successor Company at the time of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction), no Default or Even
t of Default shall have occurred and be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used in this Article and in S
ection 1810(d), the terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "improvement", "extension" and "
addition" shall be limited to (a) with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to real property subject to the
Lien of this Indenture, any item of personal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property which has been so affix
ed or attached to such real property as to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regarded a part of such real pro
perty under applicable law and (b) with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to personal property subject to
the Lien of this Indenture, any improvement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extension or addition to such pe
rsonal property which (i) is made to maintain,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql renew, repair or improve the fun
ction of such personal property and (ii) is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql physically installed in or affix
ed to such personal property.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1202. SUCCESSOR COMPANY
SUBSTITUTED.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon any consolidation or merger
or any conveyance or other transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, as or substantially as an en
tirety the Company's Electric Utility Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with Section 1201,
the Successor Company shall succeed to, and be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substituted for, and may exercis
e every power and right of, the Company under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture with the same eff
ect as if such Successor Company had been named
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the "Company" herein. Without
limiting the generality of the foregoing:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) all property of the Successo
r Company then subject to the Lien of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture, of the character
described in Section 103, shall constitute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the Successor Company may ex
ecute and deliver to the Trustee, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereupon the Trustee shall, sub
ject to the provisions of Article Sixteen,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticate and deliver, Securi
ties upon any basis provided in Article Sixteen;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) the Successor Company may, s
ubject to the applicable provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture, cause Property A
dditions to be applied to any other Authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purpose.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All Securities so executed by th
e Successor Company, and authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered by the Trustee, shall
in all respects be entitled to the benefit of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lien of this Indenture equal
ly and ratably with all Securities executed,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered prio
r to the time such consolidation, merger,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance or other transfer bec
ame effective.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1203. EXTENT OF LIEN HE
REOF ON PROPERTY OF SUCCESSOR COMPANY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless, in the case of a consoli
dation, merger, conveyance or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer contemplated by Section
1201, the indenture supplemental hereto
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated in Section 1201 or
in Article Thirteen expressly provides
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise, neither this Indentur

e nor such supplemental indenture shall become
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or be, or be required to become
or be, a Lien upon any of the properties:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) owned by the Successor Compa
ny or any other party to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction (other than the Comp
any) immediately prior to the time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effectiveness of such transactio
n or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) acquired by the Successor Co
mpany at or after the time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effectiveness of such transactio
n,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except, in either case, properti
es acquired from the Company in or as a result
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such transaction and improvem
ents, extensions and additions to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties and renewals, replace
ments and substitutions of or for any part or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parts thereof.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1204. RELEASE OF COMPAN
Y UPON CONVEYANCE OR OTHER TRANSFER.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the case of a conveyance or o
ther transfer to any Person or Persons
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as contemplated in Section 1201,
upon the satisfaction of all the conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Section 1201 the Co
mpany (such term being used in this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without giving effect to such tr
ansaction) shall be released and discharged from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all obligations and covenants un
der this Indenture and on and under all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities then Outstanding (unl
ess the Company shall have delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee an instrument in which i
t shall waive such release and discharge) and,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon request by the Company, the
Trustee shall acknowledge in writing that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company has been so released and
discharged.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1205. MERGER INTO COMPA
NY; EXTENT OF LIEN HEREOF.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Nothing in this Indenture sh
all be deemed to prevent or restrict
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any consolidation or merger afte
r the consummation of which the Company would be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the surviving or resulting corpo
ration or any conveyance or other transfer, or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lease, of any part of the Compan
y's Electric Utility Property which does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute the entirety or subst
antially the entirety of its Electric Utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Unless, in the case of a con
solidation or merger described in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection (a) of this Section,
an indenture supplemental hereto shall otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide, this Indenture shall no
t become or be, or be required to become or be,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Lien upon any of the propertie
s acquired by the Company in or as a result of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such transaction or any improvem
ents, extensions or additions to such properties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any renewals, replacements or
substitutions of or for any part or parts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1206. TRANSFER OF LESS
THAN SUBSTANTIALLY ALL.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A conveyance, transfer or lease
by the Company of Electric Utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property shall not be deemed to
constitute the conveyance, transfer or lease as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or substantially as an entirety
of its Electric Utility Property for purposes of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture if the Fair Value
of the Electric Utility Property retained by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company exceeds 143% of the
aggregate principal amount of all Outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and any other outstan
ding debt securities of the Company that rank
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equally with, or senior to the I
ndenture Securities with respect to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Utility Property, other
than any Class A Bonds held by the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such Fair Value shall be establi
shed by the delivery to the Trustee of an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Independent Expert's Certificate
stating the Independent Expert's opinion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Fair Value as of a date not
more than 90 days before or after such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance, transfer or lease. T
his Article is not intended to limit the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's conveyances, transfers
or leases of less than the entirety or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantially the entirety of it
s Electric Utility Property.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE THIRTEEN
NTURES WITHOUT CONSENT OF HOLDERS.
rs, the Company and the Trustee, at
may enter into one or more indentures
isfactory to the Trustee, for any of the
f another Person to the Company
uccessor of the covenants of the
ties all as provided in Article
of the Company or other
e Holders of all or any series of
eof or to surrender any right or power
y (and if such covenants are to be for
ies of Securities, stating that such
cluded solely for the benefit of such
of Default with respect to all
tanding hereunder (and if such
to be for the benefit of less than
g that such additional Events of
uded solely for the benefit of such
rovision of this Indenture or to
denture; provided, however, that if
tion shall adversely affect the
rities of any series or Tranche
supplemental indenture in any material
n or addition shall become effective
SUPPLEMENTAL INDENTURES
SECTION 1301. SUPPLEMENTAL INDE
Without the consent of any Holde
any time and from time to time,
supplemental hereto, in form sat
following purposes:
(a) to evidence the succession o
and the assumption by any such s
Company herein and in the Securi
Twelve; or
(b) to add one or more covenants
provisions for the benefit of th
Securities, or any Tranche, ther
herein conferred upon the Compan
the benefit of less than all ser
covenants are expressly being in
series); or
(c) to add any additional Events
or any series of Securities Outs
additional Events of Default are
all series of Securities, statin
Default are expressly being incl
series); or
(d) to change or eliminate any p
add any new provision to this In
such change, elimination or addi
interests of the Holders of Secu
Outstanding on the date of such
respect, such change, eliminatio
with respect to such series or T
ranche only pursuant to the provisions

o Security of such series or Tranche
eral security for the Securities
ms of Securities of any series or
ons 201 and 301; or
ation and delivery of bearer
ing thereto representing interest, if
res for the registration, exchange and
giving of notice to, and the
ent of, the holders thereof, and for
ntal thereto; or
the acceptance of appointment
ssor Trustee with respect to the
and to add to or change any of the
shall be necessary to provide for or
the trusts hereunder by more than one
ments of Section 1011(b); or
\page
s required to permit the Company
-certificated system of registration
e of, the Securities; or
s where (1) the principal of and
f any, on all or any series of
of, shall be payable, (2) all or any
nche thereof, may be surrendered for
of Section 1302 hereof or when n

remains Outstanding; or
(e) to provide additional collat
of any series; or
(f) to establish the form or ter
Tranche as contemplated by Secti
(g) to provide for the authentic
securities and coupons appertain
any, thereon and for the procedu
replacement thereof and for the
solicitation of the vote or cons
any and all other matters incide
(h) to evidence and provide for
hereunder by a separate or succe
Securities of one or more series
provisions of this Indenture as
facilitate the administration of
Trustee, pursuant to the require
75
(i) to provide for the procedure

to utilize, at its option, a non
for all, or any series or Tranch
(j) to change any place or place
premium, if any, and interest, i
Securities, or any Tranche there
series of Securities, or any Tra
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration of transfer, (3) al

l or any series of Securities, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche thereof, may be surrende
red for exchange and (4) notices and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demands to or upon the Company i
n respect of all or any series of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, or any Tranche there
of, and this Indenture may be served;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) to amend and restate this In
denture, as originally executed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and delivered and as it may have
been subsequently amended, in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entirety, but with such addition
s, deletions and other changes as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not adversely affect the i
nterests of the Holders of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities in any material respe
ct; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) to cure any ambiguity, to co
rrect or supplement any provision
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein which may be defective or
inconsistent with any other provision
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, or to make any other cha
nges to the provisions hereof or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql add other provisions with respec
t to matters or questions arising
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Indenture, provided t
hat such other changes or additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not materially adversely a
ffect the interests of the Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series or Tran
che in any material respect; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) in connection with the estab
lishment of the Release Date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 1811, to amend thi
s Indenture to eliminate any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions related to the Lien o
f this Indenture, the Mortgaged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, and Class A Bonds whic
h are no longer applicable, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles Sixteen, Seventeen and
Eighteen.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Without limiting the generality
of the foregoing, if the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act as in effect at th
e Execution Date or at any time thereafter shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be amended and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) if any such amendment shall
require one or more changes to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions hereof or the inclusi
on herein of any additional provisions, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall by operation of law be dee
med to effect such changes or incorporate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such provisions by reference or
otherwise, this Indenture shall be deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to have been amended so as to co

nform to such amendment to the Trust
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Act, and the Company a
nd the Trustee may, without the consent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Holders, enter into an inden
ture supplemental hereto to evidence such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment hereof; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (y) if any such amendment shall
permit one or more changes to, or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elimination of, any provisions h
ereof which, at the Execution Date or at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time thereafter, are require
d by the Trust Indenture Act to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained herein or are containe
d herein to reflect any provision of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trust Indenture Act as in effect
at such date, this Indenture shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to have been amended to e
ffect such changes or elimination, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and the Trustee may, wit
hout the consent of any Holders, enter into
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an indenture supplemental hereto
to this Indenture to effect such changes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or elimination or evidence such
amendment.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1302. SUPPLEMENTAL INDE
NTURES WITH CONSENT OF HOLDERS.
tion 1301, with the consent of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of not less than a major
ity in aggregate principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of all series then Ou
tstanding under this Indenture, considered as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one class, by Act of said Holder
s delivered to the Company and the Trustee, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, when authorized by a Bo
ard Resolution, and the Trustee may enter into
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an indenture or indentures suppl
emental hereto for the purpose of adding any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions to, or changing in an
y manner or eliminating any of the provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, this Indenture; provided, ho
wever, that if there shall be Securities of more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than one series Outstanding here
under and if a proposed supplemental indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall directly affect the rights
of the Holders of Securities of one or more,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but less than all, of such serie
s, then the consent only of the Holders of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority in aggregate principal
amount of the Outstanding Securities of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series so directly affected, con
sidered as one class, shall be required; and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, further, that if the S
ecurities of any series shall have been issued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in more than one Tranche and if
the proposed supplemental indenture shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directly affect the rights of th
e Holders of Securities of one or more, but less
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than all, of such Tranches, then
the consent only of the Holders of a majority
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in aggregate principal amount of
the Outstanding Securities of all Tranches so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directly affected, considered as
one class, shall be required; and provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further, that no such supplement
al indenture shall, without the consent of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of each Outstanding Secur
ity of each series or Tranche so directly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) change the Stated Maturity o
f the principal of, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installment of principal of or i
nterest on, any Security (other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the terms thereof),
or reduce the principal amount thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the rate of interest thereon
(or the amount of any installment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest thereon) or change the
method of calculating such rate or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduce any premium payable upon
the redemption thereof, or reduce the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the principal of a Dis
count Security that would be due and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable upon a declaration of ac
celeration of the Maturity thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 902, or chan
ge the coin or currency (or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property), in which any Security
or any premium or the interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereon is payable, or impair th
e right to institute suit for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement of any such payment
on or after the Stated Maturity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof (or, in the case of rede
mption, on or after the Redemption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date), or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) permit the creation of any L
ien ranking prior to the Lien of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture with respect to m
ore than 10% of the Mortgaged Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or, other than pursuant to Secti
on 1811, terminate the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture on more than 10% of th
e Mortgaged Property or deprive such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of the benefit of the sec
urity of the Lien of this Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) reduce the percentage in pri
ncipal amount of the Outstanding

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any series or any
Tranche thereof, the consent of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of which is required for
any such supplemental indenture, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the consent of the Holders of wh
ich is required for any waiver of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with any provision of
this Indenture or of any default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder and its consequences,
or reduce the requirements of Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1404 for quorum or voting, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) modify any of the provisions
of this Section, Section 706 or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 913 with respect to the
Securities of any series, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranche thereof, except to incre
ase the percentages in principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount referred to in this Secti
on or such other Sections or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide that other provisions of
this Indenture cannot be modified or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waived without the consent of th
e Holder of each Outstanding Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected thereby; provided, howe
ver, that this clause shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to require the consent of
any Holder with respect to changes in
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the references to "the Trustee"
and concomitant changes in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section, or the deletion of this
proviso, in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of Sections 1011(b)
, 1014 and 1301(h).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A supplemental indenture which (
x) changes or eliminates any covenant or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision of this Indenture whic
h has expressly been included solely for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of the Holders of, or wh
ich is to remain in effect only so long as there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be Outstanding, Securities
of one or more particular series, or one or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more Tranches thereof, or (y) mo
difies the rights of the Holders of Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such series or Tranches with
respect to such covenant or other provision,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed not to affect th
e rights under this Indenture of the Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any other series o
r Tranche.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It shall not be necessary for an
y Act of Holders under this Section to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approve the particular form of a
ny proposed supplemental indenture, but it shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be sufficient if such Act shall
approve the substance thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Anything in this Indenture to th
e contrary notwithstanding, if the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer's Certificate, supplemen
tal indenture or Board Resolution, as the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be, establishing the Securit
ies of any series or Tranche shall provide that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company may make certain spe
cified additions, changes or eliminations to or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the Indenture which shall b
e specified in such Officer's Certificate,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indenture or Board
Resolution establishing such series or Tranche,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the Holders of Securities of
such series or Tranche shall be deemed to have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consented to a supplemental inde
nture containing such additions, changes or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminations to or from the Inde
nture which shall be specified in such Officer's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate, supplemental indent
ure or Board Resolution establishing such series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Tranche, (b) no Act of such H
olders shall be required to evidence such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent and (c) such consent may
be counted in the determination of whether or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not the Holders of the requisite
principal amount of Securities shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consented to such supplemental i
ndenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1303. EXECUTION OF SUPP
LEMENTAL INDENTURES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In executing, or accepting the a
dditional trusts created by, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indenture permitted
by this Article or the modifications thereby of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the trusts created by this Inden
ture, the Trustee shall be entitled to receive,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (subject to Section 1001) sh
all be fully protected in relying upon, an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Opinion of Counsel and an Office
r's Certificate stating that the execution of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such supplemental indenture is a
uthorized or permitted by this Indenture and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql containing the statements requir
ed by Section 104. The Trustee may, but shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be obligated to, enter into
any such supplemental indenture which adversely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affects the Trustee's own rights
, duties, immunities or liabilities under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture or otherwise.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1304. EFFECT OF SUPPLEM
ENTAL INDENTURES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the execution of any supple
mental indenture under this Article
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture shall be modified
in accordance therewith, and such supplemental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indenture shall form a part of t
his Indenture for all purposes; and every Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Securities theretofore or the
reafter authenticated and delivered hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be bound thereby. Any supp
lemental indenture permitted by this Article may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restate this Indenture in its en
tirety, and, upon the execution and delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, any such restatement sh
all supersede this Indenture as theretofore in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect for all purposes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the execution and delivery
of the supplemental indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in Section 1811, (a) t
he Lien of this Indenture shall be deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been satisfied and discharg
ed, (b) upon request by the Company, the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall release, quitclaim and oth
erwise turn over to the Company the Mortgaged
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property (other than money and E
ligible Obligations held by the Trustee pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 803), (c) upon reques
t by the Company, the Trustee shall execute and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver to the Company such deed
s and other instruments as, in the judgment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, shall be necessary,
desirable or appropriate to effect or evidence
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such satisfaction, discharge, re
lease and quitclaim and (d) the Company shall,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as promptly as practicable, give
notice to all Holders of such satisfaction and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharge in the same manner as
a notice of redemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1305. CONFORMITY WITH T
RUST INDENTURE ACT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Every supplemental indenture exe
cuted pursuant to this Article shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conform to the requirements of t
he Trust Indenture Act as then in effect.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1306. REFERENCE IN SECU
RITIES TO SUPPLEMENTAL INDENTURES.
Tranche thereof, authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered after the execution of
any supplemental indenture pursuant to this

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article may, and shall if requir
ed by the Trustee, bear a notation in form
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved by the Trustee as to an
y matter provided for in such supplemental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indenture. If the Company shall
so determine, new Securities of any series, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Tranche thereof, so modified
as to conform, in the opinion of the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Company, to any such sup
plemental indenture may be prepared and executed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company, and authenticate
d and delivered by the Trustee in exchange for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding Securities of such s
eries or Tranche.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1307. MODIFICATION WITH
OUT SUPPLEMENTAL INDENTURE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To the extent, if any, that the
terms of any particular series of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities shall have been estab
lished in or pursuant to a Board Resolution or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Officer's Certificate pursuan
t to a supplemental indenture or Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolution as contemplated by Se
ction 301, and not in an indenture supplemental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto, additions to, changes in
or the elimination of any of such terms may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effected by means of a supplemen
tal Board Resolution or Officer's Certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a Board Resolution o
r a supplemental indenture and complying with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the requirements of Section 104,
as the case may be, delivered to, and accepted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by, the Trustee in writing; prov
ided, however, that such supplemental Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolution or Officer's Certific
ate shall not be accepted by the Trustee or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise be effective unless al
l conditions set forth in this Indenture which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would be required to be satisfie
d if such additions, changes or elimination were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in a supplemental inde
nture shall have been appropriately satisfied.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the written acceptance ther
eof by the Trustee, any such supplemental Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolution or Officer's Certific
ate shall be deemed to be effective and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute part of the Indenture
and a supplemental indenture hereunder,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including for purposes of Sectio
n 1816. Such acceptance shall be conveyed by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written instrument signed by a R
esponsible Officer of the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE FOURTEEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MEETINGS OF HOLDERS; ACTION WITH
OUT MEETING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1401. PURPOSES FOR WHIC
H MEETINGS MAY BE CALLED.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A meeting of Holders of Securiti
es of one or more, or all, series, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Tranche or Tranches thereof,
may be called at any time and from time to time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Article to make
, give or take any request, demand,
, consent, waiver or other action provided by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture to be made, given
or taken by Holders of Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series or Tranches.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1402. CALL, NOTICE AND
PLACE OF MEETINGS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Trustee may at any time
call a meeting of Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of one or more, or al
l, series, or any Tranche or Tranches thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any purpose specified in Sec
tion 1401, to be held at such time and at such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql place in the Borough of Manhatta
n, The City of New York, as the Trustee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determine, or, with the approval
of the Company, at any other place. Notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql every such meeting, setting fort
h the time and the place of such meeting and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql general terms the action propose
d to be taken at such meeting, shall be given,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the manner provided in Sectio
n 108, not less than 21 nor more than 180 days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the date fixed for the
meeting.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If the Trustee shall have be
en requested to call a meeting of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of Securities of one or
more, or all, series, or any Tranche or Tranches
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, by the Company or by th
e Holders of 33% in aggregate principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of all of such series and Tranch
es, considered as one class, for any purpose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Section 1301, by wr
itten request setting forth in reasonable detail
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the action proposed to be taken
at the meeting, and the Trustee shall not have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given the notice of such meeting
within 21 days after receipt of such request or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not thereafter proceed to
cause the meeting to be held as provided herein,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then the Company or the Holders
of Securities of such series and Tranches in the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount above specified, as the c
ase may be, may determine the time and the place
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Borough of Manhattan, The
City of New York, or in such other place as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be determined or approved
by the Company, for such meeting and may call
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such meeting for such purposes b
y giving notice thereof as provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection (a) of this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Any meeting of Holders of Se
curities of one or more, or all,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series, or any Tranche or Tranch
es thereof, shall be valid without notice if the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of all Outstanding Secur
ities of such series or Tranches are present in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person or by proxy and if repres
entatives of the Company and the Trustee are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present, or if notice is waived
in writing before or after the meeting by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of all Outstanding Secur
ities of such series, or any Tranche or Tranches
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof or by such of them as ar
e not present at the meeting in person or by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proxy, and by the Company and th
e Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1403. PERSONS ENTITLED
TO VOTE AT MEETINGS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To be entitled to vote at any me
eting of Holders of Securities of one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or more, or all, series, or any
Tranche or Tranches thereof, a Person shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a Holder of one or more Outs
tanding Securities of such series or Tranches,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (b) a Person appointed by an
instrument in writing as proxy for a Holder or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of one or more Outstandi
ng Securities of such series or Tranches by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder or Holders. The only Pers
ons who shall be entitled to attend any meeting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Holders of Securities of any
series or Tranche shall be the Persons entitled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to vote at such meeting and thei
r counsel, any representatives of the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and its counsel and any represen
tatives of the Company and its counsel.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1404. QUORUM; ACTION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Persons entitled to vote a m
ajority in aggregate principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Outstanding Securities of
the series and Tranches with respect to which a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting shall have been called a
s hereinbefore provided, considered as one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql class, shall constitute a quorum
for a meeting of Holders of Securities of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series and Tranches; provided, h

owever, that if any action is to be taken at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such meeting which this Indentur
e expressly provides may be taken by the Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a specified percentage, which
is less than a majority, in principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Outstanding Securities of su
ch series and Tranches, considered as one class,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Persons entitled to vote suc
h specified percentage in principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Outstanding Securities of su
ch series and Tranches, considered as one class,
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall constitute a quorum. In th
e absence of a quorum within one hour of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time appointed for any such meet
ing, the meeting shall, if convened at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request of Holders of Securities
of such series and Tranches, be dissolved. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other case the meeting may b
e adjourned for such period as may be determined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the chairman of the meeting p
rior to the adjournment of such meeting. In the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql absence of a quorum at any such
adjourned meeting, such adjourned meeting may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further adjourned for such perio
d as may be determined by the chairman of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting prior to the adjournment
of such adjourned meeting. Except as provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Section 1405(e), notice of th
e reconvening of any meeting adjourned for more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than 30 days shall be given as p
rovided in Section 1402(a) not less than ten
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days prior to the date on which
the meeting is scheduled to be reconvened.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notice of the reconvening of an
adjourned meeting shall state expressly the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage, as provided above, o
f the principal amount of the Outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of such series and Tr
anches which shall constitute a quorum.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as limited by Section 130
2, any resolution presented to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting or adjourned meeting dul
y reconvened at which a quorum is present as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aforesaid may be adopted only by
the affirmative vote of the Holders of a
amount of the Outstanding Securities of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series and Tranches with respect
to which such meeting shall have been called,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql considered as one class; provide
d, however, that, except as so limited, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resolution with respect to any a
ction which this Indenture expressly provides

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be taken by the Holders of a
specified percentage, which is less than a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority, in principal amount of
the Outstanding Securities of such series and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tranches, considered as one clas
s, may be adopted at a meeting or an adjourned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting duly reconvened and at w
hich a quorum is present as aforesaid by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affirmative vote of the Holders
of such specified percentage in principal amount
such series and Tranches, considered as one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql class.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any resolution passed or decisio
n taken at any meeting of Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities duly held in accordan
ce with this Section shall be binding on all the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of Securities of the ser
ies and Tranches with respect to which such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting shall have been held, wh
ether or not present or represented at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1405. ATTENDANCE AT MEE
TINGS; DETERMINATION OF VOTING RIGHTS; CONDUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND ADJOURNMENT OF MEETINGS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Attendance at meetings of Ho
lders of Securities may be in person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or by proxy; and, to the extent
permitted by law, any such proxy shall remain in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect and be binding upon any f
uture Holder of the Securities with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it was given unless and un
til specifically revoked by the Holder or future
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of such Securities before
being voted.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Notwithstanding any other pr
ovisions of this Indenture, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee may make such reasonable
regulations as it may deem advisable for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting of Holders of Securities
in regard to proof of the holding of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and of the appointmen
t of proxies and in regard to the appointment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and duties of inspectors of vote
s, the submission and examination of proxies,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates and other evidence
of the right to vote, and such other matters
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning the conduct of the me
eting as it shall deem appropriate. Except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise permitted or required
by any such regulations, the holding of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities shall be proved in th
e manner specified in Section 106 and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointment of any proxy shall b
e proved in the manner specified in Section 106.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such regulations may provide tha

t written instruments appointing proxies,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regular on their face, may be pr
esumed valid and genuine without the proof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Section 106 or othe
r proof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Trustee shall, by an ins
trument in writing, appoint a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql temporary chairman of the meetin
g, unless the meeting shall have been called by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company or by Holders as pro
vided in Section 1402(b), in which case the
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or the Holders of Securi
ties of the series and Tranches calling the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting, as the case may be, sha
ll in like manner appoint a temporary chairman.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A permanent chairman and a perma
nent secretary of the meeting shall be elected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by vote of the Persons entitled
to vote a majority in aggregate principal amount
all series and Tranches represented in person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or by proxy at the meeting, cons
idered as one class.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) At any meeting each Holder o
r proxy shall be entitled to one vote
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for each $1,000 principal amount
of Securities held or represented by him;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that no vote
shall be cast or counted at any meeting in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of any Security challeng
ed as not Outstanding and ruled by the chairman
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the meeting to be not Outstan
ding. The chairman of the meeting shall have no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to vote, except as a Holde
r of a Security or proxy.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Any meeting duly called purs
uant to Section 1402 at which a quorum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is present may be adjourned from
time to time by Persons entitled to vote a
amount of the Outstanding Securities of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series and Tranches represented
at the meeting, considered as one class; and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting may be held as so adjour
ned without further notice.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1406. COUNTING VOTES AN
D RECORDING ACTION OF MEETINGS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The vote upon any resolution sub
mitted to any meeting of Holders shall

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be by written ballots on which s
hall be subscribed the signatures of the Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or of their representatives by p
roxy and the principal amounts and serial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql numbers of the Outstanding Secur
ities, of the series and Tranches with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which the meeting shall have
been called, held or represented by them. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permanent chairman of the meetin
g shall appoint two inspectors of votes who
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall count all votes cast at th
e meeting for or against any resolution and who
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall make and file with the sec
retary of the meeting their verified written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reports of all votes cast at the
meeting. A record, in duplicate, of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings of each meeting of H
olders shall be prepared by the secretary of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting and there shall be attac
hed to said record the original reports of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inspectors of votes on any vote
by ballot taken thereat and affidavits by one or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more persons having knowledge of
the facts setting forth a copy of the notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the meeting and showing that sai
d notice was given as provided in Section 1402
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, if applicable, Section 1404
. Each copy shall be signed and verified by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affidavits of the permanent chai
rman and secretary of the meeting and one such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy shall be delivered to the C
ompany, and another to the Trustee to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preserved by the Trustee, the la
tter to have attached thereto the ballots voted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the meeting. Any record so si
gned and verified shall be conclusive evidence
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the matters therein stated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1407. ACTION WITHOUT ME
ETING.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In lieu of a vote of Holders at
a meeting as hereinbefore contemplated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in this Article, any request, de
mand, authorization, direction, notice, consent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver or other action may be ma
de, given or taken by Holders by one or more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written instruments as provided
in Section 106.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE FIFTEEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IMMUNITY OF INCORPORATORS, SHARE
HOLDERS, OFFICERS AND DIRECTORS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1501. LIABILITY SOLELY
CORPORATE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No recourse shall be had for the
payment of the principal of or

any, on any Securities or any part thereof, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any claim based thereon or o
therwise in respect thereof, or of the
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness represented thereby
, or upon any obligation, covenant or agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Indenture, against an
y incorporator, shareholder, member, limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql partner, officer, manager or dir
ector, as such, past, present or future of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or of any predecessor or
successor of the Company (either directly or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through the Company or a predece
ssor or successor of the Company), whether by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql virtue of any constitutional pro
vision, statute or rule of law, or by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement of any assessment or
penalty or otherwise; it being expressly agreed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and understood that this Indentu
re and all the Securities are solely corporate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations, and that no persona
l liability whatsoever shall attach to, or be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurred by, any incorporator, s
hareholder, member, limited partner, officer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manager or director, past, prese
nt or future, of the Company or of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql predecessor or successor of the
Company, either directly or indirectly through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company or any predecessor o
r successor of the Company, because of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness hereby authorized o
r under or by reason of any of the obligations,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants or agreements containe
d in this Indenture or in any of the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to be implied herefrom or the
refrom, and that any such personal liability is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby expressly waived and rele
ased as a condition of, and as part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration for, the execution
of this Indenture and the issuance of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE SIXTEEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISSUANCE OF SECURITIES PRIOR TO
THE RELEASE DATE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1601. GENERAL.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prior to the Release Date, the T
rustee shall authenticate and deliver
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, for original issue,
at one time or from time to time in accordance
to below, only pursuant to Section 1602, 1603,
TIES ON THE BASIS OF CLASS A BONDS.
e series may be authenticated and
n an aggregate principal amount not exceeding,
f Class A Bonds delivered to the Trustee for
ll be authenticated and delivered by
delivery to the Trustee of Class A Bonds which
he basis under any provisions of this Indenture
es upon receipt by the Trustee of:
o the Securities of such series
(or being subject to mandatory
such principal amounts that, at each
s of such series (or the Tranche
and delivered), there shall mature
qual in principal amount to the
nche then to mature and (B)
andatory redemption provisions
Outstanding under the related Class A
ption provisions contained therein
ndatory redemption provisions
f any, for the mandatory redemption
therwise) of the Securities of such
emption thereof at the option of the
\page
with the Company Order referred

1604 or 1605.
SECTION 1602. ISSUANCE OF SECURI
(a) Securities of any one or mor
delivered on the basis of, and i
the aggregate principal amount o
such purpose.
(b) Securities of any series sha
the Trustee on the basis of the
have not theretofore been made t
of one or more Authorized Purpos
(i) The documents with respect t
specified in Section 303;
(ii) Class A Bonds (A) maturing
redemption) on such dates and in
Stated Maturity of the Securitie
thereof then to be authenticated
(or be redeemed) Class A Bonds e
Securities of such series or Tra
containing, in addition to any m
applicable to all Class A Bonds
Mortgage and any mandatory redem
pursuant to clause (A) above, ma
correlative to the provisions, i
(pursuant to a sinking fund or o
series or Tranche or for the red
83
stood that such Class A Bonds (X) may,
may, but need not, contain provisions
e option of the Company, any such
ption price or prices not less than
(Z) shall be held by the Trustee in
n; and
he effect that:
ass A Bonds have been duly
ve been established in conformity
ed Class A Mortgage;
nds have been duly
ve been established in conformity
ed Class A Mortgage; and
been duly executed by the
trustee under the related Class
urities to be authenticated and
livery to the Trustee of such
thenticated and delivered by the
Indenture and issued and
manner and subject to any
nion of Counsel, such Class A
legally binding obligations of
rdance with their terms, subject,
ing to or affecting generally the
reditors' rights, including,
insolvency, reorganization,
er laws affecting the rights and
gees' generally and general
Holder; it being expressly under

but need not, bear interest, (Y)
for the redemption thereof at th
redemption to be made at a redem
the principal amount thereof and
accordance with Article Seventee
(iii) an Opinion of Counsel to t
(1) the form or forms of such Cl
authorized by the Company and ha
with the provisions of the relat
(2) the terms of such Class A Bo
authorized by the Company and ha
with the provisions of the relat
(3) (I) such Class A Bonds have
Company and authenticated by the
A Mortgage and (II) when the Sec
delivered on the basis of the de
Class A Bonds shall have been au
Trustee in accordance with this
delivered by the Company in the
conditions specified in such Opi
Bonds will constitute valid and
the Company, enforceable in acco
as to enforcement, to laws relat
enforcement of mortgagee's and c
without limitation, bankruptcy,
receivership, moratorium and oth
remedies of creditors and mortga
of whether such enforceability
equity as at law) and except as
f may be limited by state laws
forcement of the security
gage; and such Class A Bonds will
e Lien of such Class A Mortgage
er Class A Bonds then Outstanding
ept as to sinking fund or similar
spect to Securities of a series
the Trustee shall be entitled to
only once at or prior to the time of
ivery of such Securities and that, in
n clauses (B) and (C) above, counsel
A Bonds shall have been
he instrument or instruments creating
Bonds are a part, such terms will
Company and will have been
he provisions of the related Class A
Bonds have been duly issued and
henticated and delivered by the
A Mortgage or (2) when such Class A
ted and delivered by the trustee under
accordance with the instrument or
\page
of which such Class A Bonds are a
principles of equity (regardless

is considered in a proceeding in
enforcement of provisions thereo
affecting the remedies of the en
provided for in the Class A Mort
be entitled to the benefit of th
equally and ratably with all oth
under such Class A Mortgage, exc
provisions.
provided, however, that, with re
subject to a Periodic Offering,
receive such Opinion of Counsel
the first authentication and del
lieu of the opinions described i
may opine that:
(X) when the terms of such Class
established in accordance with t
the series of which such Class A
have been duly authorized by the
established in conformity with t
Mortgage; and/or
(Y) (I) either (1) such Class A
delivered by the Company and aut
trustee under the related Class
Bonds shall have been authentica
the related Class A Mortgage in
84
instruments creating the series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part, such Class A Bonds will ha

ve been duly authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered under such Class A Mor
tgage and (II) when such Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have been issued and deliv
ered by the Company in the manner and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to any conditions specif
ied in such Opinion of Counsel, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when the Securities to be authen
ticated and delivered on the basis of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the delivery to the Trustee of s
uch Class A Bonds shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered by t
he Trustee in accordance with this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and issued and deliver
ed by the Company in the manner and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to any conditions specif
ied in such Opinion of Counsel, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Bonds will constitute va
lid obligations of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to the benefit of the L
ien of such Class A Mortgage equally
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and ratably with all other Class
A Bonds then Outstanding under such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Mortgage.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1603. ISSUANCE OF SECUR
ITIES ON THE BASIS OF PROPERTY ADDITIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Securities of any one or mor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered on the basis of Proper
ty Additions which do not constitute Funded
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property in a principal amount n
ot exceeding the balance of the Cost or the Fair
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value to the Company of such Pro
perty Additions (whichever shall be less) after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql making any deductions and any ad
ditions pursuant to Section 103(b).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Securities of any series sha
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee on the basis of Prop
erty Additions upon receipt by the Trustee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the documents with respect t
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Section 303;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an Expert's Certificate dat
ed as of a date not more than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ninety (90) days prior to the da
te of the Company Order referring to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) describing the property desi
gnated by the Company, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its discretion, to be made the b
asis of the authentication and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of such Securities (suc
h description of property to be
on of the Company, either to
ements of property or portions
ar basis, or to properties
or subaccounts in the Company's
reof, on a Dollar basis), and
y;
ty constitutes Property
dditions are desirable for
ss, or one of the businesses, of
dditions, to the extent of
mpany thereof (whichever is less)
entication and delivery of such
nded Property;
ty Additions acquired, made
e delivery of securities or other
h forming all or part of the Cost
n an amount to be stated therein;
pect to any Property
tructed in whole or in part
es or other property, the
\page
delivered and stating the date of
f such Property Additions
made by reference, at the electi

specified items, units and/or el
thereof, on a percentage or Doll
reflected in specified accounts
books of account or portions the
stating the Cost of such propert
(2) stating that all such proper
Additions;
(3) stating that such Property A
use in the conduct of the busine
the Company;
(4) stating that such Property A
the Cost or Fair Value to the Co
to be made the basis of the auth
Securities, do not constitute Fu
(5) stating, except as to Proper
or constructed wholly through th
property, that the amount of cas
thereof was equal to or more tha
(6) briefly describing, with res
Additions acquired, made or cons
through the delivery of securiti
85
securities or other property so

such delivery;
(7) stating what part, if any, o
ix months prior to the date of
ny had been used or operated by
iness similar to that in which it
rated by the Company and stating
of the signers, the Fair Value of
ompany, as of the date of such
-five Thousand Dollars ($25,000)
ue is less than one percent (1%)
t of Securities then Outstanding;
the signers, the Fair Value
f such certificate, of such
hereof with respect to the Fair
statement is to be made in an
pursuant to clause (iii) below;
to be deducted under Section
d to be added under Section
Property retired by the Company;
such Property Additions is
er described (I) in clause (f) of
s, stating that such Lien does
ers, materially impair the use by
perty considered as a whole for
d by the Company, or (II) in
of Permitted Liens, stating that
ent of the signers, materially
such property for the purposes
any or (III) in clause (p)(ii) of
s, stating that the enforcement
includes property which within s

acquisition thereof by the Compa
others than the Company in a bus
has been or is to be used or ope
whether or not, in the judgment
such Property Additions to the C
certificate, is less than Twenty
and whether or not such Fair Val
of the aggregate principal amoun
(8) stating, in the judgment of
to the Company, as of the date o
Property Additions, except any t
Value to the Company of which a
Independent Expert's Certificate
(9) stating the amount required
103(b)(i) and the amounts electe
103(b)(ii) in respect of Funded
(10) if any property included in
subject to a Lien of the charact
the definition of Permitted Lien
not, in the judgment of the sign
the Company of the Mortgaged Pro
the purposes for which it is hel
clause (i)(ii) of the definition
such Lien does not, in the judgm
impair the use by the Company of
for which it is held by the Comp
the definition of Permitted Lien
of such Lien would not, in the j
udgment of the signers, adversely

any in such property in any
st or the Fair Value to the
ns, after the deductions
specified in such Expert's
10)(I) above;
ipal amount of the
nd delivered on the basis of such
not to exceed the amount stated
ions are shown by the Expert's
se (ii) above to include property
o the date of acquisition thereof by
erated by others than the Company in a
h it has been or is to be used or
certificate does not show the Fair
of the date of such certificate, to
d Dollars ($25,000) or less than one
incipal amount of Securities then
rt's Certificate stating, in the
Value to the Company, as of the date
tificate, of (X) such Property
\page
d or operated and (at the option of
perty Additions included in the
r in clause (ii) above and (Y) in case
icate is being delivered in connection
affect the interests of the Comp

material respect;
(11) stating the lower of the Co
Company of such Property Additio
therefrom and additions thereto
Certificate pursuant to clause (
(12) stating the aggregate princ
Securities to be authenticated a
Property Additions (such amount
pursuant to clause (11) above);
(iii) in case any Property Addit
Certificate provided for in clau
which, within six months prior t
the Company, had been used or op
business similar to that in whic
operated by the Company and such
Value thereof to the Company, as
be less than Twenty-five Thousan
percent (1%) of the aggregate pr
Outstanding, an Independent Expe
judgment of the signer, the Fair
of such Independent Expert's Cer
86
Additions which have been so use

the Company) as to any other Pro
Expert's Certificate provided fo
such Independent Expert's Certif
very of Securities, any property so
subjected to the Lien of this
of the then current calendar year as
and delivery of Securities and as to
rtificate has not previously been
ons are shown by the Expert's
se (ii) above to have been acquired,
in part through the delivery of
Expert's Certificate stating, in the
r market value in cash of such
the time of delivery thereof in
on of such Property Additions;
effect that:
or, upon the delivery of,
ng in the proper places and
nveyance, assignment or transfer,
n, will constitute, a Lien on all
e the basis of the authentication
subject to no Lien thereon prior
cept Permitted Liens listed in
of the definition of Permitted
not subject to the Lien of
thority to operate such
f conveyance, assignment and
he Opinion of Counsel provided for in
with the authentication and deli

used or operated which has been
Indenture since the commencement
the basis for the authentication
which an Independent Expert's Ce
furnished to the Trustee;
(iv) in case any Property Additi
Certificate provided for in clau
made or constructed in whole or
securities or other property, an
judgment of the signers, the fai
securities or other property at
payment for or for the acquisiti
(v) an Opinion of Counsel to the
(1) this Indenture constitutes,
and/or the filing and/or recordi
manner of, the instruments of co
if any, specified in said opinio
the Property Additions to be mad
and delivery of such Securities,
to the Lien of this Indenture ex
clauses (c) through (s) and (u)
Liens;
(2) such Property Additions are
any Class A Mortgage; and
(3) the Company has corporate au
Property Additions; and
(vi) copies of the instruments o
transfer, if any, specified in t
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (v) above.

ITIES ON THE BASIS OF RETIRED SECURITIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Subject to the provisions of
subsection (c) of this Section,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of any one or more se
ries may be authenticated and delivered on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis of, and in an aggregate pr
incipal amount not exceeding the aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of, Retired Sec
urities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee on the basis of Reti
red Securities upon receipt by the Trustee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the documents with respect t
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Section 303; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an Officer's Certificate st
ating that Retired Securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified by series, in an aggre
gate principal amount not less than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the aggregate principal amount o
f Securities to be authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered, have theretofore been
authenticated and delivered and, as
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the date of such Officer's Ce
rtificate, constitute Retired
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and are the basis for
the authentication and delivery of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) No Securities shall be authe
nticated or delivered hereunder on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis of any Retired Securities
theretofore authenticated and delivered on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis of Class A Bonds pursuant
to Section 1602 until the Class A Mortgage under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such Class A Bonds were de
livered has been discharged pursuant to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions thereof.
ITIES ON THE BASIS OF DEPOSIT OF CASH.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Securities of any one or mor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered on the basis of, and i
n an aggregate principal not exceeding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of, any cash deposited wi

th the Trustee for such purpose.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee on the basis of the
deposit of cash when the Trustee shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received, in addition to such de
posit, the documents with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of such series specif
ied in Section 303.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) All cash deposited with the
Trustee under the provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section, and all cash required b
y Section 1702(a) to be applied in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the provisions of this Sect
ion, shall be held by the Trustee as a part of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Mortgaged Property and may b
e withdrawn from time to time by the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon application of the Company
to the Trustee, in an amount equal to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount of Se
curities to the authentication and delivery of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Company shall be entit
led under any of the provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture by virtue of complianc
e with all applicable provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture (except as hereinafter
in this subsection (c) otherwise provided).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon any such application for wi
thdrawal, the Company shall comply
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with all applicable provisions o
f this Article relating to the authentication
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and delivery of Securities excep
t that the Company shall not in any event be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to deliver the document
s specified in Section 303; provided, however,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that (i) such withdrawal shall n
ot be made on the basis of the delivery of Class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Bonds pursuant to Section 1602
unless an equal principal amount of Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which were authenticated and del
ivered pursuant to this Section on the basis of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the deposit of the cash then to
be withdrawn (or Securities authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered, directly or indirectl
y, on the basis of the retirement of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities) remain Outstanding a
nd (ii) if such withdrawal is to be made on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis, the requirements of Secti
on 1602(b)(ii) with respect to such Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds shall be determined by ref
erence to such Securities which remain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any withdrawal of cash under thi
s subsection (c) shall operate as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver by the Company of its rig
ht to the authentication and delivery of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities on which it is based
and such Securities may not thereafter be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered here
under. Any Property Additions which have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made the basis of any such right
to the authentication and delivery of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities so waived shall be de
emed to have been made the basis of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawal of such cash; any Ret
ired Securities which have been made the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any such right to the authent
ication and delivery of Securities so waived
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to have been mad
e the basis of the withdrawal of such cash; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Class A Bonds which have bee
n made the basis of any such right to the
ecurities so waived shall be deemed to have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made the basis of the authentica
tion and delivery of the Securities which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql initially had been authenticated
and delivered pursuant to this Section on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis of the deposit of the cash
so withdrawn (or Securities initially
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered, dir
ectly or indirectly, on the basis of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retirement of such Securities) w
hich remain Outstanding.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) If at any time the Company s
hall so direct, any sums deposited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Trustee under the provi
sions of this Section may be used or applied to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the purchase, payment or redempt
ion of Securities in the manner and subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the conditions provided in claus
es (d) and (e) of Section 1806.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE SEVENTEEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CLASS A BONDS; ADDITIONAL CLASS
A MORTGAGES; DISCHARGE OF CLASS A MORTGAGE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1701. REGISTRATION AND
OWNERSHIP OF CLASS A BONDS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Bonds delivered to the T
rustee pursuant to Section 1602 shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be registered in the name of the
Trustee or its nominee and shall be owned and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by the Trustee, subject to
the provisions of this Indenture, for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of the Holders of all Se
curities from time to time Outstanding, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall have no interest t

herein. The Trustee shall be entitled to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise all rights of securityh
olders under each Class A Mortgage either in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion or as otherwise provi
ded in this Article or in Article Nine.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If, notwithstanding the intentio
n of the parties expressed in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1701, it shall be finall
y determined by an appropriate court that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company has any interest in the
Class A Bonds held by the Trustee pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture, the Company here
by, to the extent permitted by law, grants to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee, for the benefit of
the Holders of all Securities from time to time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding, a security interest
in such interest of the Company in such Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1702. PAYMENTS ON CLASS
A BONDS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any payment by the Company o
f principal of or premium or interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on any Class A Bonds delivered t
o and held by the Trustee pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 1602 and 1701 shall be
applied by the Trustee to the payment of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal, premium or interest,
as the case may be, in respect of the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is then due, and, to the e
xtent of such application, the obligation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company hereunder to make such p
ayment in respect of the Securities shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to have been satisfied an
d discharged.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If, at the time of any such paym
ent of principal of Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to and held by the Tru
stee pursuant to Sections 1602 and 1701, there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be no principal then due i
n respect of the Securities, such payment in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of such Class A Bonds sh
all be deemed to constitute Funded Cash and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be held by the Trustee as
part of the Mortgaged Property, to be withdrawn,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used or applied in the manner, t
o the extent and for the purposes, and subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the conditions, provided in S
ection 1605(c); and thereafter the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authenticated and delivered on t
he basis of such Class A Bonds shall, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent of such payment of princi
pal, be deemed to have been authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered on the basis of the de
posit of cash.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If, at the time of any such paym

ent of premium or interest on Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds delivered to and held by t
he Trustee pursuant to Sections 1602 and 1701,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql there shall be no premium or int
erest, as the case may be, then due in respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Securities, such payment
in respect of such Class A Bonds shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remitted to the Company upon rec
eipt by the Trustee of a Company Order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requesting the same, together wi
th an Officer's Certificate stating that no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event of Default has occurred an
d is continuing; provided, however, that, if an
rred and be continuing, such proceeds shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held as part of the Mortgaged Pr
operty until such Event of Default shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been cured or waived.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Any payment by the Company h
ereunder of principal of or premium or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on Securities which sha
ll have been authenticated and delivered upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the basis of the delivery to the
Trustee of Class A Bonds (other than by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application of the proceeds of a
payment in respect of such Class A Bonds)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall, to the extent thereof, be
deemed, for all purposes of this Indenture, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfy and discharge the obliga
tion of the Company, if any, to make a payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of principal, premium or interes
t, as the case may be, in respect of such Class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Bonds which is then due.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Trustee hereby waives no
tice of any redemption of Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds delivered to it pursuant t
o Section 1602.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1703. SURRENDER OF CLAS
S A BONDS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At the time any Securities which
shall have been authenticated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered on the basis of the de
livery to the Trustee of Class A Bonds cease to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be Outstanding (other than as a
result of the application of the proceeds of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment or redemption of such Cl
ass A Bonds), the Trustee shall surrender to, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the order of, the Company a
n equal principal amount of such Class A Bonds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that the principal
of, and interest and premium, if any, on any

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Bond, or portion thereof
, has been paid, the Trustee shall promptly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrender such Class A Bond, or
such portion, to or to the order of the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for cancellation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1704. NO TRANSFER OF CL
ASS A BONDS.
e contrary notwithstanding, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall not sell, assign o
r otherwise transfer any Class A Bonds delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to and held by it pursuant to Se
ctions 1602 and 1701 except to a successor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trustee under this Indenture and
except as provided in Section 1703. The Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may take such actions as it shal
l deem necessary, desirable or appropriate to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect compliance with such rest
rictions on transfer, including the placing of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legend on each such Class A Bond
and the issuance of stop-transfer instructions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the trustee under the related
Class A Mortgage or any other transfer agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1705. VOTING OF CLASS A
BONDS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee shall, as the owner
and holder of Class A Bonds delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to and held by it pursuant to th
is Indenture, attend such meeting or meetings of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bondholders under each Class A M
ortgage or, at its option, deliver its proxy in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection therewith, as relate
to matters with respect to which it, as such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder, is entitled to vote or c
onsent. So long as no Event of Default hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have occurred and be conti
nuing, either at any such meeting or meetings,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or otherwise when the consent of
the holders of the Class A Bonds Outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under any Class A Mortgage is so
ught without a meeting, the Trustee shall vote
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as holder of Class A Bonds Outst
anding under such Class A Mortgage, or shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent with respect thereto, as
follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the Trustee shall vote all s
uch Class A Bonds, or shall consent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect thereto, (i) in fav
or of any or all amendments or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modifications of such Class A Mo
rtgage of substantially the same tenor and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect as any or all of those se
t forth in Exhibit B to this Indenture
dment or modification of such Class A
ision thereof in all material respects to
s Indenture, (B) to add thereto any
d therein which conforms in all material
d in this Indenture and/or (C) to delete
\page
to which this Indenture contains no
i) any combination of amendments and/or
es (i) and (ii) above; and/or
endments or modifications of such
all vote all such Class A Bonds, or shall
oportionately with the vote or consent of
Bonds Outstanding under such Class A
e eligible to vote or consent, as indicated
icate delivered to the Trustee; provided,
not so vote in favor of, or so consent to,
a Class A Mortgage which, if it were an
s Indenture, would require the consent of
ed in the manner prescribed in Section
of those Holders of Securities which would
302 for such an amendment or modification
dition to the Trustee voting or giving consent
), the Trustee shall have received an Officer's
unsel stating that in the opinion of such
s authorized or permitted by said subsections.
LASS A BONDHOLDER'S CERTIFICATE" means
and/or (ii) in favor of any amen

Mortgage (A) to conform any prov
the correlative provision of thi
provision not otherwise containe
respects to a provision containe
90
therefrom any provision thereof

correlative provision and/or (ii
modifications described in claus
(b) with respect to any other am
Class A Mortgage, the Trustee sh
consent with respect thereto, pr
the holders of all other Class A
Mortgage the holders of which ar
in a Class A Bondholder's Certif
however, that the Trustee shall
any amendment or modification of
amendment or modification of thi
any Holders of Securities obtain
1302, without the prior consent
be required under said Section 1
of this Indenture;
provided, however, that as a con
under Sections 1705(a) and/or (b
Certificate and an Opinion of Co
signers said voting or consent i
For purposes of this Section, "C
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a certificate signed by the temp

orary chairman, the temporary secretary, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permanent chairman, the permanen
t secretary, or an inspector of votes at any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting or meetings of bondholde
rs under a Class A Mortgage, or by the trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under such Class A Mortgage in t
he case of consents of such bondholders which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are sought without a meeting, wh
ich states what the signer thereof reasonably
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql believes will be the proportiona
te votes or consents of the holders of all Class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Bonds (other than the Class A
Bonds delivered to and held by the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Sections 1602 and 17
01) outstanding under such Class A Mortgage and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counted for the purposes of dete
rmining whether such bondholders have approved
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or consented to the matter put b
efore them.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1706. DESIGNATION OF AD
DITIONAL CLASS A MORTGAGES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) In the event that, after the
Execution Date, a corporation which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was the mortgagor under a mortga
ge, deed of trust or similar indenture shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have merged into or consolidated
with the Company, or shall have conveyed or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise transferred property t
o the Company subject to the Lien of such a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mortgage, deed of trust or simil
ar indenture and the Company shall have duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assumed and agreed to perform an
d pay all the obligations of the mortgagor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder, such mortgage, deed
of trust or similar indenture may be designated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company an additional Cla
ss A Mortgage upon delivery to the Trustee of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) a Company Order authorizing
the designation of such mortgage,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deed of trust or similar indentu
re as an additional Class A Mortgage;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an Officer's Certificate (A
) stating that no event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql default has occurred and is cont
inuing which entitles the trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under such mortgage, deed of tru
st or similar indenture to accelerate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the maturity of the obligations
outstanding thereunder, (B) reciting
f obligations theretofore issued under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such mortgage, deed of trust or
similar indenture and the aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of obligations
then outstanding thereunder and

terms of such mortgage, deed of trust
effect, do not permit the issuance of
basis of property additions in a
\page
alance of the cost or fair value of
ssuer thereof (whichever shall be
d additions similar to those provided
e event that the statements contained
de, stating that the Company has
ortgage, deed of trust or similar
principal amount equal to the excess
mount of obligations then outstanding
st or similar indenture which were
additions or on the basis of the
were issued (whether directly or
ght of the successive issuance and
e basis of property additions over (y)
Dollar amount of property additions
ssuance of such obligations then
s of property additions, in a
alance of the Cost or Fair Value to
hall be less) after making deductions
rovided for in Section 103; and
Counsel to the effect that
mortgagor under such mortgage, deed
s been duly and lawfully merged into
(C) either (1) stating that the

or similar indenture, as then in
obligations thereunder upon the
91
principal amount exceeding the b

such property additions to the i
less) after making deductions an
for in Section 103, or (2) in th
in clause (1) above cannot be ma
irrevocably waived its right to
further obligations under such m
indenture (I) on any basis, in a
of (x) the aggregate principal a
under such mortgage, deed of tru
issued on the basis of property
retirement of obligations which
indirectly when considered in li
retirement of obligations) on th
an amount equal to the aggregate
certified as the basis for the i
outstanding and (II) on the basi
principal amount exceeding the b
the Company thereof (whichever s
and additions similar to those p
(iii) an Opinion or Opinions of
(A) the corporation that was the
of trust or similar indenture ha
or has duly and lawfully conveyed or
o the Company; (B) if required by
eed of trust or similar indenture is
ure Act; (C) the Company has duly
d pay the obligations of the mortgagor
st or similar indenture; (D) such
ar indenture constitutes a Lien upon
ubject to no Lien prior thereto except
of Permitted Liens (other than the
); (E) this Indenture constitutes, or,
filing and/or the recording in the
instruments of conveyance, assignment
n such opinion, will constitute, a
n such mortgage, deed of trust or
ally of the character described, and
ed, in the Granting Clauses of this
by the Company from such corporation
idation, conveyance or other transfer,
to the Lien of this Indenture except
of trust or similar indenture and
f such mortgage, deed of trust or
fect, do not permit the further
er except on the basis of property
cter of Property Additions, the
ding obligations, the deposit of prior
of cash; (G) either (1) the terms of
similar indenture, as then in effect,
ce of obligations thereunder upon the
principal amount exceeding the
Value to the Company thereof
or consolidated with the Company

otherwise transferred property t
applicable law, such mortgage, d
qualified under the Trust Indent
assumed and agreed to perform an
under such mortgage, deed of tru
mortgage, deed of trust or simil
the property described therein s
Liens generally of the character
Lien of another Class A Mortgage
upon the delivery of, and/or the
proper places and manner of, the
or transfer, if any, specified i
Lien on the property described i
similar indenture which is gener
is located in the States specifi
Indenture and which was acquired
by virtue of such merger, consol
subject to no Lien thereon prior
the Lien of such mortgage, deed
Permitted Liens; (F) the terms o
similar indenture, as then in ef
issuance of obligations thereund
additions generally of the chara
retirement or deposit of outstan
Lien obligations or the deposit
such mortgage, deed of trust or
do not permit the further issuan
basis of property additions in a
balance of the Cost or the Fair
making deductions and additions
Section 103, or, if such is not the
mplated by clause (ii)(C)(2) above
case of a conveyance or other transfer
ct to the Lien of such mortgage, deed
o Person (other than the Company) has
igations secured by, or to obtain the
n of, such mortgage, deed of trust or
ndenture supplemental hereto referred
\page
b) of this Section complies with the
and the indenture supplemental to
similar indenture referred to in
this Section complies with the
.
have been executed and delivered and
reto (A) in which such mortgage,
re has been designated as an
(B) by which the Company has
this Indenture upon properties of the
in the States specified, in the
re which shall have been acquired by
n by virtue of the merger,
er transfer (and later improvements,
and renewals and replacements
ion 1205(b) and
(whichever shall be less) after

similar to those provided for in
case, (2) that the waivers conte
have been duly made; (H) in the
to the Company of property subje
of trust or similar indenture, n
the right to issue or redeem obl
release of property from the Lie
similar indenture; and (I) the i
92
to in clause (i) of subsection (

requirements of said clause (i),
such mortgage, deed of trust or
clause (ii) of subsection (b) of
requirements of said clause (ii)
(b) At such time as there shall
properly recorded and filed:
(i) an indenture supplemental he
deed of trust or similar indentu
additional Class A Mortgage and
specifically imposed the Lien of
character described, and located
Granting Clauses of this Indentu
the Company from such corporatio
consolidation, conveyance or oth
extensions and additions thereto
thereof) as contemplated by Sect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an indenture supplemental t

o such mortgage, deed of trust or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar indenture by which such
mortgage, deed of trust or similar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indenture has been amended to pr
ovide that, so long as the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall hold any obligations outst
anding thereunder which were delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee as the basis for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities which remain Outstand
ing hereunder, an Event of Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder shall constitute a mat
ured event of default thereunder;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that the waiv
er or cure of such Event of Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder and the rescission and
annulment of the consequences thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall constitute a cure of the c
orresponding event of default under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such mortgage, deed of trust or
similar indenture and a rescission and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annulment of the consequences th
ereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then such mortgage, deed of trus
t or similar indenture and all obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued and outstanding thereunde
r shall for all purposes hereof be treated as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Mortgage and as Class A
Bonds, respectively, to the full and same extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as if specifically identified in
Article One.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1707. DISCHARGE OF CLAS
S A MORTGAGE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee shall surrender for
cancellation to the trustee under any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Mortgage all Class A Bon
ds delivered to and then held by it pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 1602 and 1701 which wer
e delivered under such Class A Mortgage upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt by the Trustee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a Company Order requesting s
uch surrender for cancellation of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Bonds;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) an Officer's Certificate sta
ting that no Event of Default has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred and is continuing, and
that no Class A Bonds are Outstanding under such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Mortgage other than Clas
s A Bonds delivered to and held by the Trustee
01 and that promptly upon such surrender such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class A Mortgage will be satisfi
ed and discharged pursuant to the terms thereof;
tituting Property Additions
s discretion, to be deemed, on and
for cancellation and for all purposes
Property, such Property Additions to
\page
or as to Property Additions of which
ecified pursuant to subclause (viii)
the Cost thereof, then such Fair
than ten-sevenths (10/7) of the
curities which shall have been
r Section 1602 on the basis of Class A
d under such Class A Mortgage and
in Outstanding or constitute Retired
property to be made by reference, at
her to specified items, units and/or
thereof, on a percentage or Dollar
ons thereof reflected in specified
ompany's books of account, on a Dollar
such property;
rty constitutes Property
Additions are desirable for use
or one of the businesses, of the
Additions, to the extent of the
s of which the Fair Value to the
(c) an Expert's Certificate

(i) describing the property cons
designated by the Company, in it
after the date of such surrender
of this Indenture, to be Funded
93
have, in the aggregate, a Cost (

the Fair Value to the Company sp
or clause (d) below is less than
Value in lieu of Cost) not less
aggregate principal amount of Se
authenticated and delivered unde
Bonds authenticated and delivere
which, at such date, either rema
Securities (such description of
the election of the Company, eit
elements of property or portions
basis, or to properties or porti
accounts or subaccounts in the C
basis), and stating the Cost of
(ii) stating that all such prope
Additions;
(iii) stating that such Property
in the conduct of the business,
Company;
(iv) stating that such Property
Cost (or as to Property Addition
Company specified pursuant to su
bclause (viii) or clause (d) below is

such Fair Value in lieu of Cost)
d Property pursuant to this Section,
y;
ty Additions acquired, made or
elivery of securities or other
h forming all or part of the Cost
n an amount to be stated therein;
spect to any Property Additions
whole or in part through the delivery
the securities or other property so
f such delivery;
of such Property Additions
ix (6) months prior to the date of
ny had been used or operated by others
imilar to that in which it has been or
Company and stating whether or not,
the Fair Value to the Company thereof,
te, is less than Twenty-five Thousand
not the Fair Value to the Company
s than one percent (1%) of the
curities then Outstanding;
of the signers, the Fair Value to
uch certificate, of such Property
th respect to which a statement of the
be made in an Independent Expert's
d) below; provided, however, that if
l have theretofore been certified to
less than the Cost thereof, then

thereof to be deemed to be Funde
do not constitute Funded Propert
(v) stating, except as to Proper
constructed wholly through the d
property, that the amount of cas
thereof was equal to or more tha
(vi) briefly describing, with re
acquired, made or constructed in
of securities or other property,
delivered and stating the date o
(vii) stating what part, if any,
included property which within s
than the Company in a business s
is to be used or operated by the
in the judgment of the signers,
as of the date of such certifica
Dollars ($25,000) and whether or
thereof, as of such date, is les
aggregate principal amount of Se
(viii) stating, in the judgment
the Company, as of the date of s
Additions, except any thereof wi
Fair Value to the Company is to
Certificate pursuant to clause (
any such Property Additions shal
the trustee under such Class A M
ortgage in connection with the

lass A Bonds thereunder, the release
ash or the satisfaction of the
rovement, maintenance, replacement or
\page
ion, then there may be stated, in lieu
of such Property Additions as of the
ir Value to the Company thereof as so
uch Class A Mortgage; it being
make allocations on a pro-rata or
ses of determining whether or not,
such Property Additions shall have
the trustee under a Class A Mortgage;
such Property Additions is
er described (I) in clause (f) of the
tating that such Lien does not, in the
lly impair the use by the Company of
d as a whole, or (II) in
of Permitted Liens, stating that such
f the signers, materially impair the
rty for the purposes for which it is
clause (p)(ii) of the definition of
e enforcement of such Lien would not,
adversely affect the interests of the
material respect;
t or the Fair Value to the
ns, as required to be stated in such
authentication and delivery of C

of property, the withdrawal of c
requirements of any sinking, imp
94
similar fund or analogous provis

of the Fair Value to the Company
date of such certificate, the Fa
certified to the trustee under s
understood that the Company may
other reasonable basis for purpo
and/or the extent to which, any
theretofore been so certified to
and
(ix) if any property included in
subject to a Lien of the charact
definition of Permitted Liens, s
judgment of the signers, materia
the Mortgaged Property considere
clause (i)(ii) of the definition
Lien does not, in the judgment o
use by the Company of such prope
held by the Company or (III) in
Permitted Liens, stating that th
in the judgment of the signers,
Company in such property in any
(x) stating the lower of the Cos
Company of such Property Additio
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expert's Certificate pursuant to

clauses (i) and (viii) above,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (xi) stating the aggregate princ
ipal amount of the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in clause (i) above
(such amount not to exceed the amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stated pursuant to clause (x) ab
ove);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) in case any Property Additio
ns are shown by the Expert's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate provided for in clau
se (c) above to include property which, within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six months prior to the date of
acquisition thereof by the Company, had been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used or operated by others than
the Company in a business similar to that in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it has been or is to be us
ed or operated by the Company and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate does not show the Fa
ir Value to the Company thereof, as of the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such certificate, to be less
than Twenty-five Thousand Dollars ($25,000) or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than one percent (1%) of th
e aggregate principal amount of Securities then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding, an Independent Expe
rt's Certificate stating, in the judgment of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql signer, the Fair Value to the Co
mpany, as of the date of such Independent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expert's Certificate, of (x) suc
h Property Additions which have been so used or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operated and (at the option of t
he Company) as to any other Property Additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in the Expert's Certifi
cate provided for in clause (c) above and (y)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any property so used or operated
which has been subjected to the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture since the commencement
of the then current calendar year as the basis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the authentication and deliv
ery of Securities and as to which an Independent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expert's Certificate has not pre
viously been furnished to the Trustee;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) in case any Property Additio
ns are shown by the Expert's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate provided for in clau
se (c) above to have been acquired, made or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constructed in whole or in part
through the delivery of securities or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property, an Expert's Certificat
e stating, in the judgment of the signers, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair market value in cash of suc
h securities or other property at the time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery thereof in payment for
or for the acquisition of such Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Additions;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) an Opinion of Counsel to the

effect that:
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) this Indenture constitutes,
or, upon (x) the satisfaction and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharge of such Class A Mortga
ge and/or (y) the delivery of, and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the filing and/or recording in t
he proper places and manner of, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments of conveyance, assig
nment or transfer, if any, specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in said opinion, will constitute
, a Lien on all the Property Additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be deemed to be Funded Proper
ty in accordance with this Section,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to no Lien thereon prior
to the Lien of this Indenture except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Permitted Liens; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the Company has corporate a
uthority to operate such Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Additions;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) an Opinion of Counsel to the
effect that upon satisfaction and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharge of such Class A Mortga
ge the Lien of this Indenture on the property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formerly subject to the Lien of
such Class A Mortgage, to the extent the same is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part of the Mortgaged Property,
will be subject to no Lien prior to the Lien of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture, except Permitted
Liens; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) copies of the instruments of
conveyance, assignment and transfer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, specified in the Opinion
of Counsel provided for in clause (f) above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE EIGHTEEN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql POSSESSION, USE AND RELEASE OF M
ORTGAGED PROPERTY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1801. QUIET ENJOYMENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless one or more Events of Def
ault shall have occurred and be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing, the Company shall be
permitted to possess, use and enjoy the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property (except, to t
he extent not herein otherwise provided, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash and securities as are expre
ssly required to be deposited with the Trustee).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1802. DISPOSITIONS WITH

OUT RELEASE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless an Event of Default shall
have occurred and be continuing, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may at any time and from
time to time, without any release or consent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by, or report to, the Trustee:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) sell or otherwise dispose of
, free from the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, any machinery, equipm
ent, apparatus, towers, transformers, poles,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lines, cables, conduits, ducts,
conductors, meters, regulators, holders, tanks,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retorts, purifiers, odorizers, s
crubbers, compressors, valves, pumps, mains,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pipes, service pipes, fittings,
connections, services, tools, implements, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other fixtures or personalty, th
en subject to the Lien hereof, which shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become old, inadequate, obsolete
, worn out, unfit, unadapted, unserviceable,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undesirable or unnecessary for u
se in the operations of the Company upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacing the same by, or substi
tuting for the same, similar or analogous
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property, or other property perf
orming a similar or analogous function or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise obviating the need the
refor, having a Fair Value to the Company at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least equal to that of the prope
rty sold or otherwise disposed of and subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lien hereof, subject to no L
iens prior hereto except Permitted Liens and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Liens to which the propert
y sold or otherwise disposed of was subject;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) cancel or make changes or al
terations in or substitutions for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all easements, servitudes, r
ights-of-way and similar rights and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests; and
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) grant, free from the Lien of
this Indenture, easements, ground
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql leases or rights-of-way in, upon
, over and/or across the property or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights-of-way of the Company for
the purpose of roads, pipe lines, transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lines, distribution lines, commu
nication lines, railways, removal or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transportation of coal, lignite,
gas, oil or other minerals or timber, and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql like purposes, or for the joint
or common use of real property, rights-of-way,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities and/or equipment; pro
vided, however, that such grant shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially impair the use of the
property or rights-of-way for the purposes for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such property or rights-of
-way are held by the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1803. RELEASE OF MORTGA
GED PROPERTY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may obtain the release o
f any part of the Mortgaged Property, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest therein, other than Fun
ded Cash held by the Trustee, and the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall release all its right, tit
le and interest in and to the same from the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, upon receipt by the Trus
tee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a Company Order requesting t
he release of such property and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitting therewith a form of
instrument or instruments to effect such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql release;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) an Officer's Certificate sta
ting that, to the knowledge of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql signer, no Event of Default has
occurred and is continuing;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) an Expert's Certificate made
and dated not more than ninety (90)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days prior to the date of such C
ompany Order:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) describing the property to b
e released;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) stating the Fair Value, in
the judgment of the signers, of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the property to be released;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) stating the Cost of the pr
operty to be released (or, if the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fair Value to the Company of suc
h property at the time the same became
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Property was certified to
be an amount less than the Cost
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, then such Fair Value, a
s so certified, in lieu of Cost); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) stating that, in the judgme
nt of the signers, such release
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not impair the security und
er this Indenture in contravention of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions hereof;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) an amount in cash to be held

by the Trustee as part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property, equal to the
amount, if any, by which the amount referred to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in clause (c)(iii) above exceeds
the aggregate of the following items:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) an amount equal to the aggre
gate principal amount of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations secured by Purchase
Money Lien delivered to the Trustee,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be held as part of the Mortga
ged Property, subject to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitations hereafter in this Se
ction set forth;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an amount equal to the Cost
or Fair Value to the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (whichever is less), after makin
g any deductions and any additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 103, of any
Property Additions not constituting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Property described in an
Expert's Certificate, dated not more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than ninety (90) days prior to t
he date of the Company Order
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requesting such release and comp
lying with clause (ii) and, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent applicable, clause (iii)
in Section 1603(b), delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee; provided, however, that
the deductions and additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated by Section 103 shal
l not be required to be made if such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions were acquired
, made or constructed on or after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ninetieth (90th) day preceding t
he date of such Company Order;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the aggregate principal am
ount of Securities to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and delivery of w
hich the Company shall be entitled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the provisions of Section
1604, by virtue of compliance with all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable provisions of Section
1604 (except as hereinafter in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section otherwise provided); pro
vided, however, that such release
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall operate as a waiver by the
Company of the right to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and delivery of s
uch Securities and, to such extent, no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Securities may thereafter b
e authenticated and delivered

ich were the basis of such right to
of Securities so waived shall be
is of such release of property;
n amount equal to the aggregate
ons secured by Purchase Money Lien
ed to the Trustee by a certificate of
Lien prior to the Lien of this
by such trustee or other holder in
f such Lien in consideration for the
part thereof from such Lien, all
fter in this Section set forth;
nt of any Outstanding Securities
dental to any sale, exchange,
of the property to be released;
ations secured by Purchase Money Lien upon any
Lien hereof shall be used as a credit in
ess all obligations secured by such Purchase
the Trustee or to the trustee or other holder
his Indenture;
is of Property Additions or on the
tication and delivery of Securities under
emplated below in this Section; and
is of the delivery to the Trustee or
f a prior Lien of obligations secured by
ts contemplated below in this Section, to the
hereunder; and any Securities wh

the authentication and delivery
deemed to have been made the bas
(iv) any amount in cash and/or a
principal amount of any obligati
that, in either case, is evidenc
the trustee or other holder of a
Indenture to have been received
accordance with the provisions o
release of such property or any
subject to the limitations herea
(v) the aggregate principal amou
delivered to the Trustee; and
(vi) any taxes and expenses inci
dedication or other disposition
provided, however, that no oblig
property being released from the
connection with such release unl
Money Lien shall be delivered to
of a Lien prior to the Lien of t
(e) if the release is on the bas
basis of the right to the authen
Section 1604, all documents cont
(f) if the release is on the bas
to the trustee or other holder o
Purchase Money Lien, all documen
extent required.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If and to the extent that the re

lease of property is, in whole or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part, based upon Property Additi
ons (as permitted under the provisions of clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d)(ii) in the first paragraph o
f this Section), the Company shall, subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of said clause (d
)(ii) and except as hereafter in this paragraph
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, comply with all applic
able provisions of this Indenture as if such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions were to be ma
de the basis of the authentication and delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Securities equal in principal
amount to the Cost (or, as to property of which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Fair Value to the Company at
the time the same became Funded Property was
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified to be an amount less t
han the Cost thereof, such Fair Value, as so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified, in lieu of Cost) of t
hat portion of the property to be released which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is to be released on the basis o
f such Property Additions, as shown by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expert's Certificate required by
clause (c) in the first paragraph of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section; provided, however, that
the Cost of any Property Additions received or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be received by the Company in
whole or in part as consideration in exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the property to be released
shall for all purposes of this Indenture be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to be the amount stated i
n the Expert's Certificate provided for in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (c) in the first paragrap
h of this Section to be the Fair Value of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property to be released (x) plus
the amount of any cash and the fair market
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value of any other consideration
, further to be stated in such Expert's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate, paid and/or deliver
ed or to be paid and/or delivered by, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of any obligations assume
d or to be assumed by, the Company in connection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with such exchange as additional
consideration for such Property Additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or (y) less the amount of an
y cash and the fair market value of any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration, which shall also
be stated in such Expert's Certificate, received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to be received by the Company
in connection with such exchange in addition to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Property Additions. If and
to the extent that the release of property is in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whole or in part based upon the
right to the authentication and delivery of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities under Section 1604 (a

s permitted under the provisions of clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d)(iii) in the first paragraph
of this Section), the Company shall, except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter in this paragraph prov
ided, comply with all applicable provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1604 relating to such au
thentication and delivery. Notwithstanding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing provisions of this par
agraph, in no event shall the Company be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to deliver the document
s specified in Section 303.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the release of property is, i
n whole or in part, based upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery to the Trustee or the t
rustee or other holder of a Lien prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien of this Indenture of obliga
tions secured by Purchase Money Lien, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall deliver to the Tru
stee:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) an Officer's Certificate (i)
stating that no event has occurred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and is continuing which entitles
the holder of such Purchase Money Lien to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accelerate the maturity of the o
bligations, if any, outstanding thereunder and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) reciting the aggregate prin
cipal amount of obligations, if any, then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding thereunder in additi
on to the obligations then being delivered in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the release of s
uch property and the terms and conditions, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, on which additional obligat
ions secured by such Purchase Money Lien are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted to be issued; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (y) an Opinion of Counsel statin
g that, in the opinion of the signer,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) such obligations are valid o
bligations, entitled to the benefit of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Money Lien equally and
ratably with all other obligations, if any, then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding thereunder, (ii) tha
t such Purchase Money Lien constitutes, or, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the delivery of, and/or the fili
ng and/or recording in the proper places and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner of, the instruments of co
nveyance, assignment or transfer, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in such opinion, will
constitute, a Lien upon the property to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql released, subject to no Lien pri
or thereto except Liens generally of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql character of Permitted Liens and
such Liens, if any, as shall have existed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereon immediately prior to suc
h release as Liens prior to the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, (iii) if any obligati
ons in addition to the obligations being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered in connection with suc

h release of property are then outstanding, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are permitted to be issued, unde
r such Purchase Money Lien, (A) that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Money Lien constitutes,
or, upon the delivery of, and/or the filing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or recording in the proper p
laces and manner of, the instruments of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance, assignment or transf
er, if any, specified in such opinion, will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute, a Lien upon all othe
r property, if any, purporting to be subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, subject to no Lien prio
r thereto except Liens generally of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql character of Permitted Liens and
(B) that the terms of such Purchase Money Lien,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as then in effect, do not permit
the issuance of obligations thereunder except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the basis of property general
ly of the character of Property Additions, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retirement or deposit of outstan
ding obligations, the deposit of prior Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations or the deposit of ca
sh.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Opinion of Counsel provid
ed to the Trustee pursuant to clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (y) above is conditioned upon th
e filing and/or recording of any instruments of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance, assignment or transf
er, the Company shall promptly cause such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments to be filed and/or r
ecorded in the proper places and manner and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall deliver to the Trustee evi
dence of such filing and/or recording promptly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon receipt of such evidence by
the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If (a) any property to be releas
ed from the Lien of this Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under any provision of this Arti
cle (other than Section 1807) is subject to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien prior to the Lien hereof an
d is to be sold, exchanged, dedicated or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise disposed of subject to
such prior Lien and (b) after such release,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such prior Lien will not be a Li
en on any property subject to the Lien hereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then the Fair Value of such prop
erty to be released shall be deemed, for all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of this Indenture, to b
e the value thereof unencumbered by such prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien less the principal amount o
f the indebtedness secured by such prior Lien.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any Outstanding Securities deliv

ered to the Trustee pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (d) in the first paragrap
h of this Section shall, upon receipt of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company Order, forthwith be canc
eled by the Trustee. Any cash and/or obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposited with the Trustee pursu
ant to the provisions of this Section 1803, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the proceeds of any such obligat
ions, shall be held as part of the Mortgaged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property and shall be withdrawn,
released, used or applied in the manner, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent and for the purposes, and
subject to the conditions, provided in
e contrary notwithstanding, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property to be released constitu
tes Funded Property in part only, the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall obtain the release of the
part of such property which constitutes Funded
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property under this Section 1803
and obtain the release of the part of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property which does not constitu
te Funded Property under Section 1804. In such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event, (a) the application of Pr
operty Additions in the release under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1803 as contemplated in
clause (d)(ii) in the first paragraph thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be taken into account in c
lause (v) or clause (vi), whichever may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable, of the Expert's Cert
ificate described in clause (c) in Section 1804
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (b) the Trustee shall, at th
e election of the Company, execute and deliver a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql separate instrument of release w
ith respect to the property released under each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Sections or a consolidat
ed instrument of release with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property released under both of
such Sections considered as a whole.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1804. RELEASE OF PROPER
TY NOT CONSTITUTING FUNDED PROPERTY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may obtain the release o
f any part of the Mortgaged Property, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest therein, which does not
constitute Funded Property, and the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall release all its right, tit
le and interest in and to the same from the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, upon receipt by the Trus
tee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a Company Order requesting t
he release of such property and
instrument or instruments to effect such

cribing the property to be released
ge of the signer, no Event of Default has
e and dated not more than ninety (90)
ompany Order:
e released;
\page
the judgment of the signers, of
operty to be released;
o be released does not constitute
that the aggregate amount of the
y (whichever is less) of all Property
e Funded Property (excluding the
making deductions therefrom and
er contemplated by Section 103, is not
he Cost or Fair Value (whichever is
ased does not exceed the aggregate
y (whichever is less) of Property
tructed on or after the ninetieth
the Company Order requesting such
s contemplated in subclause (v)
mount by which zero (0) exceeds the
release;
(b) an Officer's Certificate des
and stating that, to the knowled
occurred and is continuing;
(c) an Expert's Certificate, mad
days prior to the date of such C
(i) describing the property to b
100
(ii) stating the Fair Value, in

the property to be released;
(iii) stating the Cost of the pr
(iv) stating that the property t
Funded Property;
(v) if true, stating either (A)
Cost or Fair Value to the Compan
Additions which do not constitut
property to be released), after
additions thereto of the charact
less than zero (0) or (B) that t
less) of the property to be rele
Cost or Fair Value to the Compan
Additions acquired, made or cons
(90th) day prior to the date of
release;
(vi) if neither of the statement
above can be made, stating the a
amount referred to in subclause
(v)(A) above (showing in reasonable

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql detail the calculation thereof);
and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vii) stating that, in the judgm
ent of the signers, such release
er this Indenture in contravention of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions hereof; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) if the Expert's Certificate
required by clause (c) above contains
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neither of the statements contem
plated in subclause (c)(v) above, an amount in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash, to be held by the Trustee
as part of the Mortgaged Property, equal to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount, if any, by which the low
er of (i) the Cost or Fair Value (whichever
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be less) of the property t
o be released and (ii) the amount shown in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subclause (c)(vi) above exceeds
the aggregate of items of the character
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in subclauses (iii) an
d (v) of clause (d) in the first paragraph of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1803 that the Company th
en elects to use as a credit under this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1804 (subject, however, to the s
ame limitations and conditions with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such items as are set forth in S
ection 1803).
ered to the Trustee pursuant to clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) above shall forthwith be can
celed by the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1805. RELEASE OF MINOR
PROPERTIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the provisions o
f Sections 1803 and 1804, unless an
rred and be continuing, the Company may obtain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the release from the Lien hereof
of any part of the Mortgaged Property, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest therein, and the Truste
e shall whenever from time to time requested by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company in a Company Order t
ransmitting therewith a form of instrument or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments to effect such relea
se, and without requiring compliance with any of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of Section 1803 o
r 1804, release from the Lien hereof all the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right, title and interest of the
Trustee in and to the same provided that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate Fair Value of the prop
erty to be so released on any date in a given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calendar year, together with all
other property theretofore released pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 1805 in such calend
ar year, shall not exceed the greater of (a) Ten

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Million Dollars ($10,000,000) an
d (b) three percent (3%) of the sum of (i) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount of Se
curities then Outstanding and (ii) the aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of Class A Bond
s then Outstanding other than Class A Bonds
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to and then held by th
e Trustee pursuant to Sections 1602 and 1701.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prior to the granting of any suc
h release, there shall be delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee (x) an Officer's Certifi
cate stating that, to the knowledge of the
occurred and is continuing and (y) an Expert's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate stating, in the judg
ment of the signers, the Fair Value of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property to be released, the agg
regate Fair Value of all other property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql theretofore released pursuant to
this Section in such calendar year and, as to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Property, the Cost thereo
f (or, if the Fair Value to the Company of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property at the time the same be
came Funded Property was certified to be an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount less than the Cost thereo
f, then such Fair Value, as so certified, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lieu of Cost), and that, in the
judgment of the signers, the release thereof
er this Indenture in contravention of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions hereof. On or before
December 31st of each calendar year, the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall deposit with the Trustee a
n amount in cash equal to the aggregate Cost of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the properties constituting Fund
ed Property so released during such year (or, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Fair Value to the Company of
any particular property at the time the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql became Funded Property was certi
fied to be an amount less than the Cost thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then such Fair Value, as so cert
ified, in lieu of Cost); provided, however, that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no such deposit shall be require
d to be made hereunder to the extent that cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other consideration shall, as
indicated in an Officer's Certificate delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee, have been deposi
ted with the trustee or other holder of a Class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Mortgage or other Lien prior t
o the Lien of this Indenture in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions thereof; and prov
ided, further, that the amount of cash so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be deposited may be
reduced, at the election of the Company, by the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql items specified in clause (d) in
the first paragraph of Section 1803, subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of the limitations and condi
tions specified in such Section, to the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent as if such property were
being released pursuant to Section 1803. Any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash deposited with the Trustee
under this Section may thereafter be withdrawn,
ection 1806.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1806. WITHDRAWAL OR OTH
ER APPLICATION OF FUNDED CASH; PURCHASE MONEY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OBLIGATIONS.
tion 1605 and Section 1702(a) and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as hereafter in this Sect
ion provided, unless an Event of Default shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have occurred and be continuing,
any Funded Cash held by the Trustee, and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other cash which is required to
be withdrawn, used or applied as provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) may be withdrawn from time t
o time by the Company to the extent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an amount equal to the Cost or t
he Fair Value to the Company (whichever is less)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Property Additions not consti
tuting Funded Property, after making any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deductions and additions pursuan
t to Section 103, described in an Expert's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate, dated not more than
ninety (90) days prior to the date of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company Order requesting such wi
thdrawal and complying with clause (ii) and, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent applicable, clause (i
ii) in Section 1603(b), delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee; provided, however, that
the deductions and additions contemplated by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 103 shall not be require
d to be made if such Property Additions were
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired, made or constructed on
or after the ninetieth (90th) day preceding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such Company Order;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) may be withdrawn from time t
o time by the Company in an amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the aggregate principal
amount of Securities to the authentication and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of which the Company sh
all be entitled under the provisions of Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1604 hereof, by virtue of compli
ance with all applicable provisions of Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1604 (except as hereinafter in t
his Section otherwise provided); provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that such withdrawal of

cash shall operate as a waiver by the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the right to the authenticati
on and delivery of such Securities and, to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent, no such Securities may t
hereafter be authenticated and delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder; and any such Securiti
es which were the basis of such right to the
ecurities so waived shall be deemed to have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made the basis of such withdrawa
l of cash;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) may be withdrawn from time t
o time by the Company in an amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the aggregate principal
amount of any Outstanding Securities delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) may, upon the request of the
Company, be used by the Trustee for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the purchase of Securities in th
e manner, at the time or times, in the amount or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts, at the price or prices
and otherwise as directed or approved by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, all subject to the limi
tations hereafter in this Section set forth; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) may, upon the request of the
Company, be applied by the Trustee to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the payment (or provision theref
or pursuant to Article Eight) at Stated Maturity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any Securities or to the rede
mption (or similar provision therefor) of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities which are, by their t
erms, redeemable, in each case of such series as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be designated by the Company
, any such redemption to be in the manner and as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Article Five, all su
bject to the limitations hereafter in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section set forth.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such moneys shall, from time to
time, be paid or used or applied by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee, as aforesaid, upon
the request of the Company in a Company Order,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and upon receipt by the Trustee
of an Officer's Certificate stating that, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql knowledge of the signer, no Even
t of Default has occurred and is continuing. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to the extent that the withd
rawal of cash is based upon Property Additions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (as permitted under the provisio
ns of clause (a) above), the Company shall,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the provisions of sai
d clause (a) and except as hereafter in this

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph provided, comply with
all applicable provisions of this Indenture as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if such Property Additions were
made the basis for the authentication and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of Securities equal in
principal amount to the cash so to be withdrawn.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If and to the extent that the wi
thdrawal of cash is based upon the right to the
ecurities (as permitted under the provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (b) above), the Company s
hall, except as hereafter in this paragraph
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, comply with all applic
able provisions of Section 1604 relating to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authentication and delivery. Not
withstanding the foregoing provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph, in no event shall the
Company be required to deliver the documents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Section 303.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the generality o
f clauses (d) and (e) above, no cash
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be applied pursuant to such c
lauses shall be applied to the payment of an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount in excess of the principa
l amount of any Securities to be purchased, paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or redeemed except to the extent
that the aggregate principal amount of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities theretofore, and of a
ll Securities then to be, purchased, paid or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed pursuant to such clause
s is not less than the aggregate cost for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal of, premium, if any, a
nd accrued interest, if any, on and brokerage
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commissions, if any, with respec
t to, such Securities.
ered to the Trustee pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (c) in the first paragrap
h of this Section shall, upon request by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, forthwith be canceled b
y the Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any obligations secured by Purch
ase Money Lien delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee in consideration of the
release of property from the Lien of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, together with any evi
dence of such Purchase Money Lien held by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, shall be released from
the Lien of this Indenture and delivered to or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the order of the Company up
on payment by the Company to the Trustee of an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount in cash equal to the aggr
egate principal amount of such obligations less
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the aggregate amount theretofore
paid to the Trustee (by the Company, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligor or otherwise) in respect
of the principal of such obligations.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The principal of and interest on
any such obligations secured by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Money Lien held by the
Trustee shall be paid to the Trustee as and when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same become payable. The int
erest received by the Trustee on any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations shall be deemed not
to constitute Funded Cash and shall be remitted
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company; provided, howeve
r, that if an Event of Default shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred and be continuing, such
proceeds shall be held as part of the Mortgaged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property until such Event of Def
ault shall have been cured or waived.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Trustee shall have and may e
xercise all the rights and powers of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any owner of such obligations an
d of all substitutions therefor and, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limiting the generality of the f
oregoing, may collect and receive all insurance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql moneys payable to it under any o
f the provisions thereof and apply the same in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the provisions t
hereof, may consent to extensions thereof at a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql higher or lower rate of interest
, may join in any plan or plans of voluntary or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql involuntary reorganization or re
adjustment or rearrangement and may accept and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hold hereunder new obligations,
stocks or other securities issued in exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor under any such plan. An
y discretionary action which the Trustee may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to take in connection w
ith any such obligations or substitutions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor shall be taken, so long
as no Event of Default shall have occurred and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be continuing, in accordance wit
h a Company Order, and, during the continuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of an Event of Default, in its o
wn discretion.
notwithstanding, the Company may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocably waive all right to t
he withdrawal pursuant to this Section of, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other rights with respect to
, any obligations secured by Purchase Money Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by the Trustee, and the pro
ceeds of any such obligations, by delivery to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee of a Company Order:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) specifying such obligations

and stating that the Company thereby
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waives all rights to the withdra
wal thereof and of the proceeds thereof pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to this Section, and any other r
ights with respect thereto; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (y) directing that the principal
of such obligations be applied as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in clause (e) in the fi
rst paragraph of this Section, specifying the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities to be paid or redeeme
d or for the payment or redemption of which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment is to be made.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Following any such waiver, the i
nterest on any such obligations shall be applied
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the payment of interest, if a
ny, on the Securities to be paid or redeemed or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the payment or redemption of
which provision is to be made, as specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the aforesaid Company Order, as
and when such interest shall become due from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time to time, and any excess fun
ds remaining from time to time after such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application shall be applied to
the payment of interest on any other Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as and when the same shall becom
e due. Pending any such application, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on such obligations sha
ll be invested in Investment Securities as shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be selected by the Company and s
pecified in written instructions delivered to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee. The principal of an
y such obligations shall be applied solely to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the payment of principal of the
Securities to be paid or redeemed or for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment or redemption of which p
rovision is to be made, as specified in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aforesaid Company Order. Pending
such application, the principal of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations shall be invested in
Eligible Obligations as shall be selected by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company and specified in wri
tten instructions delivered to the Trustee. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation of the Company to pay
the principal of such Securities when the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall become due at maturity, sh
all be offset and reduced by the amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeds of such obligations the
n held, and to be applied, by the Trustee in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with this paragraph.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1807. RELEASE OF PROPER
TY TAKEN BY EMINENT DOMAIN, ETC.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Should any of the Mortgaged Prop
erty, or any interest therein, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taken by exercise of the power o
f eminent domain or be sold to an entity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possessing the power of eminent

domain under a threat to exercise the same, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql should the Company elect not to
obtain the release of such property pursuant to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other provisions of this Article
, the Trustee shall, upon request of the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evidenced by a Company Order tra
nsmitting therewith a form of instrument or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments to effect such relea
se, release from the Lien hereof all its right,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql title and interest in and to the
property so taken or sold (or with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an interest in property, subordi
nate the Lien hereof to such interest), upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receiving (a) an Opinion of Coun
sel to the effect that such property has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taken by exercise of the power o
f eminent domain or has been sold to an entity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possessing the power of eminent
domain under threat of an exercise of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power, (b) an Officer's Certific
ate stating the amount of net proceeds received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to be received for such prope
rty so taken or sold, and the amount so stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to be the Fair V
alue of such property for the purpose of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice to the Holders of Securit
ies, (c) if any portion of such property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes Funded Property, an
Expert's Certificate stating the Cost thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (or, if the Fair Value to the Co
mpany of such portion of such property at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time the same became Funded Prop
erty was certified to be an amount less than the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cost thereof, then such Fair Val
ue, as so certified, in lieu of Cost) and (d) if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any portion of such property con
stitutes Funded Property, a deposit by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company of an amount in cash equ
al to the Cost or Fair Value stated in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expert's Certificate delivered p
ursuant to clause (c) above; provided, however,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the amount required to be s
o deposited shall not exceed the portion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql net proceeds received or to be r
eceived for such property so taken or sold which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is allocable on a pro-rata or ot
her reasonable basis to the portion of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property constituting Funded Pro
perty; and provided, further, that no such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposit shall be required to be
made hereunder if the proceeds of such taking or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale shall, as indicated in an O
fficer's Certificate delivered to the Trustee,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been deposited with the tru

stee or other holder of a Class A Mortgage or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Lien prior to the Lien of
this Indenture. Any cash deposited with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee under this Section may t
hereafter be withdrawn, used or applied in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner, to the extent and for th
e purposes, and subject to the conditions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Section 1806.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1808. ALTERNATIVE RELEA
SE PROVISION.
e contrary notwithstanding, unless an
rred and be continuing, the Company may obtain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the release of any part of the M
ortgaged Property which is subject to the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a Class A Mortgage, and the T
rustee shall release all of its right, title and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in and to the same from
the Lien of this Indenture, by delivery to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee of an Officer's Certific
ate stating that, to the knowledge of the
occurred and is continuing, an Expert's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate as to the Fair Value
of the property to be released and stating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that, in the judgment of the sig
ners, such release will not impair the security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Indenture in contrave
ntion of the provisions hereof, and a copy of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql release of such part of the Mort
gaged Property from the Lien of such Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage executed by the trustee
thereunder; provided, however, that this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section shall not apply with res
pect to any release of Mortgaged Property from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lien of any Class A Mortgage
in connection with the discharge of such Class
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Mortgage as contemplated by Se
ction 1707.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1809. DISCLAIMER OR QUI
TCLAIM.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In case the Company has sold, ex
changed, dedicated or otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposed of, or has agreed or in
tends to sell, exchange, dedicate or otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispose of, or a Governmental Au
thority has ordered the Company to divest itself
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, any Excepted Property or any
other property not subject to the Lien hereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the Company desires to discla
im or quitclaim title to property to which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company does not purport to have
title, the Trustee shall, from time to time,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclaim or quitclaim such prope
rty upon receipt by the Trustee of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a Company Order requesting s
uch disclaimer or quitclaim and
instrument to effect such disclaimer or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quitclaim;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) an Officer's Certificate des
cribing the property to be disclaimed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or quitclaimed; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) an Opinion of Counsel statin
g the signer's opinion that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property is not subject to the L
ien hereof or required to be subject thereto by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the provisions hereof and
complying with the requirements of Section 104
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1810. MISCELLANEOUS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Expert's Certificate as
to the Fair Value of property to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql released from the Lien of this I
ndenture in accordance with any provision of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Article, and as to the noni
mpairment, by reason of such release, of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security under this Indenture in
contravention of the provisions hereof, shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made by an Independent Expert
if the Fair Value of such property and of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other property released since th
e commencement of the then current calendar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year, as set forth in the certif
icates required by this Indenture, is ten
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percent (10%) or more of the agg
regate principal amount of the Securities at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time Outstanding; but such Exper
t's Certificate shall not be required to be made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by an Independent Expert in the
case of any release of property if the Fair
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value thereof, as set forth in t
he certificates required by this Indenture, is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than Twenty-five Thousand D
ollars ($25,000) or less than one percent (1%)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the aggregate principal amoun
t of the Securities at the time Outstanding. To
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent that the Fair Value o
f any property to be released from the Lien of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture shall be stated i
n an Independent Expert's Certificate, such Fair
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value shall not be required to b
e stated in any other Expert's Certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered in connection with suc

h release.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) No release of property from
the Lien of this Indenture effected in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the provisions,
and in compliance with the conditions, set forth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in this Article and in Sections
104 and 105 shall be deemed to impair the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security of this Indenture in co
ntravention of any provision hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) If the Mortgaged Property sh
all be in the possession of a receiver
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or trustee, lawfully appointed,
the powers hereinbefore conferred upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company with respect to the rele
ase of any part of the Mortgaged Property or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest therein or the withdraw
al of cash may be exercised, with the approval
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Trustee, by such receiver
or trustee, notwithstanding that an Event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default may have occurred and be
continuing, and any request, certificate,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointment or approval made or
signed by such receiver or trustee for such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes shall be as effective a
s if made by the Company or any of its officers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or appointees in the manner here
in provided; and if the Trustee shall be in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possession of the Mortgaged Prop
erty under any provision of this Indenture, then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such powers may be exercised by
the Trustee in its discretion notwithstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that an Event of Default may hav
e occurred and be continuing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) If the Company shall retain
any interest in any property released
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the Lien of this Indenture
as provided in Section 1803, 1804 or 1805, this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture shall not become or be
, or be required to become or be, a Lien upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such property or such interest t
herein or any improvements, extensions or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additions to such property or re
newals, replacements or substitutions of or for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such property or any part or par
ts thereof unless the Company shall execute and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver to the Trustee an indent
ure supplemental hereto, in recordable form,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql containing a grant, conveyance,
transfer and mortgage thereof. As used in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection, the terms "improveme
nts", "extensions" and "additions" shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited as set forth in Section
1201.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Notwithstanding the occurren
ce and continuance of an Event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default, the Trustee, in its dis

cretion, may release from the Lien hereof any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part of the Mortgaged Property o
r permit the withdrawal of cash, upon compliance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the other conditions specif
ied in this Article in respect thereof.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) No purchaser or grantee of p
roperty purporting to have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql released hereunder shall be boun
d to ascertain the authority of the Trustee to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execute the instrument or instru
ments of release, or to inquire as to any facts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by the provisions hereo
f for the exercise of such authority; nor shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any purchaser or grantee of any
property or rights permitted by this Article to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be sold, granted, exchanged, ded
icated or otherwise disposed of, be under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to ascertain or inqui
re into the authority of the Company to make any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such sale, grant, exchange, dedi
cation or other disposition.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1811. ESTABLISHMENT OF
THE RELEASE DATE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The date upon which the Lien of
this Indenture shall be discharged,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql canceled, terminated or satisfie
d (the "Release Date") shall be deemed to occur
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for all purposes under this Inde
nture upon the date chosen by the Company and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in a Company Order del
ivered to the Trustee, which date shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earlier than the date of deliver
y by the Company to the Trustee of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) A Company Order requesting e
xecution and delivery by the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a supplemental indenture and
such instruments as the Company may deem
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary or desirable to discha
rge, cancel, terminate or satisfy the Lien of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Indenture;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) An Officer's Certificate sta
ting that:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) To the knowledge of the sign
er, no Event of Default has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred and is continuing; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) The aggregate principal amo
unt of all Class A Bonds

rtgages, other than Class A Bonds held
the greater of 5% of the net book
operty or 5% of Capitalization;
by the Trust Indenture Act or by the
curities; and
effect that none of the Company's
than Excepted Property, is subject to any Lien
nture and Permitted Liens.
Date, the Trustee shall execute and
any the supplemental indenture and instruments
ncel, terminate or satisfy the Lien of this
Indenture to the contrary, from and
gation of the Company to make any payment with
premium, if any and interest on the Class A
be deemed satisfied and discharged, and such
ave zero fair value. From and after the Release
ance of Securities that refer or relate to the
tgages shall be inapplicable. Upon the
e Trustee shall promptly surrender all Class A
or to the trustee under the applicable Class A
\page
IEN.
any shall maintain and preserve the
s any Securities shall remain Outstanding,
outstanding under all Class A Mo

by the Trustee, does not exceed
value of the Electric Utility Pr
(c) Any other documents required
terms of any then Outstanding Se
(d) An Opinion of Counsel to the
Electric Utility Property, other
other than the Lien of this Inde
Upon the occurrence of a Release
deliver to the order of the Comp
described above to discharge, ca
Indenture.
Notwithstanding anything in the
after the Release Date, the obli
respect to the principal of and
Bonds held by the Trustee shall
Class A Bonds shall thereafter h
Date, any conditions to the issu
Class A Bonds or the Class A Mor
occurrence of a Release Date, th
Bonds held by it to the Company
Mortgage for cancellation.
107
SECTION 1812. PRESERVATION OF L

Until the Release Date, the Comp
Lien of this Indenture so long a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject, however, to the provisi

ons of Article Thirteen and Article Eighteen.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1813. MAINTENANCE OF PR
OPERTIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Until the Release Date, the Comp
any shall cause (or, with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property owned in common with ot
hers, make reasonable effort to cause) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property, considered a
s a whole, to be maintained and kept in good
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition, repair and working or
der and shall cause (or, with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property owned in common with ot
hers, make reasonable effort to cause) to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made such repairs, renewals, rep
lacements, betterments and improvements thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as, in the judgment of the Compa
ny, may be necessary in order that the operation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Mortgaged Property, consi
dered as a whole, may be conducted in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with common industry practice; p
rovided, however, that nothing in this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall prevent the Company from d
iscontinuing, or causing the discontinuance of,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the operation and maintenance of
any portion of the Mortgaged Property if such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discontinuance is in the judgmen
t of the Company desirable in the conduct of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business; and provided, further,
that nothing in this Section shall prevent the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company from selling, transferri
ng or otherwise disposing of, or causing the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale, transfer or other disposit
ion of, any portion of the Mortgaged Property in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with the other Articl
es of this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1814. PAYMENT OF TAXES;
DISCHARGE OF LIENS.
any shall pay all taxes and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assessments and other government
al charges lawfully levied or assessed upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property, or upon any
part thereof, or upon the interest of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee in the Mortgaged Propert
y, before the same shall become delinquent, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall observe and conform in all
material respects to all valid requirements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Governmental Authority relat
ive to the Mortgaged Property and all covenants,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and conditions upon or und
er which any of the Mortgaged Property is held;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Company shall not suffer
any Lien to be created upon the Mortgaged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, or any part thereof, p
rior to the Lien hereof, other than Permitted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liens and the Liens of Class A M

ortgages and other than, in the case of property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter acquired, Purchase Mon
ey Liens and any other Liens existing or placed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereon at the time of the acqui
sition thereof (including, but not limited to,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lien of any Class A Mortgage
); provided, however, that nothing in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section contained shall require
the Company (i) to observe or conform to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirement of Governmental Auth
ority or to cause to be paid or discharged, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make provision for, any such
Lien, or to pay any such tax, assessment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental charge so long as t
he validity thereof shall be contested in good
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql faith and by appropriate legal p
roceedings, (ii) to pay, discharge or make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions for any tax, assessme
nt or other governmental charge, the validity of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which shall not be so contested
if adequate security for the payment of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tax, assessment or other governm
ental charge and for any penalties or interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which may reasonably be anticipa
ted from failure to pay the same shall be given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee or (iii) to pay,
discharge or make provisions for any Liens
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql existing on the Mortgaged Proper
ty at the Execution Date; and provided, further,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that nothing in this Section sha
ll prohibit the issuance or other incurrence of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional indebtedness, or the
refunding of outstanding indebtedness, secured
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by any Lien prior to the Lien he
reof which is permitted under this Section to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue to exist.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1815. INSURANCE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Company shall (i) keep o
r cause to be kept all the property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the Lien of this Inde
nture insured against loss by fire, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent that property of similar
character is usually so insured by companies
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similarly situated and operating
like properties, to a reasonable amount, by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reputable insurance companies, t
he proceeds of such insurance (except as to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql loss of Excepted Property and ex
cept as to any particular loss less than the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater of (A) Ten Million Dolla
rs ($10,000,000) and (B) three percent (3%) of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sum of (1) the principal amo
unt of Securities Outstanding on the date of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such particular loss and (2) the
principal amount of the Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding on the date of such
particular loss, other than Class A Bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to and held by the Tru
stee pursuant to Sections 1602 and 1701) to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made payable, subject to applica
ble law, to the Trustee as the interest of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee may appear, to the trust
ee of a Class A Mortgage, or to the trustee or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other holder of any other Lien p
rior hereto upon property subject to the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, if the terms thereof req
uire such payment or (ii) in lieu of or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplementing such insurance in
whole or in part, adopt some other method or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plan of protection against loss
by fire at least equal in protection to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql method or plan of protection aga
inst loss by fire of companies similarly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql situated and operating propertie
s subject to similar fire hazards or properties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on which an equal primary fire i
nsurance rate has been set by reputable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance companies; and if the
Company shall adopt such other method or plan of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql protection, it shall, subject to
applicable law (and except as to any loss of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Excepted Property and except as
to any particular loss less than the greater of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (X) Ten Million Dollars ($10,000
,000) and (Y) three percent (3%) of the sum of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) the principal amount of Secu
rities Outstanding on the date of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular loss and (2) the prin
cipal amount of the Class A Bonds Outstanding on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of such particular loss
, other than Class A Bonds delivered to and held
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Trustee pursuant to Secti
ons 1602 and 1701) pay to the Trustee on account
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any loss covered by such meth
od or plan an amount in cash equal to the amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such loss less any amounts ot
herwise paid to the Trustee in respect of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql loss or paid to the trustee unde
r a Class A Mortgage or to the trustee or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of any other Lien prior h
ereto upon property subject to the Lien hereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in respect of such loss if the t
erms thereof require such payment. Any cash so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be paid by the Compa
ny pursuant to any such method or plan shall for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the purposes of this Indenture b
e deemed to be proceeds of insurance. In case of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the adoption of such other metho
d or plan of protection, the Company shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnish to the Trustee a certifi
cate of an actuary or other qualified person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointed by the Company with re
spect to the adequacy of such method or plan.

notwithstanding, the Company may have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fire insurance policies with (i)
a deductible provision in a dollar amount per
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence not exceeding the gre
ater of (A) Ten Million Dollars ($10,000,000)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (B) three percent (3%) of th
e sum of (1) the principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Outstanding on the da
te such policy goes into effect and (2) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of the Class A
Bonds Outstanding on the date such policy goes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into effect, other than Class A
Bonds delivered to and held by the Trustee
01, and/or (ii) co-insurance or self insurance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions with a dollar amount
per occurrence not exceeding thirty percent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (30%) of the loss proceeds other
wise payable; provided, however, that the dollar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount described in clause (i) a
bove may be exceeded to the extent such dollar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount per occurrence is below t
he deductible amount in effect as to fire
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance (X) on property of sim
ilar character insured by companies similarly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql situated and operating like prop
erty or (Y) on property as to which an equal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql primary fire insurance rate has
been set by reputable insurance companies.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) All moneys paid to the Trust
ee by the Company in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section or received by the
Trustee as proceeds of any insurance, in either
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case on account of a loss on or
with respect to Funded Property, shall, subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the requirements of any Class
A Mortgage or other Lien prior hereto upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property subject to the Lien her
eof, be held by the Trustee and, subject as
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aforesaid, shall be paid by it t
o the Company to reimburse the Company for an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal amount expended or committ
ed for expenditure in the rebuilding, renewal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or replacement of or substit
ution for the property destroyed or damaged,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon receipt by the Trustee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) a Company Request requesting
such payment,
amaged or destroyed;
perty (or, if the Fair Value
at the time the same became
be an amount less than the Cost
s so certified, in lieu of Cost)
n shall have affected only a
g the allocable portion of such
ded or committed for
enewal, replacement of and/or
and
e Company of such property
e rebuilt or renewed and/or of
roperty, and if
he date of acquisition
perty has been used or
other than the Company, in
ich it has been or is to be
and
y of such property as
ficate is not less than
5,000) and not less than one
incipal amount of the
ng,
required by this clause (D) shall
(ii) an Expert's Certificate:

(A) describing the property so d
(B) stating the Cost of such pro
to the Company of such property
Funded Property was certified to
thereof, then such Fair Value, a
or, if such damage or destructio
portion of such property, statin
Cost or Fair Value;
(C) stating the amounts so expen
expenditure in the rebuilding, r
substitution for such property;
(D) stating the Fair Value to th
as rebuilt or renewed or as to b
the replacement or substituted p
(a) within six months prior to t
thereof by the Company, such pro
operated, by a person or persons
a business similar to that in wh
used or operated by the Company,
(b) the Fair Value to the Compan
set forth in such Expert's Certi
Twenty-five Thousand Dollars ($2
percent (1%) of the aggregate pr
Securities at the time Outstandi
the Expert making the statement
be an Independent Expert, and
(iii) an Opinion of Counsel stat
ing that, in the opinion of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql signer, the property so rebuilt
or renewed or to be rebuilt or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql renewed, and/or the replacement
property, is or will be subject to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any such moneys not so applied w
ithin thirty-six (36) months after its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt by the Trustee, or in re
spect of which notice in writing of intention to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql apply the same to the work of re
building, renewal, replacement or substitution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then in progress and uncompleted
shall not have been given to the Trustee by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company within such thirty-six (
36) months, or which the Company shall at any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time notify the Trustee is not t
o be so applied, shall thereafter be withdrawn,
ection 1806; provided, however, that if the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of such moneys shall exce
ed the amount stated pursuant to clause (B) in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Expert's Certificate referre
d to above, the amount of such excess shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deemed to be Funded Cash, sha
ll not be subject to Section 1806 and shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remitted to or upon the order of
the Company upon the withdrawal, use or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application of the balance of su
ch moneys pursuant to Section 1806.
\page
e contrary notwithstanding, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property on or with respect to w
hich a loss occurs constitutes Funded Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in part only, the Company may, a
t its election, obtain the reimbursement of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance proceeds attributable
to the part of such property which constitutes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Property under this subse
ction (b) and obtain the reimbursement of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance proceeds attributable
to the part of such property which does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute Funded Property under
subsection (c) of this Section 1815.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) All moneys paid to the Trust
ee by the Company in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section or received by the
Trustee as proceeds of any insurance, in either
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case on account of a loss on or
with respect to property which does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute Funded Property, shal

l, subject to the requirements of any Class A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage or other Lien prior her
eto upon property subject to the Lien hereof, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by the Trustee and, subject
as aforesaid, shall be paid by it to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company upon receipt by the Trus
tee of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) a Company Request requesting
such payment;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an Expert's Certificate sta
ting:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (A) that such moneys were paid t
o or received by the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on account of a loss on or with
respect to property which does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not constitute Funded Property;
and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) if true, either (I) that the
aggregate amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cost or Fair Value to the Compan
y (whichever is less) of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property Additions which do not
constitute Funded Property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (excluding, to the extent of suc
h loss, the property on or with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to which such loss was i
ncurred), after making deductions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefrom and additions thereto
of the character contemplated by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 103, is not less than ze
ro (0) or (II) that the amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such loss does not exceed the ag
gregate Cost or Fair Value to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company (whichever is less) of P
roperty Additions acquired, made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or constructed on or after the n
inetieth (90th) day prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of the Company Request requ
esting such payment; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (C) if neither of the statements
contemplated in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subclause (B) above can be made,
the amount by which zero (0)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceeds the amount referred to i
n subclause (B)(I) above (showing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in reasonable detail the calcula
tion thereof); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) if the Expert's Certificat
e required by clause (ii) above
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contains neither of the statemen
ts contemplated in clause (ii)(B)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above, an amount in cash, to be
held by the Trustee as part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgaged Property, equal to the

amount shown in clause (ii)(C) above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To the extent that the Company s
hall be entitled to withdraw proceeds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of insurance pursuant to this su
bsection (c), such proceeds shall be deemed not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to constitute Funded Cash.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Whenever under the provision
s of this Section the Company is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to deliver moneys to th
e Trustee and at the same time shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfied the conditions set for
th herein for payment of moneys by the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company, there shall be p
aid to or retained by the Trustee or paid to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, as the case may be, onl
y the net amount.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon the occurrence of the R
elease Date, this Section shall cease
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be in effect and the Trustee
shall promptly return to the Company all moneys
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by the Trustee pursuant to
this Section.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1816. RECORDING, FILING
, ETC.
any shall cause this Indenture and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indentures and instruments suppl
emental hereto (or notices, memoranda or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing statements as may be r
ecorded or filed to place third parties on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice thereof) to be promptly r
ecorded and filed and re-recorded and re-filed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such manner and in such place
s, as may be required by law in order fully to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preserve and protect the securit
y of the Holders of the Securities and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights of the Trustee, and shall
furnish to the Trustee:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) promptly after the execution
and delivery of this Indenture and of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each supplemental indenture, an
Opinion of Counsel either stating that in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opinion of such counsel this Ind
enture or such supplemental indenture (or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other instrument, resolution, ce
rtificate, notice, memorandum or financing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement in connection therewit
h) has been properly recorded and filed, so as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make effective the Lien inten

ded to be created hereby or thereby, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reciting the details of such act
ion, or stating that in the opinion of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel no such action is necess
ary to make such Lien effective. The Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to be in complia
nce with this subsection (a) if (i) the Opinion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Counsel herein required to be
delivered to the Trustee shall state that this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture or such supplemental i
ndenture (or any other instrument, resolution,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate notice, memorandum o
r financing statement in connection therewith)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been received for record or
filing in each jurisdiction in which it is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be recorded or filed
and that, in the opinion of such counsel (if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such is the case), such receipt
for record or filing makes effective the Lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intended to be created by this I
ndenture or such supplemental indenture, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) such opinion is delivered t
o the Trustee within such time, following the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Execution Date or such supplemen
tal indenture, as shall be practicable having
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due regard to the number and dis
tance of the jurisdictions in which this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture or such supplemental i
ndenture (or such other instrument, resolution,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate, notice, memorandum
or financing statement in connection therewith)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is required to be recorded or fi
led; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) on or before December 1 of e
ach year, beginning December 1, 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Opinion of Counsel stating ei
ther (i) that in the opinion of such counsel
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such action has been taken, sinc
e the date of the most recent Opinion of Counsel
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnished pursuant to this subse
ction (b) or the first Opinion of Counsel
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnished pursuant to subsection
(a) of this Section, with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recording, filing, re-recording,
and re-filing of this Indenture and of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indenture supplemental to this I
ndenture (or any other instrument, resolution,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate, notice, memorandum
or financing statement in connection therewith),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as is necessary to maintain the
effectiveness of the Lien hereof, and reciting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such action, or (ii) that in the
opinion of such counsel no such action is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to maintain the effect
iveness of such Lien.
any shall execute and deliver such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemental indenture or indent

ures and such further instruments and do such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further acts as may be necessary
or proper to carry out the purposes of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and to make subject to
the Lien hereof any property hereafter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired, made or constructed an
d intended to be subject to the Lien hereof, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to transfer to any new trustee o
r trustees or co-trustee or co-trustees, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql estate, powers, instruments or f
unds held in trust hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This instrument may be executed
in any number of counterparts, each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which so executed shall be deeme
d to be an original, but all such counterparts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall together constitute but on
e and the same instrument.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the parties
hereto have caused this Indenture to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be duly executed, and their resp
ective corporate seals to be hereunto affixed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and attested, all as of the day
and year first above written.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Kirk R. Oliver
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Kirk R. Oliver
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Vice President
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [SEAL]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTEST:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ John F. Stephens
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assistant Secretary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Remo J. Reale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Remo J. Reale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice President

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [SEAL]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTEST
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ Thomas B. Zakrzewski
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice President
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATE OF TEXAS
)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql )
ss.:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COUNTY OF DALLAS
)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On this 29th day of April, 2002,
before me, a notary public, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned officer, personally
appeared Kirk R. Oliver, who acknowledged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql himself to be the Vice President
of ONCOR ELECTRIC DELIVERY COMPANY, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation of the State of Texa
s and that he, as such Vice President, being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized to do so, executed th
e foregoing instrument for the purposes therein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained, by signing the name o
f the corporation by himself as Vice President.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In witness whereof, I hereunto s
et my hand and official seal.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ DeeAnn Graham
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notary Public, State of Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission Expires 04-21-2003
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATE OF NEW YORK )
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql )
ss.:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COUNTY OF NEW YORK )
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On this 29th day of April, 2002,
before me, a notary public, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned officer, personally
appeared Remo J. Reale, who acknowledged himself
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be a Vice President of THE BA
NK OF NEW YORK, a New York banking corporation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and that he, as such Vice Presid

ent, being authorized to do so, executed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing instrument for the pur
poses therein contained, by signing the name of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the corporation by himself as Vi
ce President.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In witness whereof, I hereunto s
et my hand and official seal.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:/s/ William J. Cassels
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql William J. Cassels
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notary Public, State of New York
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 01CA5027729
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Qualified in Bronx County
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission Expires May 16, 2002
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESCRIPTION OF REAL PROPERTY THA
T IS MORTGAGED PROPERTY AS OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE EXECUTION DATE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All real property owned by Oncor
Electric Delivery Company on the Execution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date (as defined in the Indentur
e) in each of the following 105 Counties of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of Texas referenced herein
, including but not limited to the real property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically described on the re
ferenced exhibits hereto, other than Excepted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property (as defined in the Inde
nture):
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANDERSON
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-1 - Transmission Route
s (50 pages)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-2 - Substations ( 1 p
age)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-3 - Distribution Route
s (1 page)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-4 - Facility Sites (2
pages)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-5 - Fee Land at Genera
tion Plants (none)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-6 - SESCO Transmission
Routes (2 pages)
s (9 pages)
e)
s (1 page)
pages)
s (44 pages)
e)
s (1 page)
page)
s (15 pages)
es)
\page
s (1 page)
page)
s (4 pages)
e)
ANDREWS
------Exhibit A-1 - Transmission Route
Exhibit A-2 - Substations (1 pag
Exhibit A-3 - Distribution Route
Exhibit A-4 - Facility Sites ( 2
ANGELINA
-------Exhibit A-1 - Transmission Route
Exhibit A-4 - Facility Sites (1
ARCHER
-----Exhibit A-1 - Transmission Route
A-1

BASTROP
s (1 page)
page)
s (6 pages)
e)
s (1 page)
s (53 pages)
es)
s (1 page)
pages)
s (1 page)
e)
s (1 page)
s (5 pages)
e)
s (1 page)

BAYLOR
BELL
---Exhibit A-1 - Transmission Route
BORDEN
BOSQUE
BRAZOS
------
s (none)
\page
s (1 page)
s (20 pages)
e)
s (1 page)
page)
s (none)
s (1 page)
s (1 page)
s (44 pages)
e)
s (1 page)
page)
Exhibit A-1 - Transmission Route
A-2
Exhibit A-2 - Substations (none)

BROWN
----Exhibit A-1 - Transmission Route
BURNET
CAMP
CHEROKEE
tion Plants (none)
Routes (59 pages)
s (12 pages)
e)
s (1 page)
page)
\page
s (none)
s (1 page)
s (none)
s (1 page)
s (62 pages)
es)
s (1 page)
Exhibit A-5 - Fee Land at Genera

Exhibit A-6 - SESCO Transmission
CLAY
A-3
COKE
COLEMAN
COLLIN
page)
s (24 pages)
e)
s (1 page)
page)
s (22 pages)
e)
s (1 page)
page)
s (3 pages)
\page
e)
s (1 page)
s (2 pages)
e)

COMANCHE
COOKE
CORYELL
A-4

CRANE
s (1 page)
s (2 pages)
e)
s (1 page)
s (161 pages)
ges)
s (1 page)
pages)
tion Plants (7 pages)
s (12 pages)
e)
s (1 page)
pages)
s (6 pages)
s (1 page)

CULBERSON
--------Exhibit A-1 - Transmission Route
DALLAS
Exhibit A-2 - Substations (16 pa
DAWSON
DELTA
\page
s (33 pages)
es)
s (1 page)
page)
s (15 pages)
e)
s (1 page)
pages)
s (20 pages)
es)
s (1 page)
pages)
s (51 pages)
es)
A-5
DENTON
EASTLAND
ECTOR
ELLIS
s (1 page)
page)
s (20 pages)
e)
s (1 page)
page)
\page
s (11 pages)
s (1 page)
ne)
tion Plants (none)
Routes (1 page)
s (37 pages)
e)
s (1 page)
page)

ERATH

A-6
FALLS
Exhibit A-4 - Facility Sites (no
FANNIN
s (9 pages)
s (1 page)
page)
s (23 pages)
s (44 pages)
e)
s (1 page)
ne)
tion Plants (none)
\page
Routes (16 pages)
s (1 page)
s (1 page)
FISHER
FRANKLIN
FREESTONE
A-7

GAINES
GLASSCOCK
---------
s (7 pages)
e)
s (1 page)
s (46 pages)
es)
s (1 page)
pages)
s (4 pages)
s (42 pages)
es)
s (1 page)
pages)
tion Plants (1 page)
Routes (1 page)
s (36 pages)
e)

GRAYSON
HASKELL
HENDERSON
HILL
\page
s (1 page)
pages)
s (8 pages)
e)
s (1 page)
page)
s (38 pages)
e)
s (1 page)
pages)
s (19 pages)
e)
s (1 page)
page)
A-8

HOOD
HOPKINS
HOUSTON
HOWARD
s (21 pages)
es)
s (1 page)
pages)
s (35 pages)
e)
\page
s (1 page)
page)
\page
s (11 pages)
es)
s (1 page)
page)
s (41 pages)
e)

HUNT
A-9

A-10
JACK
JOHNSON
s (1 page)
page)
s (14 pages)
e)
s (none)
page)
s (36 pages)
es)
s (1 page)
pages)
s (none)
s (1 page)
s (29 pages)
\page
e)

JONES
KAUFMAN
KENT
LAMAR
A-11
s (1 page)
pages)
s (none)
s (1 page)
s (1 page)
e)
s (25 pages)
e)
s (1 page)
\page
s (16 pages)
e)
s (1 page)
ne)

LAMPASAS
LEE
--Exhibit A-1 - Transmission Route
LEON
A-12
LIMESTONE
tion Plants (none)

Routes (18 pages)
s (1 page)
e)
s (1 page)
s (1 page)
e)
s (1 page)
s (4 pages)
e)
s (1 page)
s (46 pages)
es)
s (1 page)
pages)
tion Plants (none)

LOVING
LYNN
MARTIN
MCLENNAN
Routes (1 page)
\page
s (17 pages)
es)
s (1 page)
pages)
s (30 pages)
e)
s (1 page)
pages)
tion Plants (none)
Routes (1 page)
s (2 pages)
s (34 pages)
e)
s (1 page)
A-13
MIDLAND
MILAM
MILLS
MITCHELL
s (9 pages)
e)
s (1 page)
s (34 pages)
e)
\page
s (1 page)
pages)
s (58 pages)
es)
s (1 page)
pages)
s (21 pages)
e)
s (1 page)
MONTAGUE
NACOGDOCHES
----------Exhibit A-1 - Transmission Route
A-14

NAVARRO
NOLAN
pages)
s (14 pages)
e)
s (1 page)
page)
s (1 page)
s (29 pages)
e)
s (1 page)
page)
s (2 pages)
\page
e)
s (1 page)

PALO PINTO
---------Exhibit A-1 - Transmission Route
PANOLA
PARKER
PECOS
A-15

RAINS
s (5 pages)
e)
s (1 page)
\page
s (1 page)
s (1 page)
s (10 pages)
e)
s (1 page)
s (1 page)
e)
s (1 page)
s (3 pages)
e)
s (none)

A-16
REAGAN
RED RIVER
REEVES
ROBERTSON
page)
s (19 pages)
e)
s (1 page)
s (27 pages)
e)
s (1 page)
page)
\page
tion Plants (none)
Routes (1 page)
s (17 pages)
e)
s (1 page)
pages)

ROCKWALL
RUSK
A-17

SCURRY
SHACKLEFORD
----------Exhibit A-1 - Transmission Route
s (3 pages)
s (1 page)
page)
s (42 pages)
es)
s (1 page)
pages)
tion Plants (none)
Routes (19 pages)
s (3 pages)
s (12 pages)
e)
s (1 page)
\page
page)

SMITH
SOMERVELL
STEPHENS
A-18

STERLING
--------
s (1 page)
s (1 page)
s (98 pages)
ges)
s (1 page)
pages)
tion Plants (3 pages)
\page
s (4 pages)
s (none)
s (1 page)
s (2 pages)
s (2 pages)

TARRANT
Exhibit A-2 - Substations (12 pa
A-19
TAYLOR
TERRY
THROCKMORTON
-----------Exhibit A-1 - Transmission Route
TITUS
s (none)
s (1 page)
s (3 pages)
e)
s (1 page)
s (none)
s (1 page)
s (4 pages)
e)
s (1 page)
\page
s (40 pages)
e)
TOM GREEN
TRAVIS
TRINITY
UPTON
A-20
VAN ZANDT
s (1 page)
page)
s (5 pages)
e)
s (1 page)
page)
s (33 pages)
es)
s (1 page)
pages)
\page
s (none)
s (1 page)
s (28 pages)
es)

WARD
WICHITA
A-21
WILBARGER
WILLIAMSON
---------Exhibit A-1 - Transmission Route
s (1 page)
pages)
s (4 pages)
e)
s (1 page)
s (31 pages)
e)
s (1 page)
page)
s (1 page)
s (1 page)
s (26 pages)
e)
s (1 page)

WINKLER
WISE
WOOD
YOUNG
A-22
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-4 - Facility Sites (2
pages)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A-23
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MODIFICATIONS OF CLASS A MORTGAG
ES
Amend the 1983 Mortgage to
add the following new definitions to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.03:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Authorized Officer" sh
all mean the Chairman of the Board, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice Chairman, the President, an
y Vice President, the Treasurer, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assistant Treasurer, or any othe
r officer, manager or agent of the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duly authorized pursuant to a Re
solution to act in respect of matters
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to this Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Officer's Certificate"
shall mean a certificate signed by an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorized Officer of the Compan
y and delivered to the Trustee. To the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent required by the provision
s of Section 22.05 hereof, each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate shall include the st
atements provided for in such section.
change the term "Officers' Certificate" to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Officer's Certificate" wherever
such term is used and to delete the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql definition of "Officers' Certifi
cate" in Section 1.03.
change subdivision (1) of Section 5.06 to read
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) an Officer's Certificate req
uesting the Trustee to authenticate and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver bonds, specifying the pr
incipal amount of bonds called for, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series thereof and any other mat
ters with respect thereto required by this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture;
change the words "the Resolution provided for in
hereof" to "the Officer's Certificate
of Section 5.06 hereof" wherever such words
in this Indenture to the Resolution
Section 5.06 to an Officer's Certificate.
change the words "its Chairman of the Board,
nt or a Vice-President and its Secretary or
easurer or an Assistant Treasurer" in
.01 to "an Authorized Officer".
change the words "its Chairman of the Board,
nt or one of its Vice-Presidents" in
fficer" and to delete the words "and its
impressed or imprinted and attested by its
t Secretaries, whose signature may be
change the words "the Chairman of the Board,
nt or a Vice-President" to "an Authorized
used.
change the title of Article VI to read as
T OF BONDS PREVIOUSLY
DITIONAL BOND CREDITS
add the following new sections to Article VI
\page
from time to time, upon the written order or
an Authorized Officer, authenticate and deliver
subdivision (1) of Section 5.06

provided for in subdivision (1)
appear and change any references
described in subdivision (1) of
o
Chief Executive Officer, Preside

an Assistant Secretary or its Tr
Sections 4.01, 5.01, 6.01, and 7
o

Section 2.07 to "an Authorized O
corporate seal shall be thereon
Secretary or one of its Assistan
facsimile" in Section 2.07.
o

Officer" wherever such words are
o
follows:
ISSUANCE OF BONDS UPON RETIREMEN
OUTSTANDING HEREUNDER OR UPON AD
o
after Section 6.02:

B-1
Section 6.03. The Trustee shall,

orders of the Company signed by
bonds hereunder of one or more s
eries of a principal amount up to and on the

dits (as defined in subdivision (2) of
e basis of the authentication and delivery of
Valuation Date specified pursuant to
ter the Trustee shall have received:
ovided for in subdivision (1) of
ovided for in subdivision (2) of
ting the amount of Additional Bond
thentication and delivery of the bonds
s and stating that such Additional
the basis of the authentication and
most recent Valuation Date (as defined
of Section 6.04 hereof);
ded for in subdivision (8) of Section
ng the signer's opinion:
s to paving, grading and other
ublic highways, bridges, parks or
us character) this Indenture is,
ng and/or recording in the proper
ments of conveyance, assignment
n said opinion, will be, a lien
perty, subject to no lien thereon
is Indenture, except Qualified
and
extent of any Qualified Liens
basis of any Additional Bond Cre

Section 6.04 hereof) not made th
any bonds after the most recent
Section 6.04 hereof, but only af
(1) the Officer's Certificate pr
Section 5.06 hereof;
(2) the Officer's Certificate pr
Section 5.06 hereof;
(3) an Officer's Certificate sta
Credits made the basis of the au
described in such order or order
Bond Credits have not been made
delivery of any bonds after the
in clause (a) of subdivision (1)
(4) the Opinion of Counsel provi
5.06 hereof;
(5) the Opinion of Counsel stati
(a) to the effect that (except a
improvements to, under or upon p
other public property of analogo
or upon delivery of, and/or fili
places and manner of, the instru
or transfer, if any, specified i
on the Mortgaged and Pledged Pro
prior or equal to the Lien of th
Liens and Excepted Encumbrances;
(b) as to the general nature and
existing upon any Mortgaged and
Pledged Property, and the

standing Qualified Lien Bonds
or other documents, if any, specified
ed for in subdivision (4) of this
tablish or, from time to time, reestablish the
s available hereunder by delivering to the
alue to the Company in the
rtgaged and Pledged Property as
ion Date");
f the Mortgaged and Pledged
e;
le Value hereunder, which amount
er of the amounts stated pursuant
ivision; and
\page
Pledged Property that includes
as "Prior Use Property")(A) that
ate of acquisition thereof by the
by others than the Company in a
h it has been or is to be used or
t has a fair value to the Company
less than 1% of the aggregate
utstanding, and (C) the fair
principal amount of the then Out

secured thereby, if any; and
(6) copies of the certificates,
in the Opinion of Counsel provid
Section.
Section 6.04. The Company may es
amount of Additional Bond Credit
Trustee the following:
(1) an Engineer's Certificate
(a) stating the aggregate fair v
opinion of the signers of the Mo
of a specified date (the "Valuat
(b) stating the aggregate Cost o
Property as of the Valuation Dat
(c) stating the amount of Bondab
shall be equal to 70% of the low
to clauses (a) and (b) this subd
B-2
(d) describing any Mortgaged and

any property (herein referred to
within six months prior to the d
Company, has been used operated
business similar to that in whic
operated by the Company, (B) tha
of not less than $25,000 and not
principal amount of bonds then O
value to the Company of which ha
s not been the subject of an

te previously furnished to the
ting the amount of Additional Bond
shall be equal to the excess on the
of Bondable Value as stated in the
to in subdivision (1) of this Section
regate principal amount of bonds
gate principal amount of any
n the Mortgaged and Pledged Property
ure and the aggregate principal amount
basis for the authentication and
isions of Section 6.01 hereof;
rtificate stating the aggregate fair
ation Date in the opinion of the
described in the accompanying
revise the definition of Funded Property in
ead as follows: "all Mortgaged and
mpany on the most recent Valuation
on 6.04 hereof;"
quired after the most recent Valuation
he words "Property Additions" in
erences thereto, shall be deleted.
add the following to the third paragraph in
ate, any property released from the Lien
Independent Engineer's Certifica

Trustee.
(2) an Officer's Certificate sta
Credits hereunder, which amount
Valuation Date of (a) the amount
Engineer's Certificate referred
6.04 over (b) the sum of the agg
Outstanding hereunder, the aggre
indebtedness secured by a lien o
prior to the Lien of this Indent
of Retired Bonds eligible as the
delivery of bonds under the prov
(3) an Independent Engineer's Ce
value to the Company on the Valu
signer of any Prior Use Property
Engineer's Certificate.
o
Section 1.05 as follows:

Clause (1) shall be revised to r
Pledged Property owned by the Co
Date specified pursuant to Secti
The words "Property Additions ac
Date" shall be substituted for t
clauses (2), (3), (4) and (5).
Clauses (6) and (7), and any ref
o
Section 1.05:
As of and after each Valuation D
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof before such Valuation Dat

e shall no longer be deemed to be Funded
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property retired for purposes of
Section 1.04 hereof. Any property released
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the Lien hereof shall not t
hereafter become subject to the Lien hereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql even if the Company continues to
own such property unless the Company shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver to the Trustee a written
instrument expressly subjecting such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property to the Lien hereof.
change clause (a) of subdivision (2) of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 13.03 to read as follows
:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) that the Company has elected
to release the property described in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accompanying Officer's Certifica
te referred to in subdivision (1) of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 13.03;
add the following to the definition of "Board of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors" in Section 1.01:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B-3
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To the extent that any provision
of this Indenture, including any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenant, condition or condition
precedent, requires that any action
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be taken by the Board of Directo
rs, such provision shall be deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfied and complied with if s
uch action is taken by an Authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer pursuant to authorizatio
n by the Board of Directors.
add the following to the definition of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Resolution" in Section 1.03:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To the extent that any provision
of this Indenture, including any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenant, condition or condition
precedent, requires a Resolution,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such provision shall be deemed s
atisfied and complied with by an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer's Certificate pursuant t
o authorization by the Board of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors.
plain\cf1\f50\fs16\ql Exhibit 4(b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OFFICER'S CERTIFICATE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1-S-1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Establishing the Form and Certai
n Terms of the 6.375%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Secured Notes due 2012 an
d the 7.000% Senior Secured Notes due 2032.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned, Kirk R. Oliver,
Vice President of Oncor Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delivery Company (the "Company")
, (all capitalized terms used herein which are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not defined herein but are defin
ed in the Indenture referred to below, shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the meanings specified in t
he Indenture), pursuant to a Board Resolution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated April 8, 2002 and Sections
201 and 301 of the Indenture, does hereby
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certify to The Bank of New York
(the "Trustee"), as Trustee under the Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Deed of Trust of the Company
dated as of May 1, 2002 (as heretofore
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemented, the "Indenture") t
hat:
The Securities of the f
irst series to be issued under the Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "2012 Notes") shall be init
ially issued in a series designated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "6.375% Senior Secured Notes due
2012," and the Securities of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql second series to be issued under
the Indenture (the "2032 Notes," and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together with the 2012 Notes, th
e "Notes") shall be initially issued in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a series designated "7.000% Seni
or Secured Notes due 2032"; the 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes shall be in substantially
the form set forth in Exhibit A hereto,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the 2032 Notes shall be in s
ubstantially the form set forth in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit B hereto;
The 2012 Notes shall ma
ture and the principal shall be due and payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together with all accrued and un
paid interest thereon on May 1, 2012,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the 2032 Notes shall mature
and the principal shall be due and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable together with all accrue
d and unpaid interest thereon on May 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2032, and the Company shall not
have any right to extend the Maturity

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Notes as contemplated in
Section 301(d) of the Indenture;
The Notes shall bear in
terest as provided in the applicable form
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof set forth in Exhibits A
and B hereto; the Interest Payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dates for the Notes shall be May
1 and November 1 of each year,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commencing November 1, 2002;
Each installment of int
erest on a Note shall be payable as provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the applicable form thereof set
forth as Exhibits A and B hereto; the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall not have any right
to extend any interest payment periods
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the Notes as contemplated in
Section 301(e) of the Indenture;
The principal of, premi
um, if any, and each installment of interest on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Notes shall be payable and r
egistration of transfers and exchanges
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in respect of the Notes may be e
ffected, at the office or agency of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company in The City of New York;
and notices and demands to or upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company in respect of the Notes
may be served at the office or agency
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company in The City of Ne
w York; the Corporate Trust Office of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee will initially be th
e agency of the Company for such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment, registration and regist
ration of transfers and exchanges and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service of notices and demands,
and the Company hereby appoints the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee as its agent for all suc
h purposes; and the Trustee will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql initially be the Security Regist
rar and the Paying Agent for the Notes;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that the Comp
any reserves the right to change, by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one or more Officer's Certificat
es, any such office or agency and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agent.
\page
The Regular Record Date
s for the interest payable on any given Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment Date with respect to the
Notes shall be April 16 for the May 1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date and Octobe
r 17 for the November 1 Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment Date;
The Notes of each serie
s are subject to redemption as provided in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forms thereof set forth in Exhib
its A and B hereto;
The Notes of each serie
s are "Benefitted Securities" and shall have the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of the covenant of the C
ompany contained in Section 707 of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture;
No service charge shall
be made for the registration of transfer or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange of the Notes; provided,
however, that the Company may require
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of a sum sufficient to c
over any tax or other governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charge that may be imposed in co
nnection with the exchange or transfer;
The Notes shall be init
ially issued in global form registered in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name of Cede & Co. (as depositor
y for The Depository Trust Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("DTC"); provided, that the Comp
any reserves the right to provide for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another depository, registered a
s a clearing agency under the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act, to act as depository for th
e global Notes (DTC and any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor depository, the "Depos
itory"); beneficial interests in Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued in global form may not be
exchanged in whole or in part for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individual certificated Notes in
definitive form, and no transfer of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql global Note in whole or in part
may be registered in the name of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person other than the Depository
or its nominee except that (i) if the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depository (A) has notified the
Company that it is unwilling or unable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to continue as depository for th
e global Notes or (B) has ceased to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a clearing agency registered und
er the Exchange Act and, in either
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case, a successor depository for
such global Notes has not been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointed, the Company will exec
ute, and the Trustee, upon receipt of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company Order for the authentica
tion and delivery of definitive Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will authenticate and deliver No
tes in definitive certificated form in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an aggregate principal amount eq
ual to the principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql global Notes representing such N
otes in exchange for such global Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such definitive Notes to be regi
stered in the names provided by the

shall represent and shall be
o the aggregate principal amount of the
ted by such global Note (ii) shall be
pository or its nominee, (iii) shall be
Depository, its nominee, any custodian
pursuant to the Depository's
a legend restricting the transfer of
ther than the Depository or its
e Trustee, any Paying Agent or any
ny responsibility or liability for any
o, or payments made on account of,
n a global Note or for maintaining,
ords relating to such beneficial
n global form will contain restrictions
scribed in the form set forth in
ally issued pursuant to Section 4(2) of the
ed (the "Securities Act"). Each Note,
certificated form, shall bear the
registration rights legend in
in such form, unless otherwise agreed
o be confirmed in writing to the
e, the Notes or this certificate shall
any to register any Notes under the
expressly agreed by the Company,
tee, or to make any transfer of such
law. The Company will enter into a
th the initial purchasers of the Notes
hings, the Notes may be exchanged for
Depository; each global Note (i)

denominated in an amount equal t
outstanding Notes to be represen
registered in the name of the De
delivered by the Trustee to the
for the Depository or otherwise
instruction and (iv) shall bear
such global Note to any person o
nominee; none of the Company, th
Authenticating Agent will have a
aspect of the records relating t
beneficial ownership interests i
supervising or reviewing any rec
ownership interests; the Notes i
on transfer, substantially as de
Exhibit A and Exhibit B hereto;
11.
The Notes will be initi
Securities Act of 1933, as amend

whether in a global form or in a
non-registration legend and the
substantially the form set forth
by the Company, such agreement t
Trustee. Nothing in the Indentur
be construed to require the Comp
Securities Act, unless otherwise
confirmed in writing to the Trus
Notes in violation of applicable
registration rights agreement wi
pursuant to which, among other t
Notes registered under the Secur
ities Act. The Notes registered under

ubstantially the form of Exhibit A,
\page
and Exhibit B, with respect to the 2032
the non-registration legend, the
Certificate of Transfer and the form of
The Trustee, at the request of the
deliver notes registered under the
n equal principal amount of Notes of
red;
beneficial interests in Notes owned by
as defined in Rule 144A under the
to QIBs in reliance upon Rule 144A
represented by one or more separate
stered in the name of Cede & Co., as
for DTC; beneficial interests in Notes
ant to Regulation S under the
by one or more separate certificates
on S Global Certificate") and will be
Co., as registered owner and as
of Euroclear and Cedel Bank; prior to
nitial issuance of the Notes,
tion S Global Certificate may be held
Bank; Notes acquired by Institutional
in Rule 501(a)(1), (2), (3) or (7)
") and other eligible transferees, who
eign purchasers pursuant to Regulation
be in certificated form.
the Securities Act shall be in s
with respect to the 2012 Notes,

Notes, but in each case, without
registration rights legend, the
Accredited Investor Certificate.
Company, shall authenticate and
Securities Act in exchange for a
such series that are not registe
12.
It is contemplated that
qualified institutional buyers (

Securities Act) ("QIBs") or sold
under the Securities Act will be
certificates in global form regi
registered owner and as nominee
sold to foreign purchasers pursu
Securities Act will be evidenced
in global form (each a "Regulati
registered in the name of Cede &
nominee for DTC for the accounts
the 40th day after the date of i
beneficial interests in a Regula
only through Euroclear or Cedel
Accredited Investors (as defined
under the Securities Act) ("IAIs
are not QIBs and who are not for
S under the Securities Act, will
of Notes, the Trustee, the Security
be under no duty to inquire into, may
ness of, and shall be fully protected
and other information (in the forms
d B, for use in connection with the
cated form, or Exhibit C, for use in
beneficial interests in one certificate
icate or to a Note in certificated
m the Holders and any transferees of
, legality and due authorization of any
f the transferee to receive such Note
ances related to such transfer;
ty Registrar and the Company will have no
re for transfers of beneficial
depository records of beneficial
s between the Depository and beneficial
ke any deposit of money and/or Eligible
Notes, or any portion of the principal
by Section 801 of the Indenture, the
icer's Certificate described in clause
id Section 801 unless the Company shall
ether with such Officer's Certificate,
mpany, notwithstanding the satisfaction
s in respect of such Notes, shall
ll be absolute and unconditional) to
stee or Paying Agent such additional
onal Eligible Obligations (meeting the
In connection with any transfer

Registrar and the Company shall
conclusively presume the correct
in relying upon the certificates
attached hereto as Exhibits A an
transfer of the Notes in certifi
connection with the transfer of
in global form to another certif
form, or otherwise) received fro
any Notes regarding the validity
such transfer, the eligibility o
and any other facts and circumst
13.
The Trustee, the Securi
responsibility under the Indentu

interests in the Notes, for any
interests or for any transaction
owners;
14.
If the Company shall ma
Obligations with respect to any

amount thereof, as contemplated
Company shall not deliver an Off
(z) in the first paragraph of sa
also deliver to the Trustee, tog
either:
(A) an instrument wherein the Co
and discharge of its indebtednes
assume the obligation (which sha
irrevocably deposit with the Tru
sums of money, if any, or additi
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of Section 801), if

any, or any combination thereof, at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such time or times, as shall be
necessary, together with the money
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Eligible Obligations ther
etofore so deposited, to pay when due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the principal of and premium, if
any, and interest due and to become
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due on such Notes or portions th
ereof, all in accordance with and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the provisions of sai
d Section 801; provided, however, that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such instrument may state that t
he obligation of the Company to make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional deposits as aforesaid
shall be subject to the delivery to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company by the Trustee of a
notice asserting the deficiency
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accompanied by an opinion of an
independent public accountant of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nationally recognized standing,
selected by the Trustee, showing the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculation thereof; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) an Opinion of Counsel to the
effect that, as a result of a change
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in law occurring after the date
of this certificate, the Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Notes, or portions of the p
rincipal amount thereof, will not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recognize income, gain or loss f
or United States federal income tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes as a result of the sati
sfaction and discharge of the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness in respect thereof
and will be subject to United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal income tax on the same a
mounts, at the same times and in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same manner as if such satisfact
ion and discharge had not been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effected.
The Eligible Obligation
s with respect to the Notes of each series shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be Government Obligations.
So long as the 2012 Not
es and the 2032 Notes are Outstanding, Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 707 of the Indenture shall read
as set forth in Exhibit D hereto.
The 2012 Notes shall ha
ve such other terms and provisions as are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in the form set forth i
n Exhibit A hereto and the 2032 Notes

provisions as are provided in the form
er the Indenture has occurred or is occurring;
d all of the covenants and conditions contained
issuance of the Notes and the
ating thereto and in respect of
ficate is made;
d in this certificate are based upon the
ith the Indenture, the documents
nd upon discussions by the undersigned
he Company familiar with the matters
ndersigned, he has made such examination or
enable him to express an informed
h covenants and conditions have been
ndersigned, such conditions and covenants, and
ovided for in the Indenture (including
ich constitutes a condition precedent)
nd delivery of the Notes requested in
ave been complied with.
\page
ted this Officer's Certificate this 6th
w York.
shall have such other terms and

set forth in Exhibit B hereto;
18.
No Event of Default und
19.
The undersigned has rea
in the Indenture relating to the

definitions in the Indenture rel
compliance with which this certi
20.
The statements containe
familiarity of the undersigned w

accompanying this certificate, a
with officers and employees of t
set forth herein;
21.
In the opinion of the u
investigation as is necessary to
opinion as to whether or not suc
complied with; and
22.
In the opinion of the u
conditions precedent, if any, pr

any covenants compliance with wh
relating to the authentication a
the accompanying Company Order h
IN WITNESS WHEREOF, I have execu

day of May, 2002 in New York, Ne
/s/ Kirk R. Oliver

--------------------------------
--------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Kirk R. Oliver

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Vice President
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [FORM OF 2012 NOTE]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [UNLESS THIS CERTIFICATE IS PRES
ENTED BY AN AUTHORIZED REPRESENTATIVE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO
OR ITS AGENT FOR REGISTRATION OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGISTERED IN THE NAME OF CEDE &
Co. OR IN SUCH OTHER NAME AS IS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REQUESTED BY AN AUTHORIZED REPRE
SENTATIVE OF DTC (AND ANY PAYMENT IS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MADE TO CEDE & CO. OR TO SUCH OT
HER ENTITY AS IS REQUESTED BY AN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AUTHORIZED REPRESENTATIVE OF DTC
), ANY TRANSFER, PLEDGE, OR OTHER USE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [non-registration legend]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "THIS SECURITY HAS NOT BEEN REGI
STERED UNDER THE SECURITIES ACT OF 1933, AS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMENDED (THE "SECURITIES ACT").
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AGREES FOR THE BENEFIT OF THE CO
MPANY THAT THIS SECURITY MAY NOT BE RESOLD,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLEDGED OR OTHERWISE TRANSFERRED
OTHER THAN (A) (1) TO THE COMPANY, (2) IN A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSACTION ENTITLED TO AN EXEMP
TION FROM REGISTRATION PROVIDED BY RULE 144
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNDER THE SECURITIES ACT, (3) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SELLER REASONABLY BELIEVES I
S A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MEANING OF RULE 144A PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CHECKED BY THE TRANSFEROR ON THE

CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITY), (4) IN AN OFFSHORE TR
ANSACTION IN ACCORDANCE WITH RULE 904 OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGULATION S UNDER THE SECURITIE
S ACT (AS INDICATED BY THE BOX CHECKED BY THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), (5)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO AN INSTITUTION THAT IS AN "AC
CREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2), (3) OR (7) UNDER THE SECURI
TIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IS ACQUIRING THIS SECURITY FOR I
NVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A CERTIFICATE IN THE FORM ATTACH
ED TO THIS SECURITY IS DELIVERED BY THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSFEREE TO THE COMPANY AND TH
E TRUSTEE, (6) IN ACCORDANCE WITH ANOTHER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql APPLICABLE EXEMPTION FROM THE RE
GISTRATION REQUIREMENTS OF THE SECURITIES ACT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (AND BASED UPON AN OPINION OF CO
UNSEL ACCEPTABLE TO THE COMPANY) OR (7) PURSUANT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO AN EFFECTIVE REGISTRATION STA
TEMENT UNDER THE SECURITIES ACT AND (B) IN EACH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CASE IN ACCORDANCE WITH ANY APPL
ICABLE SECURITIES LAWS OF EACH STATE OF THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNITED STATES. AN INSTITUTIONAL
ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IT WILL FURNISH TO THE COMPANY A
ND THE TRUSTEE SUCH CERTIFICATES AND OTHER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION AS THEY MAY REASONAB
LY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURCHASING THIS SECURITY, REPRES
ENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THAT IT IS (1) A QUALIFIED INSTI
TUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OR (2) AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE REQUIREMENTS OF PARAGRAPH (o
)(2) OF RULE 902 UNDER, REGULATION S UNDER THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES ACT."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [registration rights legend]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Holder of this Security, by
acceptance hereof, will be deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have agreed to be bound by the p
rovisions of the Registration Rights Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated May 6, 2002, among the Com
pany and the initial purchasers of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NO._______________
CUSIP NO.
2012
a corporation duly organized and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql existing under the laws of the S
tate of Texas (herein referred to as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Company", which term includes a
ny successor Person under the Indenture referred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to below), for value received, h
ereby promises to pay to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or registered assigns, the princ
ipal sum of _____________________ ($_________)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dollars on May 1, 2012, and to p
ay interest on said principal sum semi-annually
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in arrears on May 1 and November
1 of each year commencing November 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (each an "Interest Payment Date"
) at the rate of 6.375% per annum until the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal hereof is paid or made
available for payment. Interest on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series will a
ccrue from and including May 6, 2002, to and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql excluding the first Interest Pay
ment Date, and thereafter will accrue from and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the last Interest Paym
ent Date to which interest has been paid or duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided for. No interest will a
ccrue on the Securities with respect to the day
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on which the Securities mature.
In the event that any Interest Payment Date is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not a Business Day, then payment
of interest payable on such date will be made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the next succeeding day which
is a Business Day (and without any interest or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other payment in respect of such
delay) with the same force and effect as if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made on the Interest Payment Dat
e. The interest so payable, and punctually paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or duly provided for, on any Int
erest Payment Date will, as provided in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, be paid to the Person
in whose name this Security (or one or more

tered at the close of business on the April 16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and October 17 (each a "Regular
Record Date") immediately preceding such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date, except th
at interest payable at Maturity will be payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Person to whom principal
shall be paid. Any such interest not so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql punctually paid or duly provided
for will forthwith cease to be payable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder on such Regular Record Da
te and may either be paid to the Person in whose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name this Security (or one or mo
re Predecessor Securities) is registered at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql close of business on a Special R
ecord Date for the payment of such Defaulted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest to be fixed by the Trus
tee, notice whereof shall be given to Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series not le
ss than 10 days prior to such Special Record
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date, or be paid at any time in
any other lawful manner not inconsistent with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the requirements of any securiti
es exchange on which the Securities of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series may be listed, and upon s
uch notice as may be required by such exchange,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all as more fully provided in th
e Indenture referred to herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment of the principal of (and
premium, if any) and interest at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity on this Security shall
be made upon presentation of this Security at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the office or agency of the Comp
any maintained for that purpose in The City of
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York, in the State of New Yo
rk, in such coin or currency of the United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States of America as at the time
of payment is legal tender for payment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public and private debts; provid
ed, however, that, at the option of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on this Security (other
than interest payable at Maturity) may be paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by check mailed to the address o
f the person entitled thereto, as such address
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall appear on the Security Reg
ister, and provided, further, that if such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person is a securities depositar
y, such payment may be made by such other means
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in lieu of check as shall be agr
eed upon by the Company, the Trustee and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All terms used in this Security
which are defined in the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture shall have the meaning
s assigned to them in the Indenture and in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer's Certificate establishi
ng the terms of the Securities of this series.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Security is one of a duly a
uthorized issue of securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company (herein called the "
Securities"), issued and to be issued in one or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more series under an Indenture a
nd Deed of Trust dated as of May 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (herein, together with any amend
ments or supplements thereto, called the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Indenture", which term shall ha
ve the meaning assigned to it in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument), between the Company
and The Bank of New York, as Trustee (herein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql called the "Trustee", which term
includes any successor trustee under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture), and reference is her
eby made to the Indenture, for a statement of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the property mortgaged, pledged
and held in trust, the nature and extent of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security, the conditions upon wh
ich the Lien of the Indenture may be released
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to the Indenture, Board Reso
lutions and Officer's Certificate creating the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series designated on the face he
reof, for a statement of the respective rights,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitations of rights, duties an
d immunities thereunder of the Company, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee and the Holders of the S
ecurities and of the terms upon which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities are, and are to be, a
uthenticated and delivered. The acceptance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Security shall be deemed to
constitute the consent and agreement by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder thereof to all of the ter
ms and provisions of the Indenture. This
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security is one of the series de
signated on the face hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Security is subject to rede
mption at the election of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, in whole at any time or
in part from time to time, at a redemption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price as calculated by the Compa
ny equal to the greater of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 100% of the principal amount of
the Notes of this series being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sum of the present values of
the remaining scheduled payments of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal and interest on the No
tes of this series being redeemed, discounted to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the redemption date on a semi-an
nual basis (assuming a 360-day year consisting
Treasury Rate plus 25 basis points,
rest on those Notes of this
ect to any redemption date, the
-annual equivalent yield to maturity of the
ing a price for the Comparable Treasury Issue
s principal amount) equal to the Comparable
on date.
s the United States Treasury
dent Investment Banker as having a maturity
of the Notes to be redeemed that would be
on and in accordance with customary financial
of corporate debt securities of comparable
f the Notes.
\page
s, with respect to any redemption
and asked prices for the Comparable Treasury
a percentage of its principal amount) on the
h redemption date, as set forth in the H. 15
rve Bank or (ii) if such release (or any
hed or does not contain prices on such business
er Quotation actually obtained by the Trustee
tistical release entitled "H.15
or any successor publication, published by the
l Reserve System.
of twelve 30-day months) at the

plus, in each case, accrued inte
series to the redemption date.
"Treasury Rate" means, with resp
rate per annum equal to the semi
Comparable Treasury Issue, assum
(expressed as a percentage of it
Treasury Price for such redempti
"Comparable Treasury Issue" mean
security selected by the Indepen
comparable to the remaining term
utilized, at the time of selecti
practice, in pricing new issues
maturity to the remaining term o
A-3
"Comparable Treasury Price" mean

date, (i) the average of the bid
Issue (expressed in each case as
third business day preceding suc
Daily Update of the Federal Rese
successor release) is not publis
day, the Reference Treasury Deal
for such redemption date.
"H.15(519)" means the weekly sta
(519) Selected Interest Rates",
Board of Governors of the Federa
"H.15 Daily Update" means the da
ily update of H.15(519) available

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through the worldwide website of
the Board of Governors of the Federal Reserve
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System or any successor site or
publication.
means the Reference Treasury
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dealer appointed by the Company.
s Lehman Brothers Inc., and its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successors; provided, however, t
hat if the foregoing shall cease to be a primary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql U.S. Government securities deale
r in New York City (a "Primary Treasury
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dealer"), the Company shall subs
titute therefor another Primary Treasury Dealer.
tion" means, with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reference Treasury Dealer and an
y redemption date, the average, as determined by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee, of the bid and aske
d prices for the Comparable Treasury Issue
h redemption date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notice of redemption (other than
at the option of the Holder)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be given by mail to Holder
s of Securities, not less than 30 days prior to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date fixed for redemption, a
ll as provided in the Indenture. As provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Indenture, notice of redempt
ion at the election of the Company as aforesaid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may state that such redemption s
hall be conditional upon the receipt by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable Paying Agent or Agent
s of money sufficient to pay the principal of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and premium, if any, and interes
t, if any, on this Security on or prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date fixed for such redemption;
a notice of redemption so conditioned shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of no force or effect if such mo
ney is not so received and, in such event, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall not be required to
redeem this Security.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event of redemption of th
is Security in part only, a new
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security or Securities of this s
eries of like tenor representing the unredeemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion hereof shall be issued i
n the name of the Holder hereof upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Indenture contains provision
s for defeasance at any time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the entire indebtedness of this
Security upon compliance with certain conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in the Indenture.
s for release of the Lien thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon compliance with certain con
ditions set forth therein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If an Event of Default with resp
ect to Securities of this series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall occur and be continuing, t
he principal of the Securities of this series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be declared due and payable
in the manner and with the effect provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Indenture.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Indenture permits, with cert
ain exceptions as therein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, the amendment thereof
and the modification of the rights and
he rights of the Holders of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each series to be affected under
the Indenture at any time by the Company and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee with the consent of
the Holders of a majority in principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities at the time Outst
anding of all series to be affected. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture also contains provisio
ns permitting the Holders of specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentages in principal amount
of the Securities of each series at the time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding, on behalf of the Ho
lders of all Securities of such series, to waive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance by the Company with c
ertain provisions of the Indenture and certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql past defaults under the Indentur
e and their consequences. Any such consent or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver by the Holder of this Sec
urity shall be conclusive and binding upon such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder and upon all future Holde
rs of this Security and of any Security issued
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the registration of transfe
r hereof or in exchange herefor or in lieu
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, whether or not notation
of such consent or waiver is made upon this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As provided in and subject to th
e provisions of the Indenture,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Holder of this Security shal
l not have the right to institute any proceeding

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the Indenture or
for the appointment of a receiver or trustee or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any other remedy thereunder,
unless such Holder shall have previously given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee written notice of a
continuing Event of Default with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series, the H
olders of a majority in aggregate principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the Securities of all
series at the time Outstanding in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which an Event of Default shall
have occurred and be continuing shall have made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written request to the Trustee t
o institute proceedings in respect of such Event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default as Trustee and offere
d the Trustee reasonable indemnity, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall not have received
from the Holders of a majority in aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of Securities o
f all series at the time Outstanding in respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of which an Event of Default sha
ll have occurred and be continuing a direction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inconsistent with such request,
and shall have failed to institute any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding, for 60 days after re
ceipt of such notice, request and offer of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnity. The foregoing shall n
ot apply to any suit instituted by the Holder of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Security for the enforcemen
t of any payment of principal hereof or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premium or interest hereon on or
after the respective due dates expressed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No reference herein to the Inden
ture and no provision of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security or of the Indenture sha
ll alter or impair the obligation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, which is absolute and u
nconditional, to pay the principal of and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premium and interest on this Sec
urity at the times, place and rate, and in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql coin or currency, herein prescri
bed.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Securities of this series ar
e issuable only in registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form without coupons in denomina
tions of $1,000 and integral multiples of $1,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in excess thereof. As provided i
n the Indenture and subject to certain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitations therein and herein s
et forth, Securities of this series are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchangeable for a like aggregat
e principal amount of Securities of this series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and of like tenor and of authori
zed denominations, as requested by the Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrendering the same.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No service charge shall be made

for any such registration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer or exchange, but the Co
mpany may require payment of a sum sufficient to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cover any tax or other governmen
tal charge payable in connection therewith.
d to execute and the Security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrar shall not be required
to register the transfer of or exchange of (a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series during
a period of 15 days immediately preceding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date notice is given identifying
the serial numbers of the Securities of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series called for redemption or
(b) any Security so selected for redemption in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whole or in part, except the unr
edeemed portion of any Security being redeemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in part. The Company shall not b
e required to make transfers or exchanges of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series for a
period of 15 days next preceding an Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment Date.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company, the Trustee and any
agent of the Company or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee may treat the Person in
whose name this Security is registered as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql absolute owner hereof for all pu
rposes, whether or not this Security be overdue,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and neither the Company, the Tru
stee nor any such agent shall be affected by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice to the contrary.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Holder shall be deemed to u
nderstand that the offer and sale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Securities of this series
have not been registered under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act and that the Securities of t
his series may not be offered or sold except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted in the following sente
nce. Each Holder shall be deemed to agree, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its own behalf and on behalf of
any accounts for which it is acting as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinafter stated, that if such
Holder sells any Securities of this series,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Holder will do so only (A)
to the Company, (B) to a person whom it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably believes is a "qualif
ied institutional buyer" within the meaning of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rule 144A under the Securities A
ct that purchases for its own account or for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account of a qualified instituti
onal buyer to whom notice is given that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resale, pledge or transfer is be

ing made in reliance on Rule 144A, (C) to an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql institutional "accredited invest
or" (as defined in Rule 501(a)(1), (2), (3) or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (7) under the Securities Act) th
at, prior to such transfer, furnishes to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee a signed letter containi
ng certain representations and agreements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to the restrictions on
transfer of the Securities of this series, (D)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in an offshore transaction in ac
cordance with Rule 904 of Regulation S under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act, (E) pursuant to
the exemption from registration provided by Rule
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 144 under the Securities Act (if
available), or (F) pursuant to an effective
Securities Act, and each Holder is further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to agree to provide to an
y person purchasing any of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this series from it a notice adv
ising such purchaser that resales of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series are re
stricted as stated herein.
nderstand that, on any proposed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resale of any Securities of this
series pursuant to the exemption from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration under Rule 144 unde
r the Securities Act, any Holder making any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed resale will be required
to furnish to the Trustee and Company such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certifications, legal opinions a
nd other information as the Trustee and Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may reasonably require to confir
m that the proposed sale complies with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing restrictions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Security shall be governed
by and construed in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the laws of the State of Ne
w York (including without limitation Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5-1401 of the New York General O
bligations Law or any successor to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statute), except to the extent t
hat the Trust Indenture Act shall be applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and except to the extent that th
e laws of the State of Texas shall mandatorily
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql govern.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As provided in the Indenture, no
recourse shall be had for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of the principal of or p
remium, if any, or interest on any Securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any part thereof, or for any
claim based thereon or otherwise in respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, or of the indebtedness
represented thereby, or upon any obligation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenant or agreement under the
Indenture, against, and no personal liability

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whatsoever shall attach to, or b
e incurred by, any incorporator, stockholder,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql member, officer or director, as
such, past, present or future of the Company or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any predecessor or successor
corporation (either directly or through the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or a predecessor or succ
essor corporation), whether by virtue of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutional provision, statut
e or rule of law, or by the enforcement of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assessment or penalty or otherwi
se; it being expressly agreed and understood
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the Indenture and all the S
ecurities are solely corporate obligations and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that any such personal liability
is hereby expressly waived and released as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition of, and as part of the
consideration for, the execution of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and the issuance of th
e Securities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless the certificate of authen
tication hereon has been executed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Trustee referred to herei
n by manual signature, this Security shall not
the Indenture or be valid or obligatory for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the Company
has caused this instrument to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duly executed in New York, New Y
ork.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:_____________________________
_________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [FORM OF CERTIFICATE OF AUTHENTI
CATION]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CERTIFICATE OF AUTHENTICATION
ned Indenture.
_________
\page
2012
ned sells, assigns and transfers unto
OTHER
t be printed or typewritten.
ny and does hereby irrevocably constitute and
the books of the within-named Company, with
e premises.
aid Security is being resold, pledged or
: (check one)
dersigned reasonably believes is a qualified
eaning of Rule 144A under the
ed (the "Securities Act") purchasing
ccount of a qualified institutional
at the resale, pledge or other transfer
Dated:
THE BANK OF NEW YORK, as Trustee
By:_____________________________
A-7
[CERTIFICATE OF TRANSFER]
6.375% Senior Secured Notes due
FOR VALUE RECEIVED, the undersig
PLEASE INSERT SOCIAL SECURITY OR
IDENTIFYING NUMBER OF ASSIGNEE
Name and address of assignee mus
the within Security of the Compa

appoint
to transfer the said Security on
full power of substitution in th
The undersigned certifies that s
otherwise transferred as follows
/ /
to the Company;
/ /
to a Person whom the un
institutional buyer within the m

for its own account or for the a
buyer to whom notice is given th
is being made in reliance on Rul
e 144A;
ion in accordance with Rule 904 of Regulation
is an "accredited investor" as defined in Rule
the Securities Act that is acquiring
poses and not for distribution; (attach
Certificate in the form annexed signed
transferee)
by the non-registration legend appearing on
the Company, confirmed in writing to the
-----------------------------------------\par\pard\plain\fs16
\page
TIFICATE]
purchase of 6.375% Senior Secured Notes due
by Oncor Electric Delivery Company ("Issuer"),
e Offering Memorandum (the
to the Senior Notes and such other
in order to make our investment
have read and agree to the matters
/ /
in an offshore transact
S under the Securities Act;

/ /
to an institution that
501(a)(1), (2), (3) or (7) under

this Security for investment pur
a copy of an Accredited Investor
by an authorized officer of the
/ /
as otherwise permitted
this Security; or
/ /
as otherwise agreed by
Trustee, as follows: [describe]

Dated:
--------------------------------
A-8
[FORM OF ACCREDITED INVESTOR CER
[Transferor Name and Address]

Ladies and Gentlemen:
In connection with our proposed
2012 (the "Senior Notes") issued
we confirm that:
1. We have received a copy of th
"Offering Memorandum") relating
information as we deem necessary
decision. We acknowledge that we
stated under the caption NOTICE
TO INVESTORS in such Offering

on duplication or circulation of, or
ering Memorandum.
uent transfer of the Senior
rictions and conditions set forth in
Notes (the "Indenture") and that any
r Notes is subject to certain
forth under NOTICE TO INVESTORS in the
rsigned agrees to be bound by, and not
ransfer the Senior Notes except in
s and conditions and the Securities Act
Act").
and sale of the Senior Notes
he Securities Act, and that the Senior
except as permitted in the following
ehalf and on behalf of any accounts for
er stated, that if we sell any Senior
the Company, (B) to a person whom we
ed institutional buyer" within the
ecurities Act that purchases for its
f a qualified institutional buyer to
sale, pledge or transfer is being made
an institutional "accredited investor"
o such transfer, furnishes to the
ture) a signed letter containing
ements relating to the restrictions on
bstantially in the form of this
saction in accordance with Rule 904 of
s Act, (E) pursuant to the exemption
Memorandum, and the restrictions

disclosure relating to, such Off
2. We understand that any subseq
Notes is subject to certain rest
the Indenture relating to Senior
subsequent transfer of the Senio
restrictions and conditions set
Offering Memorandum and the unde
to resell, pledge or otherwise t
compliance with such restriction
of 1933, as amended ("Securities
3. We understand that the offer
have not been registered under t
Notes may not be offered or sold
sentence. We agree, on our own b
which we are acting as hereinaft
Notes, we will do so only (A) to
reasonably believe is a "qualifi
meaning of Rule 144A under the S
own account or for the account o
whom notice is given that the re
in reliance on Rule 144A, (C) to
(as defined below) that, prior t
Trustee (as defined in the Inden
certain representations and agre
transfer of the Senior Notes (su
letter), (D) in an offshore tran
Regulation S under the Securitie
from registration provided by Ru
le 144 under the Securities Act (if

th another applicable exemption from
the Securities Act, or (G) pursuant to
ent under the Securities Act, and we
person purchasing any of the Senior
such purchaser that resales of the
tated herein.
oposed resale of any Senior
nish to the Trustee and Issuer such
nd other information as the Trustee and
confirm that the proposed sale
\page
rictions. We further understand that
will bear a legend to the foregoing
edited investor" (as defined
7) of Regulation D under the Securities
experience in financial and business
uating the merits and risks of our
and we and any accounts for which are
economic risk of our or its
otes purchased by us for our
ccounts (each of which is an
or") as to each of which we exercise
are entitled to rely upon this letter
o produce this letter or a copy hereof to any
available), (F) in accordance wi

the registration requirements of
an effective registration statem
further agree to provide to any
Notes from us a notice advising
Senior Notes are restricted as s
4. We understand that, on any pr
Note, we will be required to fur
certifications, legal opinions a
Issuer may reasonably require to
A-9
complies with the foregoing rest

the Senior Notes purchased by us
effect.
5. We are an institutional "accr
in Rule 501(a)(1), (2), (3) or (
Act) and have such knowledge and
matters as to be capable of eval
investment in the Senior Notes,
acting are each able to bear the
investment.
6. We are acquiring the Senior N
own account or for one or more a
institutional "accredited invest
sole investment discretion.
You, the Issuer and the Trustee
and are irrevocably authorized t
rative or legal proceeding or official inquiry
red hereby.
\page
CO. OR IN SUCH OTHER NAME AS IS
STERED UNDER THE SECURITIES ACT OF 1933, AS
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
MPANY THAT THIS SECURITY MAY NOT BE RESOLD,
OTHER THAN (A) (1) TO THE COMPANY, (2) IN A
TION FROM REGISTRATION PROVIDED BY RULE 144
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM
interested party in any administ

with respect to the matters cove
Very truly yours,
By:___________________________
Name:
Title:
A-10
Exhibit B
[FORM OF 2032 NOTE]
[UNLESS THIS CERTIFICATE IS PRES
OF THE DEPOSITORY TRUST COMPANY,
TRANSFER, EXCHANGE, OR PAYMENT,
REGISTERED IN THE NAME OF CEDE &
REQUESTED BY AN AUTHORIZED REPRE
MADE TO CEDE & CO. OR TO SUCH OT
AUTHORIZED REPRESENTATIVE OF DTC
HEREOF FOR VALUE OR OTHERWISE BY
AS THE REGISTERED OWNER HEREOF,
[non-registration legend]
"THIS SECURITY HAS NOT BEEN REGI
AMENDED (THE "SECURITIES ACT").
AGREES FOR THE BENEFIT OF THE CO
PLEDGED OR OTHERWISE TRANSFERRED
TRANSACTION ENTITLED TO AN EXEMP
UNDER THE SECURITIES ACT, (3) SO
PURSUANT TO RULE 144A UNDER THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SELLER REASONABLY BELIEVES I

S A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MEANING OF RULE 144A PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITY), (4) IN AN OFFSHORE TR
ANSACTION IN ACCORDANCE WITH RULE 904 OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGULATION S UNDER THE SECURITIE
S ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFER ON THE REVERSE OF THIS SECURITY), (5)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO AN INSTITUTION THAT IS AN "AC
CREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2), (3) OR (7) UNDER THE SECURI
TIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IS ACQUIRING THIS SECURITY FOR I
NVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A CERTIFICATE IN THE FORM ATTACH
ED TO THIS SECURITY IS DELIVERED BY THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSFEREE TO THE COMPANY AND TH
E TRUSTEE, (6) IN ACCORDANCE WITH ANOTHER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql APPLICABLE EXEMPTION FROM THE RE
GISTRATION REQUIREMENTS OF THE SECURITIES ACT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (AND BASED UPON AN OPINION OF CO
UNSEL ACCEPTABLE TO THE COMPANY) OR (7) PURSUANT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO AN EFFECTIVE REGISTRATION STA
TEMENT UNDER THE SECURITIES ACT AND (B) IN EACH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CASE IN ACCORDANCE WITH ANY APPL
ICABLE SECURITIES LAWS OF EACH STATE OF THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNITED STATES. AN INSTITUTIONAL
ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IT WILL FURNISH TO THE COMPANY A
ND THE TRUSTEE SUCH CERTIFICATES AND OTHER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION AS THEY MAY REASONAB
LY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURCHASING THIS SECURITY, REPRES
ENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THAT IT IS (1) A QUALIFIED INSTI
TUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OR (2) AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITY FOR INVESTMENT PURPOSES

AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE REQUIREMENTS OF PARAGRAPH (o
)(2) OF RULE 902 UNDER, REGULATION S UNDER THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES ACT."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [registration rights legend]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Holder of this Security, by
acceptance hereof, will be deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have agreed to be bound by the p
rovisions of the Registration Rights Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated May 6, 2002, among the Com
pany and the initial purchasers of this
CUSIP NO.
2032
ipal sum of _____________________ ($_________)

tered at the close of business on April 16 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql October 17 (each a "Regular Reco
rd Date") immediately preceding such Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment Date, except that intere
st payable at Maturity will be payable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person to whom principal shall b
e paid. Any such interest not so punctually paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or duly provided for will forthw
ith cease to be payable to the Holder on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regular Record Date and may eith
er be paid to the Person in whose name this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security (or one or more Predece
ssor Securities) is registered at the close of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business on a Special Record Dat
e for the payment of such Defaulted Interest to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be fixed by the Trustee, notice
whereof shall be given to Holders of Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this series not less than 10
days prior to such Special Record Date, or be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid at any time in any other la
wful manner not inconsistent with the
xchange on which the Securities of this series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be listed, and upon such not
ice as may be required by such exchange, all as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more fully provided in the Inden
ture referred to herein.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public and private debts, provid
interest on this Security (other

by check mailed to the address o
shall appear on the Security Reg
person is a securities depositar
in lieu of check as shall be agr
person.
All terms used in this Security
Indenture shall have the meaning
Officer's Certificate establishi
This Security is one of a duly a
the Company (herein called the "
more series under an Indenture a
(herein, together with any amend
"Indenture", which term shall ha
instrument), between the Company
called the "Trustee", which term
Indenture), and reference is her
the property mortgaged, pledged
security, the conditions upon wh
and to the Indenture, Board Reso
series designated on the face he
limitations of rights, duties an
Trustee and the Holders of the S
Securities are, and are to be, a
this Security shall be deemed to
Holder thereof to all of the ter
Security is one of the series de
This Security is subject to rede
Company, in whole at any time or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price equal to the greater of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 100% of the principal amount of
the Notes of this series being redeemed, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sum of the present values of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal and interest on the No
tes of this series being redeemed, discounted to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the redemption date on a semi-an
nual basis (assuming a 360-day year consisting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of twelve 30-day months) at the
Treasury Rate plus 30 basis points,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plus, in each case, accrued inte
rest on those Notes of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series to the redemption date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Treasury Rate" means, with resp
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate per annum equal to the semi
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Comparable Treasury Issue, assum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (expressed as a percentage of it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasury Price for such redempti
on date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Comparable Treasury Issue" mean
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security selected by the Indepen
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comparable to the remaining term
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utilized, at the time of selecti
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practice, in pricing new issues
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity to the remaining term o
f the Notes.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date, (i) the average of the bid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Issue (expressed in each case as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Daily Update of the Federal Rese
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor release) is not publis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql day, the Reference Treasury Deal

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for such redemption date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (519) Selected Interest Rates",
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Governors of the Federa
l Reserve System.
publication.
h redemption date.

\page

bed.

\page
nderstand that the offer and sale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Securities of this series
have not been registered under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act and that the Securities of t
his series may not be offered or sold except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted in the following sente
nce. Each Holder shall be deemed to agree, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its own behalf and on behalf of
any accounts for which it is acting as

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinafter stated, that if such
Holder sells any Securities of this series,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Holder will do so only (A)
to the Company, (B) to a person whom it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably believes is a "qualif
ied institutional buyer" within the meaning of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rule 144A under the Securities A
ct that purchases for its own account or for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account of a qualified instituti
onal buyer to whom notice is given that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resale, pledge or transfer is be
ing made in reliance on Rule 144A, (C) to an
or" (as defined in Rule 501(a)(1), (2), (3) or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (7) under the Securities Act) th
at, prior to such transfer, furnishes to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee a signed letter containi
ng certain representations and agreements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to the restrictions on
transfer of the Securities of this series, (D)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in an offshore transaction in ac
cordance with Rule 904 of Regulation S under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act, (E) pursuant to
the exemption from registration provided by Rule
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 144 under the Securities Act (if
available), or (F) pursuant to an effective
Securities Act, and each Holder is further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to agree to provide to an
y person purchasing any of the Securities of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this series from it a notice adv
ising such purchaser that resales of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series are re
stricted as stated herein.
nderstand that, on any proposed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resale of any Securities of this
series pursuant to the exemption from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration under Rule 144 unde
r the Securities Act, any Holder making any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed resale will be required
to furnish to the Trustee and Company such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certifications, legal opinions a
nd other information as the Trustee and Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may reasonably require to confir
m that the proposed sale complies with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing restrictions.
e Securities.
\page
ork.
________
CATION]
ned Indenture.
________
\page
2032
OTHER
ny and does hereby irrevocably constitute and
the books of the within-named Company, with
e premises.
aid Security is being resold, pledged or
: (check one)
[FORM OF CERTIFICATE OF AUTHENTI

CERTIFICATE OF AUTHENTICATION
This is one of the Securities of
referred to in the within-mentio
Dated:
By:_____________________________
B-7
[CERTIFICATE OF TRANSFER]
7.000% Senior Secured Notes due
FOR VALUE RECEIVED, the undersig
PLEASE INSERT SOCIAL SECURITY OR
IDENTIFYING NUMBER OF ASSIGNEE
Name and address of assignee mus
the within Security of the Compa

appoint
to transfer the said Security on
full power of substitution in th
The undersigned certifies that s
otherwise transferred as follows
/ /
to the Company;
/ /

e 144A;
transferee)
-----------------------------------------\par\pard\plain\fs16
\page
TIFICATE]
purchase of 7.000% Senior Secured Notes due
by Oncor Electric Delivery Company ("Issuer"),

/ /

/ /
501(a)(1), (2), (3) or (7) under

/ /
this Security; or
/ /
Dated:
--------------------------------
B-8

2032 (the "Senior Notes") issued
we confirm that:
ering Memorandum.
Act").


with another applicable exemption from
the Securities Act, and we further
urchasing any of the Senior Notes from
ser that resales of the Senior Notes
nish to the Trustee and Issuer such
\page

available), or (F) in accordance
agree to provide to any person p
us a notice advising such purcha
are restricted as stated herein.
Note, we will be required to fur
effect.
B-9

in Rule 501(a)(1), (2), (3) or (
Act) and have such knowledge and
matters as to be capable of eval
investment in the Senior Notes,
acting are each able to bear the
investment.
6. We are acquiring the Senior N
own account or for one or more a
institutional "accredited invest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sole investment discretion.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql You, the Issuer and the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and are irrevocably authorized t
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interested party in any administ
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the matters cove
red hereby.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Very truly yours,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:___________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title:
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT C
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CERTIFICATE OF TRANSFER]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql __% Senior Secured Notes due ___
_
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR VALUE RECEIVED, the undersig
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLEASE INSERT SOCIAL SECURITY OR
OTHER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IDENTIFYING NUMBER OF ASSIGNEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name and address of assignee mus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $-----------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of beneficial i
nterest in the referenced Security of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and does hereby irrevoca
bly constitute and appoint
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to transfer the said beneficial
interest in such Security, with full power of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substitution in the premises.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned certifies that s
aid beneficial interest in said Security is
se transferred as follows: (check one)
e 144A;
transferee)
__
te which are defined in the
Security was issued shall have the meanings
e.
\page
TIFICATE]
being resold, pledged or otherwi

/ /
to the Company;
/ /

/ /

/ /
501(a)(1), (2), (3) or (7) under

/ /
this Security; or
/ /
Dated:__________________________
All terms used in this certifica
Indenture pursuant to which said
assigned to them in the Indentur
C-1
purchase of __% Senior Secured Notes due ___
ncor Electric Delivery Company ("Issuer"), we
ering Memorandum.
Act").

(the "Senior Notes") issued by O
confirm that:
th another applicable exemption from
the Securities Act, or (G) pursuant to
ent under the Securities Act, and we
person purchasing any of the Senior
such purchaser that resales of the
tated herein.
rnish to the Trustee and Issuer such
\page

available), (F) in accordance wi
an effective registration statem
further agree to provide to any
Notes from us a notice advising
Senior Notes are restricted as s
Notes, we will be required to fu
effect.
C-2

in Rule 501(a)(1), (2), (3) or (
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act) and have such knowledge and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters as to be capable of eval
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment in the Senior Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acting are each able to bear the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. We are acquiring the Senior N
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql own account or for one or more a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sole investment discretion.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql You, the Issuer and the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and are irrevocably authorized t
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interested party in any administ
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the matters cove
red hereby.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:__________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C-3
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT D
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 707. Limitation on Sec
ured Debt.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Except as otherwise specifie
d as contemplated by Section 301
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Securities of any series, so
long as any Securities of any series are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outstanding, the Company shall n
ot issue any Secured Debt (other than Permitted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Debt), without the conse
nt of the Holders of a majority in principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of all the Outstanding Se
curities of all series and Tranches with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which this covenant is specif
ied as contemplated by Section 301 (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Benefitted Securities"), consid
ered as one class, except as expressly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated in subsections (b)
and (c) of this Section.

(a) shall not prohibit the
ured Debt if either:
tive provision whereby the
ecured at least equally and
or
o the Trustee bonds, notes
ss secured by the Lien which
nafter called "Secured
e principal amount equal to the
ch series then Outstanding, (ii)
ndatory redemption) on the Stated
ii) containing, in addition to
ons applicable to all Secured
ch Lien and any mandatory
therein pursuant to clause (ii)
isions correlative to the
atory redemption (pursuant to a
e Securities of such series or
e option of the Holder, as well
emption upon an acceleration of
Securities of such series
uch mandatory redemption to be
such acceleration); it being
ecured Obligations (x) may, but
, but need not, contain
ereof at the option of the
e made at a redemption price or
al amount thereof and (z) shall
(b) The provisions of subsection

creation or existence of any Sec
(i) the Company shall make effec
Benefitted Securities shall be s
ratably with such Secured Debt;
(ii) the Company shall deliver t
or other evidences of indebtedne
secures such Secured Debt (herei
Obligations") (i) in an aggregat
aggregate principal amount of ea
maturing (or being subject to ma
Maturities of such series and (i
any mandatory redemption provisi
Obligations outstanding under su
redemption provisions contained
above, mandatory redemption prov
provisions, if any, for the mand
sinking fund or otherwise) of th
for the redemption thereof at th
as a provision for mandatory red
the maturity of all Outstanding
following an Event of Default (s
rescinded upon the rescission of
expressly understood that such S
need not, bear interest, (y) may
provisions for the redemption th
issuer, any such redemption to b
prices not less than the princip
enefit of the Holders of all
ime to time Outstanding subject
ating to surrender to the
voting, application of payments
her matters as shall be set forth
eto specifically providing for
uch Secured Obligations.
ither of the alternatives
Company shall deliver to the Trustee:.
this Indenture (i)
riate inter-creditor
ture shall be secured by the Lien
ually and ratably with all other
n or (ii) providing for the
ed Obligations;
) stating that, to the
Event of Default has occurred
nt has occurred and is continuing
\page
under such Lien to accelerate
outstanding thereunder and (y)
amount of indebtedness issuable,
under and secured by such Lien;
if the Outstanding
are to be secured by such Lien,
s then Outstanding are entitled
be held by the Trustee for the b

Securities of such series from t
to such terms and conditions rel
Company, transfer restrictions,
of principal and interest and ot
in an indenture supplemental her
the delivery to the Trustee of s
(c) If the Company shall elect e
described in subsection (b), the
(i) an indenture supplemental to
together with evidence of approp
arrangements, whereby this Inden
referred to in subsection (b) eq
indebtedness secured by such Lie
delivery to the Trustee of Secur
(ii) an Officer's Certificate (i
knowledge of the signer, (x) no
and is continuing and (y) no eve
D-1
which entitles the secured party

the maturity of the indebtedness
stating the aggregate principal
and then proposed to be issued,
(iii) an Opinion of Counsel (i)
Securities under this Indenture
to the effect that all Securitie
lly and ratably with all other
by such Lien or (ii) if Secured
to the Trustee, to the effect
ve been duly issued under such
tions, entitled to the benefit of
th all other indebtedness then
.
, except as otherwise expressly
therwise requires:
Person, means (A)
borrowed money evidenced by a
ritten instrument or agreement by
o repay such borrowed money, (B)
ny such indebtedness of another
Lease Liabilities of the Company.
ther things, (w) indebtedness of
t sale or conditional sale
relating to indebtedness for the
rty or services, (x) any trade
s under power or other commodity
es or derivatives associated
of such Person in the ordinary
ons of such Person under any
italized Lease Liabilities, or
ess, neither assumed nor
which it customarily pays
ate or rights in or relating to
any for substation, transmission
ibution line or right of way
to the benefit of such Lien equa

indebtedness outstanding secured
Obligations are to be delivered
that such Secured Obligations ha
Lien and constitute valid obliga
such Lien equally and ratably wi
outstanding secured by such Lien
(d) For purposes of this Section
provided or unless the context o
(i) "DEBT", with respect to any
indebtedness of such Person for
bond, debenture, note or other w
which such Person is obligated t
any guaranty by such Person of a
Person, and (C) any Capitalized
"Debt" does not include, among o
such person under any installmen
agreement or any other agreement
deferred purchase price of prope
obligation (including obligation
purchase agreements and any hedg
therewith), or other obligations
course of business, (y) obligati
lease agreement that are not Cap
(z) any Liens securing indebtedn
guaranteed by the Company nor on
interest, existing upon real est
real estate acquired by the Comp
line, transportation line, distr
ans, as of any particular
issued prior to the
ess than one year from
rrence thereof and is not
issuer; and any refundings,
of any such Secured Debt by
ch matures less than one
ding, refinancing and/or
e at the option of the
hase Money Liens or any
pon property at the time of,
0) days after, the
ny, and any refundings,
of any such Secured Debt;
Purchase Money Lien or other
y property of the Company
cquired and improvements,
property and renewals,
\page
f or for such property or
i) with respect to Purchase
equently acquired by the
ernmental obligations
purposes.
(ii) "PERMITTED SECURED DEBT" me
time, any of the following:
(A) Class A Bonds and Securities
Release Date;
(B) Secured Debt which matures l
the date of the issuance or incu
extendible at the option of the
refinancings and/or replacements
or with similar Secured Debt whi
year from the date of such refun
replacement and is not extendibl
issuer;
(C) Secured Debt secured by Purc
other Liens existing or placed u
or within one hundred eighty (18
refinancings and/or replacements
provided, however, that no such
Lien shall extend to or cover an
other than (i) the property so a
extensions and additions to such
D-2
replacements and substitutions o

any part or parts thereof and (i
Money Liens, other property subs
Company;
(D) Secured Debt relating to gov
luded in gross income for
on pursuant to Section 103
1986, as amended (or any
the purpose of financing or
, costs of acquisition or
sed by the Company, to the
es such Secured Debt is
w or by the issuer of such
therwise necessary in order
clusion from gross income;
and/or replacements of any
ilar Secured Debt;
lated to the
roperty not previously
ch is related to the
the development or
pany and (iii) in either
which has no recourse to the
ompany other than the
with the proceeds of such
ced with the proceeds of
s of such property or such
financings and/or
by or with Secured Debt
and
Secured Debt described
, Secured Debt not otherwise
in an aggregate principal
of 10% of the Company's Net
the interest on which is not inc

purpose of federal income taxati
of the Internal Revenue Code of
successor provision of law), for
refinancing, in whole or in part
construction of property to be u
extent that the Lien which secur
required either by applicable la
governmental obligations or is o
to establish or maintain such ex
and any refundings, refinancings
such Secured Debt by or with sim
(E) Secured Debt (i) which is re
construction or acquisition of p
owned by the Company or (ii) whi
financing of a project involving
expansion of property of the Com
case, the obligee in respect of
Company or any property of the C
property constructed or acquired
transaction or the project finan
such transaction (or the proceed
project); and any refundings, re
replacements of any Secured Debt
described in clause (iii) above;
(F) in addition to the Permitted
in clauses (A) through (E) above
so permitted in this Section 707
amount not exceeding the greater
lization.
of all the following
in, the Company's
) liabilities for
12 months from the date of
tock, common stock expense,
income or loss, preferred
on common stock and
oregoing may be designated),
e deducted, the cost of
stock held in the Company's
shall be determined in
ed accounting principles and
of business in which the
etermined as of the date not
appening of the event for
made.
means the amount, if
Company's unconsolidated
ases of electric
operty not owned by the
etermined in accordance with
inciples and practices
ss in which the Company is
\page
amount shown as total
Tangible Assets or 10% of Capita

"CAPITALIZATION" means the total
items appearing on, or included
unconsolidated balance sheet; (i
indebtedness maturing more than
determination, and (ii) common s
accumulated other comprehensive
stock, preference stock, premium
retained earnings (however the f
less, to the extent not otherwis
shares of the Company's capital
treasury, if any. Capitalization
accordance with generally accept
practices applicable to the type
Company is engaged, and may be d
more than 60 days prior to the h
which the determination is being
"CAPITALIZED LEASE LIABILITIES"
any, shown as liabilities on the
balance sheet for capitalized le
transmission and distribution pr
Company, which amount shall be d
generally accepted accounting pr
applicable to the type of busine
engaged.
D-3
"NET TANGIBLE ASSETS" means the

assets on the Company's unconsol
idated balance sheet, less

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) intangible assets including,
but without limitation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such items as goodwill, trademar
ks, trade names, patents,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unamortized debt discount and ex
pense and other regulatory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets carried as an asset on th
e Company's unconsolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balance sheet, (ii) appropriate
adjustments, if any, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account of minority interests. N
et Tangible Assets shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined in accordance with ge
nerally accepted accounting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principles and practices applica
ble to the type of business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in which the Company is engaged.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) "SECURED DEBT" means Debt
created, issued, incurred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or assumed by the Company which
is secured by a Lien upon any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property (other than Excepted Pr
operty) of the Company, real,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personal or mixed, of whatever k
ind or nature and wherever
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql located. For purposes of this Se
ction, any Capitalized Lease
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liabilities of the Company will
be deemed to be Debt secured by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien on the Company's property.
plain\cf1\f50\fs16\ql Exhibit 4(c)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM OF NEW 2012 NOTE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF THE DEPOSITORY TRUST COMPANY,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSFER, EXCHANGE, OR PAYMENT,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REQUESTED BY AN AUTHORIZED REPRE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MADE TO CEDE & CO. OR TO SUCH OT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AUTHORIZED REPRESENTATIVE OF DTC

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql HEREOF FOR VALUE OR OTHERWISE BY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AS THE REGISTERED OWNER HEREOF,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No._______________
CUSIP No.
OTES DUE 2012
ipal sum of _____________________ ($_________)
tered at the close of business on the April 16

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and October 17 (each a "Regular
Record Date") immediately preceding such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date, except th
at interest payable at Maturity will be payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Person to whom principal
shall be paid. Any such interest not so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql punctually paid or duly provided
for will forthwith cease to be payable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder on such Regular Record Da
te and may either be paid to the Person in whose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name this Security (or one or mo
re Predecessor Securities) is registered at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql close of business on a Special R
ecord Date for the payment of such Defaulted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest to be fixed by the Trus
tee, notice whereof shall be given to Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities of this series not le
ss than 10 days prior to such Special Record
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date, or be paid at any time in
any other lawful manner not inconsistent with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the requirements of any securiti
es exchange on which the Securities of this
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series may be listed, and upon s
uch notice as may be required by such exchange,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all as more fully provided in th
e Indenture referred to herein.
premium, if any) and interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at Maturity on this Security sha
ll be made upon presentation of this Security at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public and private debts; provid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture shall have the meaning

ny equal to the greater of
the Notes of this series being
the remaining scheduled payments
Notes of this series being
mption date on a semi-annual
onsisting of twelve 30-day
Officer's Certificate establishi

This Security is one of a duly a
the Company (herein called the "
more series under an Indenture a
(herein, together with any amend
"Indenture", which term shall ha
instrument), between the Company
called the "Trustee", which term
Indenture), and reference is her
the property mortgaged, pledged
security, the conditions upon wh
and to the Indenture, Board Reso
series designated on the face he
limitations of rights, duties an
Trustee and the Holders of the S
Securities are, and are to be, a
this Security shall be deemed to
Holder thereof to all of the ter
Security is one of the series de
price as calculated by the Compa
100% of the principal amount of
redeemed, or
the sum of the present values of
of principal and interest on the
redeemed, discounted to the rede
basis (assuming a 360-day year c
s 25 basis points,
rest on those Notes of this series to
on date.
\page
f the Notes.
l Reserve System.
months) at the Treasury Rate plu

the redemption date.
rate per annum equal to the semi

"Comparable Treasury Price" mean
date, (i) the average of the bid
Issue (expressed in each case as
third business day preceding suc
Daily Update of the Federal Rese
successor release) is not publis
day, the Reference Treasury Deal
for such redemption date.
"H.15(519)" means the weekly sta
(519) Selected Interest Rates",
Board of Governors of the Federa
"H.15 Daily Update" means the da

publication.
h redemption date.
\page

bed.

\page

e Securities.
\page
ork.
________
CATION]
ned Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dated:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK, as Trustee
________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorized Signatory
\page{\*\bkmkstart doc_1_10}{\*\bkmkend doc_1_10}\par\pard\plain\f0\fs16\par\par
d\plain\cf1\f50\fs16\ql Exhibit 4(d)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM OF NEW 2032 NOTE
ENTED BY AN AUTHORIZED REPRESENTATIVE OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO ONCOR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ELECTRIC DELIVERY COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE, OR PAYMENT, AND ANY CE
RTIFICATE ISSUED IS REGISTERED IN THE NAME
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF CEDE & CO. OR IN SUCH OTHER N
AME AS IS REQUESTED BY AN AUTHORIZED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTATIVE OF DTC (AND ANY P
AYMENT IS MADE TO CEDE & CO. OR TO SUCH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSFER, PLEDGE, OR OTHER USE H
EREOF FOR VALUE OR OTHERWISE BY OR TO ANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERSON IS WRONGFUL INASMUCH AS T
HE REGISTERED OWNER HEREOF, CEDE & CO.,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql HAS AN INTEREST HEREIN.]
CUSIP NO.
OTES DUE 2032
a corporation duly organized and existing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the laws of the State of T
exas (herein referred to as the "Company", which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term includes any successor Pers
on under the Indenture referred to below), for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value received, hereby promises
to pay to

ipal sum of _____________________ ($_________)
tered at the close of business on April 16 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql October 17 (each a "Regular Reco
rd Date") immediately preceding such Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment Date, except that intere
st payable at Maturity will be payable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person to whom principal shall b
e paid. Any such interest not so punctually paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or duly provided for will forthw
ith cease to be payable to the Holder on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regular Record Date and may eith
er be paid to the Person in whose name this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security (or one or more Predece
ssor Securities) is registered at the close of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business on a Special Record Dat
e for the payment of such Defaulted Interest to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be fixed by the Trustee, notice
whereof shall be given to Holders of Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this series not less than 10
days prior to such Special Record Date, or be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid at any time in any other la
wful manner not inconsistent with the
\page
xchange on which the Securities of this series

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be listed, and upon such not
ice as may be required by such exchange, all as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more fully provided in the Inden
ture referred to herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public and private debts, provid
which are defined in the Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have the meanings assigned
to them in the Indenture and in the Officer's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate establishing the ter
ms of the Securities of this series.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Security is one of a duly a
uthorized issue of securities of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company (herein called the "Secu
rities"), issued and to be issued in one or more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series under an Indenture and De
ed of Trust dated as of May 1, 2002 (herein,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together with any amendments or
supplements thereto, called the "Indenture",
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which term shall have the meanin
g assigned to it in such instrument), between
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company and The Bank of New
York, as Trustee (herein called the "Trustee",
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which term includes any successo
r trustee under the Indenture), and reference is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby made to the Indenture, fo
r a statement of the property mortgaged, pledged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and held in trust, the nature an
d extent of the security, the conditions upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Lien of the Indenture
may be released and to the Indenture, Board
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolutions and Officer's Certif
icate creating the series designated on the face
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, for a statement of the r
espective rights, limitations of rights, duties

Company, the Trustee and the Holders of the
which the Securities are, and are to be,
acceptance of this Security shall be deemed to
ment by the Holder thereof to all of the terms
This Security is one of the series designated
of the Notes of this series
tes of this series being redeemed,
e on a semi-annual basis (assuming a
e 30-day months) at the Treasury
rest on those Notes of this series to the
ect to any redemption date, the rate
al equivalent yield to maturity of the
on date.
f the Notes.
and immunities thereunder of the

Securities and of the terms upon
authenticated and delivered. The
constitute the consent and agree
and provisions of the Indenture.
on the face hereof.
price equal to the greater of:
100% of the principal amount
being redeemed, or
the sum of the present values of
principal and interest on the No
discounted to the redemption dat
360-day year consisting of twelv
Rate plus 30 basis points,
redemption date.
per annum equal to the semi-annu
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date, (i) the average of the bid
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Issue (expressed in each case as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Daily Update of the Federal Rese
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor release) is not publis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql day, the Reference Treasury Deal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for such redemption date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (519) Selected Interest Rates",
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Governors of the Federa
l Reserve System.
publication.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Independent Investment Banker
" means the Reference Treasury

h redemption date.
at the option of the Holder) shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be given by mail to Holders of S
ecurities, not less than 30 days prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date fixed for redemption, all a
s provided in the Indenture. As provided in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture, notice of redemption
at the election of the Company as aforesaid may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql state that such redemption shall
be conditional upon the receipt by the
s for defeasance at any time of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entire indebtedness of this Secu
rity upon compliance with certain conditions set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in the Indenture.
\page
ain exceptions as therein provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the amendment thereof and the mo
dification of the rights and obligations of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and the rights of the Ho
lders of the Securities of each series to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected under the Indenture at
any time by the Company and the Trustee with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent of the Holders of a majo
rity in principal amount of the Securities at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the time Outstanding of all seri
es to be affected. The Indenture also contains
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions permitting the Holder
s of specified percentages in principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Securities of each series
at the time Outstanding, on behalf of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of all Securities of suc
h series, to waive compliance by the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with certain provisions of the I
ndenture and certain past defaults under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and their consequences
. Any such consent or waiver by the Holder of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Security shall be conclusiv
e and binding upon such Holder and upon all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql future Holders of this Security
and of any Security issued upon the registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of transfer hereof or in exchang
e herefor or in lieu hereof, whether or not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notation of such consent or waiv
er is made upon this Security.
e provisions of the Indenture, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of this Security shall no
t have the right to institute any proceeding

bed.
e issuable only in registered form
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without coupons in denominations
of $1,000 and integral multiples of $1,000 in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql excess thereof. As provided in t
he Indenture and subject to certain limitations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein and herein set forth, Se
curities of this series are exchangeable for a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql like aggregate principal amount
of Securities of this series and of like tenor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and of authorized denominations,
as requested by the Holder surrendering the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same.
\page

agent of the Company or the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may treat the Person in whose na
me this Security is registered as the absolute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owner hereof for all purposes, w
hether or not this Security be overdue, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neither the Company, the Trustee
nor any such agent shall be affected by notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the contrary.
by and construed in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the laws of the State of New Yor
k (including without limitation Section 5-1401
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the New York General Obligati
ons Law or any successor to such statute),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except to the extent that the Tr
ust Indenture Act shall be applicable and except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent that the laws of t
he State of Texas shall mandatorily govern.
e Securities.
tication hereon has been executed by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Trustee referred to herein b
y manual signature, this Security shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to any benefit under th
e Indenture or be valid or obligatory for any
\page
ork.
__________
CATION]
ned Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK, as Trustee
__________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorized Signatory
d\plain\cf1\f50\fs16\ql Exhibit 4(f)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGISTERED BOND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This bond has is not transferabl
e except to a successor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trustee under the Indenture and
Deed of Trust (the 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture), dated as of May 1, 2
002, from the Company to The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bank of New York, as trustee, as
such 2002 Indenture may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemented and amended.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FIRST MORTGAGE BOND,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.375% SERIES DUE 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. R-1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ORIGINAL INTEREST May 6, 2002
PRINCIPAL AMOUNT: $700,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACCRUAL DATE:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTEREST RATE: 6.375%
MATURITY DATE: May 1, 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTEREST PAYMENT DATE(S):May 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql November 1 and Maturity Date
a corporation of the State of Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (hereinafter called the Company)
, for value received, hereby promises to pay to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK, AS TRUSTEE
UNDER THE 2002 INDENTURE, or registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigns, at the office or agency
of the Company in the Borough of Manhattan, The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql City of New York, New York, or a
t the office or agency of the Company, in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql City of Dallas, Texas,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEVEN HUNDRED MILLION DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Maturity Date specified a
bove in such coin or currency of the United
of payment is legal tender for public and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql private debts, and to pay to the
registered owner hereof interest thereon, from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Original Interest Accrual Da
te specified above or from the most recent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest payment date to which i
nterest has been paid on this bond, in each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case, at the Interest Rate speci
fied above, such interest to be payable on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date(s) specifi
ed above and on the Maturity Date (each an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date), commenci
ng on the Interest Payment Date next succeeding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of authentication of th
is bond, in each case in like coin or currency
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at such office or agency on the
Interest Payment Date, until the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation with respect to the p
ayment of such principal shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharged. If the Company shall
default in the payment of interest due on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date, then inte
rest shall be payable from the next preceding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date to which i
nterest has been paid, or, if no such interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been paid on the bonds, from
the Original Interest Accrual Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The interest so payable on any I
nterest Payment Date will, subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain exceptions provided in t

he Mortgage hereinafter referred to, be paid to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the person in whose name this bo
nd is registered at the close of business on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 16 for the May 1 Interest
Payment Date and on October 17 for the November
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 Interest Payment Date (each, a
Record Date), provided that, interest payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Maturity Date will be pay
able to the person to whom the principal hereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be payable. At the option
of the Company, interest may be payable by check
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mailed on or prior to such inter
est payment date to the address of the person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled thereto as such address
shall appear on the register of the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The bonds of this series shall b
e issued by the Company, registered in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name of and delivered to The Ban
k of New York, as trustee (the 2002 Trustee)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the 2002 Indenture, to pro
vide for the payment when due (whether at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity, by acceleration or oth
erwise) of the principal and interest of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities (as defined in the 20
02 Indenture) to be issued from time to time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the 2002 Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The bonds of this series shall n
ot be transferable by the 2002 Trustee,
der the 2002 Indenture. Bonds of this series so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferable to a successor trus
tee under the 2002 Indenture may be transferred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the principal office of the T
rustee in the Borough of Manhattan, The City of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any payment by the Company under
the 2002 Indenture of the principal of or
any, on the securities which shall been
r the 2002 Indenture on the basis of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance and delivery to the 200
2 Trustee of bonds of this series (other than by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the application of the proceeds
of a payment in respect of such bonds) shall, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent hereof, be deemed to
satisfy and discharge the obligation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, if any, to make a payme
nt of principal of, or premium, or interest on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such bonds, as the case may be,
which is then due.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This bond is one of an issue of
bonds of the Company issuable in series and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is one of a series known as its
First Mortgage Bonds, 7.000% Series due 2032,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all bonds of all series issued a
nd to be issued under and equally secured by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage and Deed of Trust (here
in, together with any indenture supplemental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, including the Sixty-fou
rth Supplemental Indenture dated as of May 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, called the Mortgage), date
d as of December 1, 1983, executed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company to Irving Trust Company
(now The Bank of New York), Trustee. Reference
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is made to the Mortgage for a de
scription of the property mortgaged and pledged,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the nature and extent of the sec
urity, the rights of the holders of the bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and of the Trustee in respect th
ereof, the duties and immunities of the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the terms and conditions upo
n which the bonds are and are to be secured, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances under which additi
onal bonds may be issued and the definition of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain terms hereinafter used.
With the consent of the Company and to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent permitted by and as provi
ded in the Mortgage, the rights and obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company and/or the rights
of the holders of the bonds and/or coupons
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or the terms and provisions
of the Mortgage may be modified or altered by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such affirmative vote or votes o
f the holders of bonds then Outstanding as are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the Mortgage; provi
ded that, without the consent of the holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, no such modification or
alteration shall, among other things, impair or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the right of the holder t
o receive payment of the principal of this bond,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on or after the due date express
ed herein, or permit the creation of any lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal or prior to the Lien of th
e Mortgage or deprive the holder of the benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a lien on the Mortgaged and P
ledged Property or impair or affect the right to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive payment of interest on t
his bond on or after the respective due dates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expressed herein, without the co
nsent of the holder of the right to such
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The principal hereof may be decl
ared or may become due prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity Date hereinbefore named
on the conditions, in the manner and at the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time set forth in the Mortgage,
upon the occurrence of a Default as in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage provided.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company and the Trustee may
deem and treat the person in whose name
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this bond is registered as the a
bsolute owner hereof for the purpose of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receiving payment and for all ot
her purposes and neither the Company nor the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall be affected by any
notice to the contrary.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the manner prescribed in the
Mortgage, any bonds of this series, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrender thereof for cancellati
on at the office or agency of the Company in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borough of Manhattan, The City o
f New York, New York, are exchangeable for a
of fully registered bonds of the same series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the same Interest Rate and
Maturity Date of other authorized denominations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As provided in the Mortgage, the
Company shall not be required to make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfers or exchanges of bonds
of any series for a period of fifteen days next
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding any interest payment d
ate for bonds of said series, or next preceding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any designation of bonds of said
series to be redeemed, and the Company shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be required to make transfer
s or exchanges of any bonds designated in whole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in part for redemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The holder of this bond hereby c
onsents that the bonds of this series may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be redeemable at the option of t
he Company or pursuant to the requirements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Mortgage in whole at any tim
e, or in part from time to time, prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity Date, without notice pr
ovided in Article XII of the Mortgage, at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of the bonds to
be redeemed, in each case, together with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accrued interest to the date fix
ed for redemption by the Company in a notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered by the Company to the
Trustee and to the holders of the bonds to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed on or before the date f
ixed for redemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The bonds of this series shall a
lso be redeemed, in whole at any time, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in part from time to time, prior
to the Maturity Date, at a redemption price
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the principal amount of
the bonds of this series to be redeemed, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each case, together with accrued

interest to the date fixed for redemption, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt by the Trustee of a writ
ten notice from the 2002 Trustee (i) delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee and the Company,
(ii) signed by its President or any Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql President, (iii) stating that an
Event of Default has occurred under the 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and is continuing and
that, as a result, there then is due and payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a specified principal amount wit
h respect to the Securities outstanding under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 2002 Indenture, for the paym
ent of which the 2002 Trustee has not received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds, and (iv) specifying the p
rincipal amount of the bonds of this series to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be redeemed. Delivery of such no
tice shall constitute a waiver by the 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee of notice of redemption
under the Mortgage.
payment of the principal of or interest on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this bond against any incorporat
or or any past, present or future subscriber to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the capital stock, stockholder,
officer or director of the Company or of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql predecessor or successor corpora
tion, as such, either directly or through the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or any predecessor or su
ccessor corporation, under any rule of law,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statute or constitution or by th
e enforcement of any assessment or otherwise,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all such liability of incorporat
ors, subscribers, stockholders, officers and
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors being released by the
holder or owner hereof by the acceptance of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bond and being likewise waived a
nd released by the terms of the Mortgage.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This bond shall not become oblig
atory until The Bank of New York, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee under the Mortgage, or i
ts successor thereunder, shall have signed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form of authentication certifica
te endorsed hereon.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, ONCOR ELECTR
IC DELIVERY COMPANY has caused this bond to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be signed in its corporate name
by its Chairman of the Board, Chief Executive
Vice Presidents by such officer's signature or
porate seal to be impressed or imprinted hereon
one of its Assistant Secretaries by such
le thereof.
Officer, President or one of its
------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
--------------------------------
CATE
f the series herein designated, described
ntioned Mortgage.
--------------------------------
a facsimile thereof, and its cor

and attested by its Secretary or
officer's signature or a facsimi
By / s/ Kirk R. Oliver
Vice President
ATTEST:
/s/ John F. Stephens
Assistant Secretary
TRUSTEE'S AUTHENTICATION CERTIFI
This bond is one of the bonds, o
or provided for in the within-me
DATED: May 6, 2002
By
/s/ Remo J Reale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorized Officer

d\plain\cf1\f50\fs16\ql Exhibit 4(g)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGISTERED BOND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This bond has is not transferabl
e except to a successor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trustee under the Indenture and
Deed of Trust (the 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture), dated as of May 1, 2
002, from the Company to The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bank of New York, as trustee, as
such 2002 Indenture may be

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemented and amended.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FIRST MORTGAGE BOND,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.000% SERIES DUE 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. R-1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ORIGINAL INTEREST May 6, 2002
PRINCIPAL AMOUNT: $500,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACCRUAL DATE:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTEREST RATE: 7.000%
MATURITY DATE: May 1, 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTEREST PAYMENT DATE(S):May 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql November 1 and Maturity Date
a corporation of the State of Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (hereinafter called the Company)
, for value received, hereby promises to pay to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK, AS TRUSTEE
UNDER THE 2002 INDENTURE, or registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigns, at the office or agency
of the Company in the Borough of Manhattan, The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql City of New York, New York, or a
t the office or agency of the Company, in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql City of Dallas, Texas,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FIVE HUNDRED MILLION DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Maturity Date specified a
bove in such coin or currency of the United
of payment is legal tender for public and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql private debts, and to pay to the
registered owner hereof interest thereon, from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Original Interest Accrual Da
te specified above or from the most recent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest payment date to which i
nterest has been paid on this bond, in each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case, at the Interest Rate speci
fied above, such interest to be payable on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date(s) specifi
ed above and on the Maturity Date (each an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date), commenci
ng on the Interest Payment Date next succeeding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of authentication of th
is bond, in each case in like coin or currency
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at such office or agency on the
Interest Payment Date, until the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation with respect to the p
ayment of such principal shall have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharged. If the Company shall
default in the payment of interest due on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date, then inte
rest shall be payable from the next preceding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Payment Date to which i
nterest has been paid, or, if no such interest

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been paid on the bonds, from
the Original Interest Accrual Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The interest so payable on any I
nterest Payment Date will, subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain exceptions provided in t
he Mortgage hereinafter referred to, be paid to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the person in whose name this bo
nd is registered at the close of business on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 16 for the May 1 Interest
Payment Date and on October 17 for the November
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 Interest Payment Date (each, a
Record Date), provided that, interest payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Maturity Date will be pay
able to the person to whom the principal hereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be payable. At the option
of the Company, interest may be payable by check
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mailed on or prior to such inter
est payment date to the address of the person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled thereto as such address
shall appear on the register of the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The bonds of this series shall b
e issued by the Company, registered in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name of and delivered to The Ban
k of New York, as trustee (the 2002 Trustee)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the 2002 Indenture, to pro
vide for the payment when due (whether at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity, by acceleration or oth
erwise) of the principal and interest of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities (as defined in the 20
02 Indenture) to be issued from time to time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the 2002 Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The bonds of this series shall n
ot be transferable by the 2002 Trustee,
der the 2002 Indenture. Bonds of this series so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferable to a successor trus
tee under the 2002 Indenture may be transferred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the principal office of the T
rustee in the Borough of Manhattan, The City of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any payment by the Company under
the 2002 Indenture of the principal of or
any, on the securities which shall been
r the 2002 Indenture on the basis of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance and delivery to the 200
2 Trustee of bonds of this series (other than by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the application of the proceeds
of a payment in respect of such bonds) shall, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent hereof, be deemed to

satisfy and discharge the obligation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, if any, to make a payme
nt of principal of, or premium, or interest on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such bonds, as the case may be,
which is then due.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This bond is one of an issue of
bonds of the Company issuable in series and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is one of a series known as its
First Mortgage Bonds, 7.000% Series due 2032,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all bonds of all series issued a
nd to be issued under and equally secured by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage and Deed of Trust (here
in, together with any indenture supplemental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, including the Sixty-fou
rth Supplemental Indenture dated as of May 1,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, called the Mortgage), date
d as of December 1, 1983, executed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company to Irving Trust Company
(now The Bank of New York), Trustee. Reference
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is made to the Mortgage for a de
scription of the property mortgaged and pledged,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the nature and extent of the sec
urity, the rights of the holders of the bonds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and of the Trustee in respect th
ereof, the duties and immunities of the Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the terms and conditions upo
n which the bonds are and are to be secured, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances under which additi
onal bonds may be issued and the definition of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain terms hereinafter used.
With the consent of the Company and to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent permitted by and as provi
ded in the Mortgage, the rights and obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company and/or the rights
of the holders of the bonds and/or coupons
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or the terms and provisions
of the Mortgage may be modified or altered by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such affirmative vote or votes o
f the holders of bonds then Outstanding as are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the Mortgage; provi
ded that, without the consent of the holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, no such modification or
alteration shall, among other things, impair or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the right of the holder t
o receive payment of the principal of this bond,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on or after the due date express
ed herein, or permit the creation of any lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal or prior to the Lien of th
e Mortgage or deprive the holder of the benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a lien on the Mortgaged and P
ledged Property or impair or affect the right to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive payment of interest on t
his bond on or after the respective due dates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expressed herein, without the co
nsent of the holder of the right to such
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The principal hereof may be decl
ared or may become due prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity Date hereinbefore named
on the conditions, in the manner and at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time set forth in the Mortgage,
upon the occurrence of a Default as in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mortgage provided.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company and the Trustee may
deem and treat the person in whose name
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this bond is registered as the a
bsolute owner hereof for the purpose of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receiving payment and for all ot
her purposes and neither the Company nor the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee shall be affected by any
notice to the contrary.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the manner prescribed in the
Mortgage, any bonds of this series, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrender thereof for cancellati
on at the office or agency of the Company in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borough of Manhattan, The City o
f New York, New York, are exchangeable for a
of fully registered bonds of the same series
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the same Interest Rate and
Maturity Date of other authorized denominations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As provided in the Mortgage, the
Company shall not be required to make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfers or exchanges of bonds
of any series for a period of fifteen days next
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding any interest payment d
ate for bonds of said series, or next preceding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any designation of bonds of said
series to be redeemed, and the Company shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be required to make transfer
s or exchanges of any bonds designated in whole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in part for redemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The holder of this bond hereby c
onsents that the bonds of this series may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be redeemable at the option of t
he Company or pursuant to the requirements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Mortgage in whole at any tim
e, or in part from time to time, prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity Date, without notice pr
ovided in Article XII of the Mortgage, at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of the bonds to
be redeemed, in each case, together with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accrued interest to the date fix
ed for redemption by the Company in a notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered by the Company to the
Trustee and to the holders of the bonds to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeemed on or before the date f
ixed for redemption.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The bonds of this series shall a

lso be redeemed, in whole at any time, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in part from time to time, prior
to the Maturity Date, at a redemption price
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the principal amount of
the bonds of this series to be redeemed, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each case, together with accrued
interest to the date fixed for redemption, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt by the Trustee of a writ
ten notice from the 2002 Trustee (i) delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Trustee and the Company,
(ii) signed by its President or any Vice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql President, (iii) stating that an
Event of Default has occurred under the 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture and is continuing and
that, as a result, there then is due and payable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a specified principal amount wit
h respect to the Securities outstanding under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 2002 Indenture, for the paym
ent of which the 2002 Trustee has not received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds, and (iv) specifying the p
rincipal amount of the bonds of this series to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be redeemed. Delivery of such no
tice shall constitute a waiver by the 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee of notice of redemption
under the Mortgage.
payment of the principal of or interest on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this bond against any incorporat
or or any past, present or future subscriber to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the capital stock, stockholder,
officer or director of the Company or of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql predecessor or successor corpora
tion, as such, either directly or through the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or any predecessor or su
ccessor corporation, under any rule of law,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statute or constitution or by th
e enforcement of any assessment or otherwise,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all such liability of incorporat
ors, subscribers, stockholders, officers and
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors being released by the
holder or owner hereof by the acceptance of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bond and being likewise waived a
nd released by the terms of the Mortgage.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This bond shall not become oblig
atory until The Bank of New York, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee under the Mortgage, or i
ts successor thereunder, shall have signed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form of authentication certifica
te endorsed hereon.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, ONCOR ELECTR
IC DELIVERY COMPANY has caused this bond
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be signed in its corporate na
me by its Chairman of the Board, Chief Executive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer, President or one of its
Vice Presidents by such officer's signature or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a facsimile thereof, and its cor
porate seal to be impressed or imprinted hereon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and attested by its Secretary or
one of its Assistant Secretaries by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer's signature or a facsimi
le thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /s/ Kirk R. Oliver
-------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
--------------------------------
CATE
f the series herein designated, described
ntioned Mortgage.
--------------------------------
Vice President
ATTEST:
/s/ John F. Stephens
Assistant Secretary
TRUSTEE'S AUTHENTICATION CERTIFI
This bond is one of the bonds, o
or provided for in the within-me
DATED: May 6, 2002
By /s/ Remo R. Reale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorized Officer

d\plain\cf1\f50\fs16\ql Exhibit 4(h)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGISTRATION RIGHTS AGREEMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS REGISTRATION RIGHTS AGREEME
NT (the "Agreement"), dated May 6, 2002, is

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made between ONCOR ELECTRIC DELI
VERY COMPANY (the "Company") and LEHMAN BROTHERS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INC., BARCLAYS CAPITAL INC., BNP
PARIBAS SECURTIES CORP., BNY CAPITAL MARKETS,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INC., FIRST UNION SECURITIES, IN
C. and WESTDEUTSCHE LANDESBANK GIROZENTRALE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (collectively, the "Initial Purc
hasers," and each an "Initial Purchaser").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement is made pursuant
to the Purchase Agreement dated May 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Purchase Agreement"), betw
een the Company, as issuer, and the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers, which provides for,
among other things, the several sales by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company to the Initial Purchaser
s of $700,000,000 principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's 6.375% Senior Secured
Notes due 2012 (the "2012 Notes") and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $500,000,000 principal amount of
the Company's 7.000% Senior Secured Notes due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2032 (the "2032 Notes," and toge
ther with the 2012 Notes, the "Notes"). In order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to induce the Initial Purchasers
to enter into the Purchase Agreement, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company has agreed to provide to
the Initial Purchasers and the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers' direct and indirect
transferees the registration rights set forth in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement. The execution an
d delivery of this Agreement is a condition to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the closing under the Purchase A
greement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In consideration of the foregoin
g, the parties hereto agree as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Definitions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used in this Agreement, the f
ollowing capitalized defined terms shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the following meanings:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Additional Interest" shall have
the meaning set forth in Section 2(e)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Additional Interest Rate" shall
have the meaning set forth in Section 2(e)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Advice" shall have the meaning
set forth in the last paragraph of Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Applicable Period" shall have t
he meaning set forth in Section 3(t)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Business Day" shall mean a day

other than (i) a Saturday or a Sunday, (ii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a day on which banks in New York
, New York are authorized or obligated by law or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executive order to remain closed
or (iii) a day on which the Trustee's principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporate trust office is closed
for business.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Closing Date" shall mean the Cl
osing Date as defined in the Purchase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Company" shall have the meaning
set forth in the preamble to this
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Depositary" shall mean The Depo
sitory Trust Company, or any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql depositary appointed by the Comp
any; provided, however, that such depositary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must have an address in the Boro
ugh of Manhattan, in The City of New York.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Effectiveness Period" shall hav
e the meaning set forth in Section 2(b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Eligible Holder" shall have the
meaning set forth in Section 2(a) hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange Act" shall mean the Se
curities Exchange Act of 1934, as amended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange 2012 Notes" shall mean
the 6.375% Senior Secured Notes due 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql containing terms identical to th
e 2012 Notes (except that the Exchange 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes will not contain registrat
ion rights or terms with respect to transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restrictions under the Securitie
s Act and will not provide for any Additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest to be payable with resp
ect thereto).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange 2032 Notes" shall mean
the 7.000% Senior Secured Notes due 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql containing terms identical to th
e 2032 Notes (except that the Exchange 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes will not contain registrat
ion rights or terms with respect to transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restrictions under the Securitie
s Act and will not provide for any Additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest to be payable with resp
ect thereto).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange Notes" shall mean the
Exchange 2012 Notes and the Exchange 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange Offer" shall mean the
offer by the Company to the Holders to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange the Registrable Securit
ies for a like principal amount of Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes pursuant to Section 2(a) h
ereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange Offer Registration" sh
all mean a registration under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act effected pursuant
to Section 2(a) hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange Offer Registration Sta
tement" shall mean an exchange offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement on Form S
-4 (or, if applicable, on another appropriate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form), and all amendments and su
pplements to such registration statement, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each case including the Prospect
us contained therein, all exhibits thereto and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all material incorporated by ref
erence therein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Exchange Period" shall have the
meaning set forth in Section 2(a) hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Holders" shall mean the Initial
Purchasers, for so long as they own
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficial interests in any Regi
strable Securities, and each of their respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successors, assigns and direct a
nd indirect transferees who become registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owners of Registrable Securities
under the Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Indenture" shall mean the Inden
ture relating to the Notes and the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes dated as of May 1, 2002 be
tween the Company, as issuer, and The Bank of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York, as Indenture Trustee,
as the same may be amended from time to time in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the terms thereo
f.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Indenture Trustee" shall mean T
he Bank of New York, and any successor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, as trustee under the In
denture.
\page
e the meaning set forth in the preamble of
ing set forth in Section 3(n) hereof.
of original issuance of the Notes.
e Holders of a majority of the aggregate
Notes.
iation of Securities Dealers, Inc.
et forth in the preamble to this
ing set forth in the preamble of this
ing set forth in the preamble of this
all have the meaning set forth in Section
l, partnership, corporation, trust or
ited liability company, or a government or
thereof.
pectus included in a Registration
nary prospectus, and any such prospectus as
rospectus supplement, including a prospectus
erms of the offering of any portion of the
y a Shelf Registration Statement, and by all
to a prospectus, including post-effective
luding all material incorporated by reference
the meaning set forth in the preamble of
"Initial Purchaser(s)" shall hav

this Agreement.
"Inspectors" shall have the mean
"Issue Date" shall mean the date
"Majority Holders" shall mean th
principal amount of outstanding
"NASD" shall mean National Assoc
"Notes" shall have the meaning s
Agreement.
"2012 Notes" shall have the mean
Agreement.
"2032 Notes" shall have the mean
Agreement.
"Participating Broker-Dealer" sh
3(t) hereof.
"Person" shall mean an individua
unincorporated organization, lim
agency or political subdivision
"Prospectus" shall mean the pros
Statement, including any prelimi
amended or supplemented by any p
supplement with respect to the t
Registrable Securities covered b
other amendments and supplements
amendments, and in each case inc
therein.
"Purchase Agreement" shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Records" shall have the meaning
set forth in Section 3(n) hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Registrable Securities" shall m
ean the Notes; provided, however, that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes shall cease to be Registra
ble Securities when (i) a Registration Statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the Notes shall
have been declared effective under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act and the Notes sha
ll have been disposed of pursuant to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement, (ii) the
Notes shall have been sold to the public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 144A) under the Securities Act,
(iii) the Notes shall have ceased to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding, (iv) the Notes shal
l have been exchanged for Exchange Notes upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consummation of the Exchange Off
er and are thereafter freely tradable by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder thereof (other than an af
filiate of the Company) or (v) two years (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such shorter period as may herea
fter be provided in Rule 144(k) under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act (or similar rule)
) have elapsed since the date of original
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuances of the Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Registration Default" shall hav
e the meaning set forth in Section 2(e)
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Registration Expenses" shall me
an any and all expenses incident to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance of or the compliance
by the Company with this Agreement, including,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation: (i) all SEC
or NASD registration and filing fees; (ii) all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fees and expenses incurred in co
nnection with compliance with state securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or blue sky laws (including reas
onable fees and disbursements of counsel for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriters or Holders in conne
ction with blue sky qualification of any of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Notes or Registrable Se
curities) and compliance with the rules of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NASD in an amount not exceeding
$15,000 in the aggregate, (iii) all expenses of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Persons in preparing or assi
sting in preparing, word processing, printing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and distributing any Registratio
n Statement, any Prospectus and any amendments

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or supplements thereto, and in p
reparing or assisting in preparing, printing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributing any Registration St
atement, any Prospectus and any amendments or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplements thereto, and in prep
aring or assisting in preparing, printing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributing any underwriting ag
reements, securities sales agreements and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents relating to the perfor
mance of and compliance with this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) all rating agency fees, (v)
the fees and disbursements of counsel for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, of counsel for the Hold
ers hereunder in connection with the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer, and of the independent ce
rtified public accountants of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the expenses of any "c
old comfort" letters required by or incident to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such performance and compliance,
(vi) the fees and expenses of the Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, and any paying agent, e
xchange agent or custodian, (vii) all fees and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses incurred in connection
with the listing, if any, of any of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities or the Ex
change Notes on any securities exchange or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchanges and (viii) the reasona
ble fees and expenses of any special experts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retained by the Company in conne
ction with any Registration Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Registration Statement" shall m
ean any registration statement of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company that covers any of the E
xchange Notes or Registrable Securities pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the provisions of this Agreem
ent, and all amendments and supplements to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Registration Statement, inc
luding post-effective amendments, in each case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the Prospectus contain
ed therein, all exhibits thereto and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material incorporated by referen
ce therein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Rule 144(k) Period" shall mean
the period of two years (or such shorter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period as may hereafter be provi
ded in Rule 144(k) under the Securities Act (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar successor rule)) commenc
ing on the Issue Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "SEC" shall mean the Securities
and Exchange Commission.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Securities Act" shall mean the
Securities Act of 1933, as amended from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time to time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Shelf Registration" shall mean
a registration effected pursuant to Section

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2(b) hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Shelf Registration Statement" s
hall mean a "shelf" registration statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company pursuant to the p
rovisions of Section 2(b) hereof which covers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of the Registrable Securitie
s, on an appropriate form under Rule 415 under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act, or any simil
ar rule that may be adopted by the SEC, and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendments and supplements to su
ch registration statement, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql post-effective amendments, in ea
ch case including the Prospectus contained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein, all exhibits thereto an
d all material incorporated by reference
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "TIA" shall mean the Trust Inden
ture Act of 1939, as amended from time to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Registration Under the Securi
ties Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Exchange Offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To the extent not prohibited by
any applicable law or applicable
he SEC, the Company shall, for the benefit of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Holders, at the Company's co
st, (i) cause to be filed with the SEC an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer Registration Stat
ement on an appropriate form under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act covering the Exch
ange Offer, (ii) use its reasonable best efforts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to cause such Exchange Offer Reg
istration Statement to be declared effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Securities Act by the
SEC not later than the date which is 270 days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the Issue Date and (iii) p
romptly offer the Exchange Notes in exchange for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrender of the Notes upon the
effectiveness of the Exchange Offer Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement, and consummate the Ex
change Offer within 315 days after the Issue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date. Upon the effectiveness of
the Exchange Offer Registration Statement, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall promptly commence
the Exchange Offer, it being understood that the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql objective of such Exchange Offer
is to enable each Holder electing to exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities for a lik
e principal amount of Exchange Notes (assuming
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that such Holder is not an affil
iate of the Company within the meaning of Rule
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 405 under the Securities Act and
is not a broker-dealer tendering Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities acquired directly fro
m the Company for its own account, acquires the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Securities in the ordin
ary course of such Holder's business and has no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangements or understandings w
ith any Person to participate in the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer for the purpose of distrib
uting the Exchange Securities) (any Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting all such requirements, h
ereinafter an "Eligible Holder"), and to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer such Exchange Notes fro
m and after their receipt without any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitations or restrictions unde
r the Securities Act and under state securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or blue sky laws.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In connection with the Exchange
Offer, the Company shall:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) mail to each Holder a copy o
f the Prospectus forming part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer Registration Stat
ement, together with an appropriate letter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of transmittal and related docum
ents (together, the "Notice");
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) use its reasonable best eff
orts to keep the Exchange Offer open
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for acceptance for a period of n
ot less than 30 days after the date Notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof is mailed to the Holders
(or longer if required by applicable law)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (such period referred to herein
as the "Exchange Period");
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) utilize the services of th
e Depositary for the Exchange Offer;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) permit Holders to withdraw,
at any time prior to the close of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business, New York time, on the
last Business Day of the Exchange Period,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Notes tendered for exchange
by sending to the institution specified in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Notice, a telegram, telex, f
acsimile transmission or letter, received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before aforesaid time, setting f
orth the name of such Holder, the principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of Notes delivered for ex
change, and a statement that such Holder is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawing his election to have
such Notes exchanged;

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) notify each Holder by means
of the Notice that any Note not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered by such Holder in the E
xchange Offer will remain outstanding and
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue to accrue interest, but
will not retain any rights under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement (except in the case of
the Initial Purchasers and Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealers as provided herei
n); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vi) otherwise comply in all res
pects with all applicable laws
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to the Exchange Offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As soon as practicable after the
close of the Exchange Offer, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) accept for exchange all Note
s or portions thereof tendered and not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql validly withdrawn pursuant to th
e Exchange Offer;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) deliver, or cause to be del
ivered, to the Indenture Trustee for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation all Notes or portio
ns thereof so accepted for exchange by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) issue, and cause the Inden
ture Trustee to promptly authenticate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and deliver to the Depositary (o
r if, the Exchange Notes are in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificated form, each Holder),
Exchange Notes equal in principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the principal amount of the N
otes surrendered by such Holder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest on each Exchange Note i
ssued pursuant to the Registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer will accrue from
the last date on which interest was paid on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note surrendered in exchange the
refor or, if no interest has been paid on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note, from the Issue Date. To th
e extent not prohibited by any law or applicable
he SEC, the Company shall use its reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql best efforts to complete the Exc
hange Offer as provided above. The Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer shall not be subject to an
y conditions, other than that the Exchange Offer

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not violate applicable law
or any applicable interpretation of the staff of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the SEC and that each Holder ten
dering Notes for exchange shall be an Eligible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder. Each Holder of Registrab
le Securities who wishes to exchange such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities for Excha
nge Notes in the Exchange Offer will be required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make certain customary repres
entations in connection therewith, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations that (i) it is n
ot an affiliate of the Company, (ii) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Notes to be received by
it were acquired in the ordinary course of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business and (iii) at the time o
f the Exchange Offer, it has no arrangement with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any person to participate in the
distribution (within the meaning of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act) of the Exchange
Notes. Each Holder hereby acknowledges and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees that any Participating Br
oker-Dealer and any such Holder using the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer to participate in
a distribution of the Exchange Notes: (1) could
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not under SEC policy as in effec
t on the date of this Agreement rely on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql position of the SEC enunciated i
n Morgan Stanley and Co., Inc. (available June
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5, 1991) and Exxon Capital Holdi
ngs Corporation (available May 13, 1988), as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpreted in the SEC's letter
to Shearman & Sterling dated July 2, 1993, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar no-action letters (inclu
ding any no-action letter obtained based on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations in clause (i) ab
ove), and (2) must comply with the registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and prospectus delivery requirem
ents of the Securities Act in connection with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the secondary resale transaction
and that such a secondary resale transaction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql should be covered by an effectiv
e registration statement containing the selling
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security holder information requ
ired by Item 507 and 508, as applicable, of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulation S-K, the SEC standard
instructions for filing forms under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act, if the resales a
re of Exchange Notes obtained by such Holder in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange for Notes acquired by s
uch Holder directly from the Company.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon consummation of the Exchang
e Offer in accordance with this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2(a), the provisions of this Agr

eement shall continue to apply, mutatis
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mutandis, solely with respect to
Registrable Securities that are Exchange Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by Participating Broker-Dea
lers, and the Company shall have no further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to register the Regis
trable Securities (other than pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2(b)(iii)) pursuant to S
ection 2(b) of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Shelf Registration.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that (i) the Compan
y is not permitted to effect the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer because of any ch
ange in law or in applicable interpretations of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the staff of the SEC, (ii) for a
ny other reason the Exchange Offer is not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consummated on or prior to 315 d
ays after the Issue Date, (iii) any Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchaser so requests with respe
ct to Notes not eligible to be exchanged for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Notes in the Exchange O
ffer, (iv) any Holder (other than a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participating Broker-Dealer) is
not permitted by applicable law or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretations of the staff of
the SEC to participate in the Exchange Offer or,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the case of any Holder (other
than a Participating Broker-Dealer) that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participates in the Exchange Off
er, such Holder does not receive freely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tradeable Exchange Notes on the
date of the exchange and any such Holder so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requests, or (v) the Company so
elects, the Company shall, for the benefit of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Holders, promptly deliver to
the Holders and the Indenture Trustee written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice thereof and, at its cost,
use its reasonable best efforts to have a Shelf
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement covering
continuous resales of the Notes or the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, as the case may be, decla
red effective by the SEC within the later of (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 180 days after being required or
requested to file a Shelf Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement and (ii) 270 days afte
r the Issue Date. No Holder of Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities shall be entitled to
include any of its Registrable Securities in any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shelf Registration Statement pur
suant to this Agreement unless and until such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder agrees in writing to be b
ound by all of the provisions of this Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable to such Holder and fu
rnishes to the Company in writing, within 15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days after receipt of a request
therefor, such information as the Company may,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after conferring with counsel wi

th regard to information relating to Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that would be required by the SE
C to be included in such Shelf Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement or Prospectus included
therein, reasonably request for inclusion in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Shelf Registration Statement
or Prospectus included therein. Each Holder as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which any Shelf Registration
is being effected agrees promptly to furnish to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company all information with
respect to such Holder necessary to make the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information previously furnished
to the Company by such Holder not materially
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql misleading.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company agrees to use its re
asonable best efforts to keep the Shelf
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement continuou
sly effective for the Rule 144(k) Period
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (subject to extension pursuant t
o the last paragraph of Section 3 hereof) or for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such shorter period which will t
erminate when all of the securities covered by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Shelf Registration Statement
have been sold pursuant to the Shelf
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement or cease
to be Registrable Securities (the "Effectiveness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period"). The Company shall not
permit any securities other than Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities to be included in the
Shelf Registration. The Company will, in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event a Shelf Registration State
ment is declared effective, provide to each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder a reasonable number of co
pies of the Prospectus which is a part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shelf Registration Statement and
notify each such Holder when the Shelf
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration has become effectiv
e. The Company further agrees, if necessary, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplement or amend the Shelf Re
gistration Statement, if required by the rules,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations or instructions appl
icable to the registration form used by the
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company for such Shelf Registrat
ion Statement or by the Securities Act or by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other rules and regulations ther
eunder for shelf registrations, and the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees to furnish to the Holders
of Registrable Securities copies of any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplement or amendment promptly
after its being used or filed with the SEC.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Expenses.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall pay all Regist
ration Expenses in connection with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration pursuant to Section
2(a) or 2(b) hereof. Except as provided herein,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Holder shall pay all expens
es of its counsel, underwriting discounts and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commissions and transfer taxes,
if any, relating to the sale or disposition of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Holder's Registrable Securi
ties pursuant to the Shelf Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Effective Registration State
ment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An Exchange Offer Registration S
tatement pursuant to Section 2(a) hereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or a Shelf Registration Statemen
t pursuant to Section 2(b) hereof (or a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combination of the two) will not
be deemed to have become effective unless it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been declared effective by t
he SEC; provided, however, that if, after it has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been declared effective, the off
ering of Registrable Securities pursuant to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shelf Registration Statement is
interfered with by any stop order, injunction or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other order or requirement of th
e SEC or any other governmental agency or court,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Registration Statement will
be deemed not to have been effective during the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of such interference, unt
il the offering of Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to such Registration St
atement may legally resume. The Company will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed not to have used its reas
onable best efforts to cause the Exchange Offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement or the Sh
elf Registration Statement, as the case may be,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to become, or to remain, effecti
ve during the requisite period if it voluntarily
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql takes any action that would resu
lt in any such Registration Statement not being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declared effective or in the Hol
ders of Registrable Securities covered thereby
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not being able to exchange or of
fer and sell such Registrable Securities during
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that period unless such action i
s required by applicable law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Additional Interest.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company will pay Additional
Interest on the Notes if:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the Exchange Offer Registrat
ion Statement (or, if a change in law

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in applicable interpretations
of the staff of the SEC does not permit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor to effect an Exchange Offe
r, the Shelf Registration Statement) is not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declared effective by the SEC wi
thin 270 days after the Issue Date; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the Exchange Offer is not c
onsummated within 315 days after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Issue Date (unless Oncor is not
permitted to effect an Exchange Offer as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in clause (i) above);
or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the Shelf Registration Sta
tement (except as specified in clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i)) is not declared effective b
y the SEC within the later of (x) 180 days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after being requested to file a
Shelf Registration Statement and (y) 270
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days after the Issue Date; or
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) (A) after the Exchange Offe
r Registration Statement is declared
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective, such Registration Sta
tement thereafter ceases to be effective at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time during the Exchange Per
iod or the Applicable Period, as the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be, or (B) after the Shelf R
egistration Statement has been declared
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective, such Registration Sta
tement ceases to be effective or usable in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with resales of Notes
at any time prior to the expiration of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rule 144(k) Period (other than a
fter such time as all Notes have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposed of thereunder or otherw
ise cease to be Registrable Securities)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (each such event specified in (i
) - (iv) of this Section 2(e), a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Registration Default").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Additional Interest will accrue
on the Notes and the Exchange Notes, as the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be, from and including the d
ate on which any such Registration Default shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occur to but excluding the date
on which all such Registration Defaults have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been cured, or if earlier, the d
ate on which all the Notes may first be resold
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in reliance on Rule 144(k), at t
he rate of .50% per annum ("Additional Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rate"); provided, however, that
the Additional Interest Rate may not exceed in

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the aggregate .50% per annum.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any amounts of Additional Intere
st due pursuant to Section 2(e) above
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be payable in cash on the r
elevant payment dates for the payment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on the Notes pursuant t
o the Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Specific Enforcement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Without limiting the remedies av
ailable to the Holders, the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledges that any failure of
the Company to comply with its obligations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 2(a) and Section 2
(b) hereof may result in material irreparable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql injury to the Holders for which
there is no adequate remedy at law, that it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would not be possible to measure
damages for such injuries precisely and that,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the event of any such failure
, any Holder may obtain such relief as may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to specifically enforce
the obligations of the Company under Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2(a) and Section 2(b) hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Registration Procedures.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In connection with the obligatio
ns of the Company with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) prepare and file with the SE
C a Registration Statement or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statements as presc
ribed by Sections 2(a) and 2(b) hereof within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the relevant time period specifi
ed and on the appropriate form(s) under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act, which form(s) (i
) shall be selected by the Company, (ii) shall,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the case of a Shelf Registrat
ion, be available for the sale of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities by the se
lling Holders thereof and (iii) shall comply as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to form in all material respects
with the requirements of the applicable form
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and include all financial statem
ents required by the SEC to be filed therewith;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and use its reasonable best effo
rts to cause such Registration Statement(s) to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become effective and remain effe
ctive in accordance with Section 2 hereof;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that if (1) s
uch filing is pursuant to Section 2(b), or (2) a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus contained in an Excha

nge Offer Registration Statement filed pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 2(a) is required to b
e delivered under the Securities Act by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participating Broker-Dealer who
seeks to sell Exchange Notes, before filing any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement or Prospe
ctus or any amendments or supplements thereto,
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall furnish to and
afford the Holders of the Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and each such Partici
pating Broker-Dealer, as the case may be,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covered by such Registration Sta
tement, their counsel and the managing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriters, if any, a reasonab
le opportunity to review copies of all such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents (including copies of a
ny documents to be incorporated by reference
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein and all exhibits thereto
) proposed to be filed. The Company shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql file any Registration Statement
or Prospectus or any amendments or supplements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto in respect of which the
Holders must be afforded an opportunity to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review prior to the filing of su
ch document if the Majority Holders or such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participating Broker-Dealer, as
the case may be, their counsel or the managing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriters, if any, shall reas
onably object;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) prepare and file with the SE
C such amendments and post-effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendments to each Registration
Statement as may be necessary to keep such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement effective
for the Effectiveness Period or the Applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period, as the case may be, and
cause each Prospectus to be supplemented, if so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by the Company or req
uested by the SEC, by any required prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplement and as so supplemente
d to be filed pursuant to Rule 424 (or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar provision then in force)
under the Securities Act, and comply with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Securities Act
, the Exchange Act and the rules and regulations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promulgated thereunder applicabl
e to it with respect to the disposition of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities covered by each Regis
tration Statement during the Effectiveness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period or the Applicable Period,
as the case may be, in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intended method or methods of di
stribution by the selling Holders thereof

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in this Agreement (inc
luding sales by any Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealer);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) in the case of a Shelf Regis
tration, (i) notify each Holder of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities included
in the Shelf Registration Statement, at least
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql three Business Days prior to fil
ing, that a Shelf Registration Statement with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the Registrable Secur
ities is being filed and advise such Holder that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the distribution of Registrable
Securities will be made in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql method selected by the Majority
Holders, (ii) furnish to each Holder of
in the Shelf Registration Statement and to each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriter of an underwritten o
ffering of Registrable Securities, if any,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without charge, as many copies o
f each Prospectus, including each preliminary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus, and any amendment or
supplement thereto and such other documents as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Holder or underwriter may r
easonably request, in order to facilitate the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public sale or other disposition
of the Registrable Securities, (iii) consent to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the use of the Prospectus or any
amendment or supplement thereto by each of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selling Holders of Registrable S
ecurities included in the Shelf Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement in connection with the
offering and sale of the Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covered by the Prospectus or any
amendment or supplement thereto and (iv)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnish to each Holder of Regist
rable Securities either a summary of the terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement or a copy of t
his Agreement;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) in the case of a Shelf Regis
tration, to register or qualify the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities under all
applicable state securities or "blue sky" laws
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such jurisdictions by the tim
e the applicable Registration Statement is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declared effective by the SEC as
any Holder of Registrable Securities covered by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Registration Statement and eac
h underwriter of an underwritten offering of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities shall rea
sonably request in writing in advance of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of effectiveness; provided,
however, that the Company shall not be required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to (i) qualify as a foreign corp
oration or as a dealer in securities in any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction where it would not
otherwise be required to qualify but for this
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(d), (ii) file any gene
ral consent to service of process in any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction where it would not
otherwise be subject to such service of process
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (iii) file annual reports or
comply with any other requirements deemed in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable judgment to be unduly
burdensome;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) in the case of (1) a Shelf R
egistration or (2) Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealers from whom the Com
pany has received prior written notice that they
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be utilizing the Prospectus
contained in the Exchange Offer Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement as provided in Section
3(t) hereof, are seeking to sell Exchange Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and are required to deliver Pros
pectuses, promptly notify each Holder of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities, or each
such Participating Broker-Dealer, as the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be, their counsel and the ma
naging underwriters, if any, and promptly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confirm such notice in writing (
i) when a Registration Statement has become
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective and when any post-effe
ctive amendments and supplements thereto become
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective, (ii) of any request b
y the SEC or any state securities authority for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendments and supplements to a
Registration Statement or Prospectus or for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional information after the
Registration Statement has become effective,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) of the issuance by the SEC
or any state securities authority of any stop
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order suspending the effectivene
ss of a Registration Statement or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualification of the Registrable
Securities or the Exchange Notes to be offered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or sold by any Participating Bro
ker-Dealer in any jurisdiction described in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph 3(d) hereof or the ini
tiation of any proceedings for that purpose,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) in the case of a Shelf Regi
stration, if, between the effective date of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement and the c
losing of any sale of Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covered thereby, the representat
ions and warranties of the Company contained in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any purchase agreement, securiti
es sales agreement or other similar agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if any, cease to be true and cor
rect in all material respects, (v) of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql happening of any event or the fa
ilure of any event to occur or the discovery of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any facts or otherwise, during t
he Effectiveness Period which makes any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement made in such Registrat
ion Statement or the related Prospectus untrue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any material respect or which
causes such Registration Statement or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus to omit to state a ma
terial fact necessary to make the statements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein, in the light of the cir
cumstances under which they were made, not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql misleading and (vi) when the Com
pany reasonably determines that a post-effective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment to the Registration St
atement would be appropriate;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) make every reasonable effort
to obtain the withdrawal of any order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suspending the effectiveness of
a Registration Statement at the earliest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possible moment;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) in the case of a Shelf Regis
tration, furnish to each Holder of
within the coverage of such Shelf Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement, without charge, at le
ast one conformed copy of each Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement relating to such Shelf
Registration and any post-effective amendment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto (without documents incor
porated therein by reference or exhibits
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, unless requested);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) in the case of a Shelf Regis
tration, cooperate with the selling
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of Registrable Securitie
s to facilitate the timely preparation and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of certificates represe
nting Registrable Securities to be sold and not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bearing any restrictive legends
and in such denominations (consistent with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Indenture) and
registered in such names as the selling Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the underwriters, if any, may
reasonably request at least two Business Days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the closing of any sale
of Registrable Securities pursuant to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shelf Registration Statement;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) in the case of a Shelf Regis
tration or an Exchange Offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration, upon the occurrenc
e of any circumstance contemplated by Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(e)(ii), 3(e)(iv), 3(e)(v) or 3

(e)(vi) hereof, prepare a supplement or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql post-effective amendment to a Re
gistration Statement or the related Prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any document incorporated the
rein by reference or file any other required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document so that, as thereafter
delivered to the purchasers of the Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, such Prospectus will
not contain any untrue statement of a material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fact or omit to state a material
fact necessary to make the statements therein,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the light of the circumstance
s under which they were made, not misleading and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notify each Holder to suspend us
e of the Prospectus as promptly as practicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the occurrence of such an
event, and each Holder hereby agrees to suspend
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use of the Prospectus until the
Company has amended or supplemented the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus to correct such misst
atement or omission;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) in the case of a Shelf Regis
tration, a reasonable time prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filing of any document which is
to be incorporated by reference into a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement or a Pros
pectus after the initial filing of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement, provide
a reasonable number of copies of such document
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Holders and make such of
the representatives of the Company as shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably requested by the Hold
ers of Registrable Securities or the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers on behalf of such Hol
ders available for reasonable discussion of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) obtain a CUSIP number for al
l Exchange Notes, no later than the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective date of a Registration
Statement, and provide the Indenture Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with printed certificates for th
e Exchange Notes or the Registrable Securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the case may be, in a form el
igible for deposit with the Depositary;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) cause the Indenture, if requ
ired by the TIA, to be qualified under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TIA in connection with the r
egistration of the Exchange Notes or Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, as the case may be,
and effect such changes to such documents as may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be required for them to be so qu
alified in accordance with the terms of the TIA
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and execute, and use its reasona
ble best efforts to cause the Indenture Trustee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to execute, all documents as may
be required to effect such changes, and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other forms and documents requir

ed to be filed with the SEC to enable such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents to be so qualified in
a timely manner;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) in the case of a Shelf Regis
tration, enter into such agreements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including underwriting agreemen
ts) as are customary in underwritten offerings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and consistent with the terms of
the Purchase Agreement and take all such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate actions as are reaso
nably requested in order to expedite or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilitate the registration or t
he disposition of such Registrable Securities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and in such connection, whether
or not an underwriting agreement is entered into
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and whether or not the registrat
ion is with respect to an underwritten offering,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if requested by (x) any Initial
Purchaser, in the case where such Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchaser holds Registrable Secu
rities acquired by such Initial Purchaser as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part of the Initial Purchasers'
initial distribution and (y) other Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes covered thereby: (i) make
such representations and warranties to Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Registrable Securities a
nd the underwriters (if any), with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the business of the Company and
its subsidiaries as then conducted and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement, Prospect
us and documents, if any, incorporated or deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be incorporated by reference
therein, in each case, as are customarily made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by issuers to underwriters in un
derwritten offerings, and confirm the same if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and when requested; (ii) obtain
opinions of counsel to the Company and updates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof (which may be in the for
m of a reliance letter) in form and substance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably satisfactory to the m
anaging underwriters (if any) and the Holders of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a majority in principal amount o
f the Registrable Securities being sold,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addressed to each selling Holder
and the underwriters (if any) covering the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters customarily covered in o
pinions requested in underwritten offerings and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such other matters as may be rea
sonably requested by such underwriters (it being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed that the matters to be co
vered by such opinions may be subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customary qualifications and exc
eptions); (iii) obtain "cold comfort" letters
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and updates thereof in form and
substance reasonably satisfactory to the
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql managing underwriters (if any) f
rom the independent certified public accountants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company (and, if necessar
y, any other independent certified public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accountants of any subsidiary of
the Company or of any business acquired by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company for which financial stat
ements and financial data are, or are required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be, included in the Registrat
ion Statement), addressed to each of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriters, such letters to be
in customary form and covering matters of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql type customarily covered in "col
d comfort" letters in connection with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwritten offerings and such
other matters as reasonably requested by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriters in accordance with
Statement on Auditing Standards No. 72 and (iv)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if an underwriting agreement is
entered into, the same shall contain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnification provisions and p
rocedures no less favorable than those set forth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Section 4 hereof (or such oth
er provisions and procedures acceptable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders of a majority in aggrega
te principal amount of Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covered by such Registration Sta
tement and the managing underwriters or agents)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to all parties to b
e indemnified pursuant to said Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including, without limitation,
such underwriters and selling Holders). The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above shall be done at each clos
ing under such underwriting agreement or, as and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent required thereunde
r and as consistent with the terms of, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Agreement;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (n) if (1) a Shelf Registration
is filed pursuant to Section 2(b) hereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (2) a Prospectus contained in
an Exchange Offer Registration Statement filed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 2(a) is requ
ired to be delivered under the Securities Act by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Participating Broker-Dealer
who seeks to sell Exchange Notes during the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Applicable Period, make reasonab
ly available for inspection by any selling
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of such Registrable Secur
ities being sold, or each such Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealer, as the case may b
e, any underwriter participating in any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition of Registrable Secur
ities, if any, and any attorney, accountant or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other agent retained by any such
selling Holder or each such Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealer, as the case may b
e, or underwriter (collectively, the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Inspectors"), at the offices wh
ere normally kept, during reasonable business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hours, all financial and other r
ecords, pertinent corporate documents and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties of the Company and it
s subsidiaries (collectively, the "Records") as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be reasonably necessary to
enable the Inspectors to exercise any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable due diligence respons
ibilities, and cause the officers, directors and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees of the Company and its
subsidiaries to supply all relevant information
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in each case reasonably requeste
d by any such Inspector in connection with such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement; provided
, however, that the foregoing inspection and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information gathering shall be c
oordinated on behalf of all such parties by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's-designated Holders' co
unsel, at the expense of such parties as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in Section 2(c) hereof
. Records of the Company and its subsidiaries,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Company determines, in
good faith, to be confidential and any records
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it notifies the Inspectors
are confidential shall not be disclosed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inspectors unless (i) the disclo
sure of such Records is necessary to avoid or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql correct a material misstatement
or omission in such Registration Statement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided that the Company shall
be consulted prior to any such disclosure, (ii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the release of such Records is o
rdered pursuant to a subpoena or other order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from a court of competent jurisd
iction or is necessary in connection with any
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action, suit or proceeding or (i
ii) the information in such Records has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made available to the public. Ea
ch selling Holder of such Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and each such Participating Brok
er-Dealer will be required to agree in writing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that information obtained by it
or any Inspector retained by it as a result of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such inspections shall be deemed
confidential and shall not be used by it or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inspector retained by it as the
basis for any market transactions in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities of the Company unless
and until such is made generally available to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the public. Each selling Holder
of such Registrable Securities and each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participating Broker-Dealer will
be required to further agree in writing that it

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will, upon learning that disclos
ure of such Records is sought in a court of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competent jurisdiction, give not
ice to the Company and allow the Company at its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense to undertake appropriate
action to prevent disclosure of the Records
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed confidential;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (o) comply with all applicable r
ules and regulations of the SEC so long
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as any provision of this Agreeme
nt shall be applicable and make generally
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available to its security holder
s an earning statement satisfying the provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 11(a) of the Securiti
es Act and Rule 158 thereunder (or any similar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rule promulgated under the Secur
ities Act) no later than 60 days after the end
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any 12-month period (or 120 d
ays after the end of any 12-month period if such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period is a fiscal year) (i) com
mencing at the end of any fiscal quarter in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which Registrable Securities are
sold to underwriters in a firm commitment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql best efforts underwritten offeri
ng and (ii) if not sold to underwriters in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an offering, commencing on the f
irst day of the first fiscal quarter of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company after the effective date
of a Registration Statement, which statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall cover said 12-month period
s;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (p) upon consummation of an Exch
ange Offer, if requested by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Trustee, obtain an opi
nion of counsel to the Company addressed to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indenture Trustee for the benefi
t of all Holders of Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participating in the Exchange Of
fer and which includes an opinion that (i) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company has duly authorized, exe
cuted and delivered the Exchange Notes, (ii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of the Exchange Notes const
itutes a legal, valid and binding obligation of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company, enforceable against
the Company in accordance with its terms (with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customary exceptions) and (iii)
the Indenture has been duly qualified under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TIA, or no such qualification is
required by the TIA;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (q) if an Exchange Offer is to b
e consummated, upon delivery of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities by Holder
s to the Company (or to such other Person as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directed by the Company ), in ex
change for the Exchange Notes, mark, or cause to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be marked, on such Registrable S
ecurities delivered by such Holders that such

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities are being
canceled in exchange for the Exchange Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and in no event shall such Regis
trable Securities be marked as paid or otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfied;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (r) cooperate with each seller o
f Registrable Securities covered by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement and each
underwriter, if any, participating in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition of such Registrable
Securities covered by a Registration Statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated hereby;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (s) use its reasonable best effo
rts to take all other steps necessary to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect the registration of the R
egistrable Securities covered by a Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement contemplated hereby;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (t) (A) in the case of the Excha
nge Offer Registration Statement (i) (a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicate in a "Plan of Distribut
ion" section contained in the Prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in the Exchange Offer
Registration Statement that any broker or dealer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered under the Exchange Ac
t who holds Notes that are Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and that were acquire
d for its own account as a result of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market-making activities or othe
r trading activities (other than Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities acquired directly fro
m the Company) (such broker or dealer, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Participating Broker-Dealer"),
may exchange such Notes pursuant to the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer; however, such Participati
ng Broker-Dealer may be deemed to be an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "underwriter" within the meaning
of the Securities Act and must, therefore,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver a prospectus meeting the
requirements of the Securities Act in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with any resales of t
he Exchange Notes received by such Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealer in the Exchange Of
fer, which prospectus delivery requirement may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be satisfied by the delivery by
such Participating Broker-Dealer of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus contained in the Exch
ange Offer Registration Statement and (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include in such "Plan of Distrib
ution" section all other information with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to such resales by Parti
cipating Broker-Dealers that the SEC may require

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in order to permit such resales
pursuant thereto, but such "Plan of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Distribution" shall not name any
such Participating Broker-Dealer or disclose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the amount of Exchange Notes hel
d by any such Participating Broker-Dealer except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent required by the Co
mmission as a result of a change in policy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql announced after the date of this
Agreement, (ii) furnish to each Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealer who has delivered
to the Company the notice referred to in Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(e), without charge, as many co
pies of the Prospectus included in the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer Registration Statement, in
cluding any preliminary prospectus, and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment or supplement thereto,
as such Participating Broker-Dealer may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably request (the Company
hereby consents to the use of the Prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forming part of the Exchange Off
er Registration Statement or any amendment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplement thereto by any Person
subject to the prospectus delivery requirements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Securities Act, including
all Participating Broker-Dealers, in connection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the sale or transfer of the
Exchange Notes covered by the Prospectus or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment or supplement thereto)
, (iii) use its reasonable best efforts to keep
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Offer Registration
Statement effective and to amend and supplement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Prospectus contained therein
in order to permit such Prospectus to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lawfully delivered by all Person
s subject to the prospectus delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of the Securities A
ct for such period of time as such Persons must
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with such requirements un
der the Securities Act and applicable rules and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations in order to resell t
he Exchange Notes; provided, however, that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period shall not be required to
exceed 90 days (or such longer period if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extended pursuant to the last se
ntence of Section 3 hereof) (the "Applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period") and (iv) include in the
transmittal letter or similar documentation to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be executed by an exchange offer
ee in order to participate in the Exchange Offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) the following provision:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "If the exchange offeree is a br
oker-dealer holding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities acquired
for its own account as a result of
r trading activities, it will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver a prospectus meeting the
requirements of the Securities Act

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with any resale of
Exchange Notes received in respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Registrable Securities p
ursuant to the Exchange Offer,"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (y) a statement to the effec
t that by a Participating Broker-Dealer making
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the acknowledgement described in
clause (x) and by delivering a Prospectus in
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the exchange of
Registrable Securities, the Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealer will not be deemed
to admit that it is an underwriter within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning of the Securities Act; a
nd
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) in the case of any Exchange
Offer Registration Statement, deliver to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Initial Purchasers or to ano
ther representative of the Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealers, if requested by
the Initial Purchasers or such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative of the Participat
ing Broker-Dealers, on behalf of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participating Broker-Dealers upo
n consummation of the Exchange Offer (i) an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opinion of counsel in form and s
ubstance reasonably satisfactory to the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers or such other represe
ntative of the Participating Broker-Dealers,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covering the matters customarily
covered in opinions requested in connection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Exchange Offer Registration
Statements and such other matters as may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably requested (it being a
greed that the matters to be covered by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opinion may be subject to custom
ary qualifications and exceptions), (ii) an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer's certificate containing
certifications substantially similar to those
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in the certificate del
ivered pursuant to Section 8(c) of the Purchase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and such additional ce
rtifications as are customarily delivered in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public offering of debt securiti
es and (iii) as well as upon the effectiveness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Exchange Offer Registrati
on Statement, a comfort letter, in each case, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customary form as permitted by S
tatement on Auditing Standards No. 72. Each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the foregoing shall be consisten
t with the terms of the Purchase Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company may require each sel

ler of Registrable Securities as to which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any registration is being effect
ed to furnish to the Company such information
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regarding such seller as may be
required by the staff of the SEC to be included
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in a Registration Statement. The
Company may exclude from such registration the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities of any se
ller who unreasonably fails to furnish such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information within a reasonable
time after receiving such request. The Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not have any obligation to
register under the Securities Act the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities of a sell
er who so fails to furnish such information.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the case of (1) a Shelf Regis
tration Statement or (2) Participating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Broker-Dealers who have notified
the Company that they will be utilizing the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus contained in the Exch
ange Offer Registration Statement as provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(t) hereof, are seeking
to sell Exchange Notes and are required to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver Prospectuses, each Holde
r agrees that, upon receipt of any notice from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company of the happening of
any event of the kind described in Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(e)(ii), 3(e)(iii), 3(e)(iv), 3
(e)(v) or 3(e)(vi) hereof, such Holder will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forthwith discontinue dispositio
n of Registrable Securities pursuant to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement until suc
h Holder's receipt of the copies of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemented or amended Prospect
us contemplated by Section 3(i) hereof or until
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it is advised in writing (the "A
dvice") by the Company that the use of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable Prospectus may be res
umed, and, if so directed by the Company, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder will deliver to the Compa
ny (at the Company's expense) all copies in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder's possession, other than
permanent file copies then in such Holder's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possession, of the Prospectus co
vering such Registrable Securities or Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, as the case may be, curre
nt at the time of receipt of such notice. If the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall give any such noti
ce to suspend the disposition of Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities or Exchange Notes, as
the case may be, pursuant to a Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement, the Company shall fil
e and use its best efforts to have declared
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective (if an amendment) as s
oon as practicable an amendment or supplement to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Registration Statement and s
hall extend the period during which such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement shall be
maintained effective pursuant to this Agreement

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the number of days in the per
iod from and including the date of the giving of
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such notice to and including the
date when the Company shall have made available
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Holders (x) copies of the
supplemented or amended Prospectus necessary to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resume such dispositions or (y)
the Advice.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Indemnification.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) In connection with any Regis
tration Statement, the Company shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnify and hold harmless each
Initial Purchaser, each Holder, each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriter who participates in
an offering of the Registrable Securities, each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participating Broker-Dealer, and
each Person, if any, who controls any of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties within the meaning of Se
ction 15 of the Securities Act (each an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Indemnified Party") from and ag
ainst any and all losses, claims, damages or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities, joint or several, t
o which they or any of them may become subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Securities Act or any
other statute or common law and shall reimburse
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each such Indemnified Party for
any legal or other expenses (including, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent hereinafter provided, rea
sonable counsel fees) as and when incurred by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql them in connection with investig
ating any such losses, claims, damages or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities or in connection wit
h defending any actions, insofar as such losses,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims, damages, liabilities, ex
penses or actions arise out of or are based upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any untrue statement or alleged
untrue statement of a material fact contained in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any preliminary prospectus or Pr
ospectus, or in a Registration Statement, or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission or alleged omission to
state therein a material fact required to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stated therein or necessary to m
ake the statements therein, in the light of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances under which they w
ere made, not misleading; provided, however,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the indemnity agreement con
tained in this Section 4 as to any Indemnified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall not apply to any suc
h losses, claims, damages, liabilities, expenses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or actions arising out of, or ba
sed upon, any such untrue statement or alleged

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql untrue statement, or any such om
ission or alleged omission, if such statement or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission was made in reliance up
on and in conformity with information furnished
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing to the Company by suc
h Indemnified Party expressly for use in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the preparation
of a Registration Statement or the related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus or any amendment or s
upplement to either thereof, or arising out of,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or based upon, statements in or
omissions from the part of the Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement which shall constitute
the Statement of Eligibility and Qualification
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Trustee under the TIA; an
d provided further, that the indemnity agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in this Section 4 with
respect to the related Prospectus or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment or supplement thereto,
(if the Company shall have furnished any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment or supplement thereto)
shall not inure to the benefit of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indemnified Party on account of
any such losses, claims, damages, liabilities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses or actions arising from
the sale of Registrable Securities to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person if a copy of the related
Prospectus (exclusive of any documents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference) shall
not have been given or sent to such person by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or on behalf of such Indemnified
Party with or prior to the written confirmation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the sale involved unless, wit
h respect to the delivery of any amendment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplement to the Prospectus, th
e alleged omission or alleged untrue statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was not corrected in such amendm
ent or supplement at the time of such written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confirmation. The indemnity agre
ement of the Company contained in this Section 4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall remain operative and in fu
ll force and effect regardless of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of this Agreement or
of any investigation made by or on behalf of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Indemnified Party, and shall
survive the registration of the Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each Holder shall indemnify,
defend and hold harmless the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any underwriter and other se
lling Holder, and their respective officers and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors, and each person who c
ontrols the Company or any underwriter or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other selling Holder within the
meaning of Section 15 of the Securities Act,
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from and against any and all los
ses, claims, damages or liabilities, joint or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql several, to which they or any of
them may become subject under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act or any other statute or comm
on law and shall reimburse each of them for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal or other expenses (includi
ng, to the extent hereinafter provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable counsel fees) as and
when incurred by them in connection with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigating any such losses, c
laims, damages or liabilities or in connection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with defending any actions, inso
far as such losses, claims, damages,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities, expenses or actions
arise out of or are based upon any untrue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement or alleged untrue stat
ement of a material fact contained in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement or the re
lated Prospectus, or the omission or alleged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission to state therein a mate
rial fact required to be stated therein or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to make the statements
therein, in light of the circumstances under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which they were made, not mislea
ding, if such statement or omission was made in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reliance upon and in conformity
with information furnished in writing to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company by or on behalf of such
Holder, expressly for use in connection with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preparation of a Registration St
atement or the related Prospectus or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment or supplement to eithe
r thereof. The indemnity agreement of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective Holders contained in
this Section 4 shall remain operative and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql full force and effect regardless
of any termination of this Agreement or of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigation made by or on beha
lf of the Company, any underwriter, or any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selling Holder, or their respect
ive directors or officers, or any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql controlling person, and shall su
rvive the registration of the Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities; provided, however, t
hat, no such Holder shall be liable for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims hereunder in excess of th
e amount of net proceeds received by such Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the sale of Registrable Sec
urities pursuant to a Registration Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Company and the Holders
each shall, upon the receipt of notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the commencement of any actio
n against it or any person controlling it as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aforesaid, in respect of which i
ndemnity may be sought on account of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnity agreement contained he

rein, promptly give written notice of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commencement thereof to the part
y or parties against whom indemnity shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sought hereunder, but the failur
e to notify such indemnifying party or parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any such action shall not rel
ieve such indemnifying party or parties from any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability hereunder to the exten
t such indemnifying party or parties is/are not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially prejudiced as a resul
t of such failure to notify and in any event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not relieve such indemnify
ing party or parties from any liability that it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or they may have to the indemnif
ied party otherwise than on account of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnity agreement. In case suc
h notice of any such action shall be so given,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such indemnifying party shall be
entitled to participate at its own expense in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the defense, or, if it so elects
, to assume (in conjunction with any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnifying parties) the defens
e of such action, in which event such defense
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be conducted by counsel ch
osen by such indemnifying party or parties and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory to the indemnified
party or parties who shall be defendant or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defendants in such action, and s
uch defendant or defendants shall bear the fees
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and expenses of any additional c
ounsel retained by them; but if the indemnifying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party shall elect not to assume
the defense of such action, such indemnifying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party will reimburse such indemn
ified party or parties for the reasonable fees
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and expenses of any counsel reta
ined by them; provided, however, if the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defendants in any such action (i
ncluding impleaded parties) include both the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnified party and the indemn
ifying party and counsel for the indemnifying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party shall have reasonably conc
luded that there may be a conflict of interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql involved in the representation b
y a single counsel of both the indemnifying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party and the indemnified party,
the indemnified party or parties shall have the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to select separate counsel
, satisfactory to the indemnifying party, whose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable fees and expenses sha
ll be paid by such indemnifying party, to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participate in the defense of su
ch action on behalf of such indemnified party or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties (it being understood, ho

wever, that the indemnifying party shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liable for the fees and expenses
of more than one separate counsel (in addition
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to local counsel) representing t
he indemnified parties who are parties to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action). The Company and the Hol
ders each agree that without the other party's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior written consent, which con
sent shall not be unreasonably withheld, it will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not settle, compromise or consen
t to the entry of any judgment in any claim in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of which indemnification
may be sought under the indemnification
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Agreement, un
less such settlement, compromise or consent (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql includes an unconditional releas
e of such other party from all liability arising
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql out of such claim and (ii) does
not include a statement as to or an admission of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fault, culpability or a failure
to act by or on behalf of such other party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) If the indemnification provi
ded for in (a) or (b) above shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unenforceable under applicable l
aw by an indemnified party, each indemnifying
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party agrees to contribute to su
ch indemnified party with respect to any and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql losses, claims, damages, liabili
ties and expenses for which each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnification provided for in
(a) or (b) above shall be unenforceable, in such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proportion as shall be appropria
te to reflect the (i) relative fault of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnifying party on the one ha
nd and the indemnified party on the other in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the statements o
r omissions which have resulted in such losses,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims, damages, liabilities and
expenses, the relative benefits received by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each indemnifying party on the o
ne hand and the indemnified party on the other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hand from the offering of the Re
gistrable Securities pursuant to this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any other relevant equitable
considerations; provided, however, that no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnified party guilty of frau
dulent misrepresentation (within the meaning of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 11(f) of the Securities
Act) shall be entitled to contribution from any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnifying party not guilty of
such fraudulent misrepresentation. Relative
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fault shall be determined by ref
erence to, among other things, whether the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql untrue or alleged untrue stateme
nt of a material fact or the omission or alleged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission to state a material fac
t relates to information supplied by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnifying party or the indemn
ified party and each such party's relative

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intent, knowledge, access to inf
ormation and opportunity to correct or prevent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such untrue statement or omissio
n. The Company and each of the Holders agree
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that it would not be just and eq
uitable if contributions pursuant to this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (d) were to be determi
ned by pro rata allocation (even if the Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were treated as one entity for s
uch purpose) or by any other method of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocation which does not taken
account of the equitable consideration referred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to above. Notwithstanding the pr
ovisions of this Section 4, no Holder shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to contribute in excess
of the amount equal to the excess of (i) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql net proceeds received by such Ho
lder from the sale of Registrable Securities by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it to Eligible Holders, over (ii
) the amount of any damages which such Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has otherwise been required to p
ay by reason of any such untrue or alleged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql untrue statement or omission or
alleged omission. The obligations of each Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to contribute pursuant to this S
ection 4 are several and not joint and shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceed the same proportion of al
l contributions of Holders required hereunder as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Holder's Registrable Securi
ties sold pursuant to the Registration Statement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is of the total amount of Regist
rable Securities sold pursuant to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Participation in Underwritten
Registrations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No Holder may participate in any
underwritten registration hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless such Holder (a) agrees to
sell such Holder's Registrable Securities on
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the basis provided in any underw
riting arrangements approved by the Persons
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled hereunder to approve su
ch arrangements and (b) completes and executes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all reasonable questionnaires, p
owers of attorney, indemnities, underwriting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements, lock-up letters and
other documents reasonably required under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of such underwriting arran
gements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Selection of Underwriters.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Holders of Registrable Secur
ities covered by the Shelf Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement who desire to do so ma
y sell the securities covered by such Shelf
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration in an underwritten
offering. In any such underwritten offering, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underwriter or underwriters and
manager or managers that will administer the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offering will be selected by the
Holders of a majority in aggregate principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the Registrable Securi
ties included in such offering; provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that such underwriters
and managers must be reasonably satisfactory to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Miscellaneous.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Rule 144 and Rule 144A. To t
he extent the Company is subject to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reporting requirements of Sectio
n 13 or 15 of the Exchange Act and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities remain ou
tstanding, the Company will file the reports
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be filed by it under
the Securities Act and Section 13(a) or 15(d)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Exchange Act and the rule
s and regulations adopted by the SEC thereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To the extent the Company is not
required to file such reports, it will, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the request of any Holder of Reg
istrable Securities (a) make publicly available
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such information as is necessary
to permit sales of their securities pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rule 144 under the Securities Ac
t, (b) deliver such information to prospective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasers as is necessary to pe
rmit sales of their securities pursuant to Rule
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 144A under the Securities Act an
d take such further action as any Holder of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities may reaso
nably request and (c) take such further action
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that is reasonable in the circum
stances, in each case, to the extent required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time to enable such
Holder to sell its Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without registration under the S
ecurities Act within the limitation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exemptions provided by (i) Rule
144 under the Securities Act, as such rule may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be amended from time to time, (i
i) Rule 144A under the Securities Act, as such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rule may be amended from time to
time or (iii) any similar rules or regulations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter adopted by the SEC. Up
on the request of any Holder of Registrable

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, the Company will del
iver to such Holder a written statement as to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether it has complied with suc
h requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) No Inconsistent Agreements.
The Company has not entered into nor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will the Company on or after the
date of this Agreement enter into any agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is inconsistent with the r
ights granted to the Holders of Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities in this Agreement or
otherwise conflicts with the provisions hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The rights granted to the Holder
s hereunder do not in any way conflict with and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are not inconsistent with the ri
ghts granted to the holders of the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other issued and outstanding sec
urities under any such agreements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Amendments and Waivers. The
provisions of this Agreement, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of this sentence,
may not be amended, modified or supplemented,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and waivers of consents to depar
tures from the provisions hereof may not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given unless the Company has obt
ained the written consent of Holders of at least
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a majority in aggregate principa
l amount of the outstanding Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities affected by such amen
dment, modification, supplement, waiver or
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql departure; provided no departure
with respect to the provisions of Section 4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof shall be effective as aga
inst any Holder of Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the consent of such Hold
er. Notwithstanding the foregoing sentence, (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement may be amended, w
ithout the consent of any Holder of Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities, by written agreement
signed by the Company and the Indenture
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee, to cure any ambiguity,
correct or supplement any provision of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement that may be defective
or inconsistent with any other provision of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or to make any other p
rovisions with respect to matters or questions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising under this Agreement whi
ch shall not be inconsistent with other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Agreement and
shall not adversely affect the interests of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders in any material respect,
(ii) without the consent of any Holder of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrable Securities, this Agr
eement may be amended, modified or supplemented,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and waivers and consents to depa
rtures from the provisions hereof may be given,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by written agreement signed by t
he Company and the Indenture Trustee to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent that any such amendment,
modification, supplement, waiver or consent is,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in their reasonable judgment, ne
cessary or appropriate to comply with applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law (including any interpretatio
n of the staff of the SEC) or any change therein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (iii) to the extent any prov
ision of this Agreement relates to the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers, such provision may b
e amended, modified or supplemented, and waivers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or consents to departures from s
uch provisions may be given, by written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement signed by the Company
and the Indenture Trustee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Notices. All notices and oth
er communications provided for or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted hereunder shall be mad
e in writing by hand-delivery, registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first-class mail, telecopier, or
any courier guaranteeing overnight delivery (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if to a Holder, at the most curr
ent address given by such Holder to the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by means of a notice given in ac
cordance with the provisions of this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7(d), which address initially is
, with respect to the Initial Purchasers, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addresses set forth in the Purch
ase Agreement and (ii) if to the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql initially at the Company's addre
ss set forth in the Purchase Agreement and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter at such other address
, notice of which is given in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of this Section 7
(d).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All such notices and communicati
ons shall be deemed to have been duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given: at the time delivered by
hand, if personally delivered; five Business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Days after being deposited in th
e mail, postage prepaid, if mailed; when receipt
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is acknowledged, if telecopied;
and on the next Business Day, if timely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to an air courier guar
anteeing overnight delivery.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Copies of all such notices, dema
nds, or other communications shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concurrently delivered by the Pe
rson giving the same to the Indenture Trustee,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the address specified in the
Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Successors and Assigns. This
Agreement shall inure to the benefit of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and be binding upon the successo
rs, assigns and transferees of each Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchaser, including, without li
mitation and without the need for an express
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignment, subsequent Holders;
provided, however, that nothing herein shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to permit any assignment,
transfer or other disposition of Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities in violation of the t
erms of the Purchase Agreement or the Indenture.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any transferee of any Holder
shall acquire Registrable Securities, in any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner, whether by operation of
law or otherwise, such Registrable Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be held subject to all of
the terms of this Agreement, and by taking and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holding such Registrable Securit
ies, such Person shall be conclusively deemed to
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have agreed to be bound by and t
o perform all of the terms and provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and such Person s
hall be entitled to receive the benefits hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Third Party Beneficiary. Eac
h Initial Purchaser shall, when it no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql longer holds any beneficial inte
rest in Notes or Exchange Notes, be a third
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party beneficiary of the agreeme
nts made hereunder among the Company and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders and shall have the right
to enforce such agreements directly to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent it deems such enforcement
necessary or advisable to protect its rights or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rights of Holders hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Counterparts. This Agreement
may be executed in any number of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterparts and by the parties
hereto in separate counterparts, each of which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when so executed shall be deemed
to be an original and all of which taken
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together shall constitute one an
d the same agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) Headings. The headings in th
is Agreement are for convenience of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference only and shall not lim
it or otherwise affect the meaning hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) GOVERNING LAW. THIS AGREEMEN
T SHALL BE DEEMED TO HAVE BEEN MADE IN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE STATE OF NEW YORK. THE VALID

ITY AND INTERPRETATION OF THIS AGREEMENT, AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE TERMS AND CONDITIONS SET FOR
TH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROVISIONS RELATING TO CONFLICTS
OF LAWS. EACH OF THE PARTIES HERETO AGREES TO
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBMIT TO THE JURISDICTION OF TH
E COURTS OF THE STATE OF NEW YORK IN ANY ACTION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) Severability. In the event t
hat any one or more of the provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained herein, or the applica
tion thereof in any circumstance, is held
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invalid, illegal or unenforceabl
e, the validity, legality and enforceability of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such provision in every othe
r respect and of the remaining provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained herein shall not be af
fected or impaired thereby.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) Securities Held by the Compa
ny or its Affiliates. Whenever the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent or approval of Holders o
f a specified percentage of Registrable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities is required hereunder
, Registrable Securities held by the Company or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its affiliates (as such t
erm is defined in Rule 405 under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act) shall not be counted in det
ermining whether such consent or approval was
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given by the Holders of such req
uired percentage.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date first written above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Kirk R. Oliver
date first above written:
-------------------------------Name: Kirk R. Oliver

Title:
Vice President
Accepted and delivered as of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LEHMAN BROTHERS INC.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Martin Goldberg
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Martin Goldberg
Senior Vice President
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as Representative of the Initial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchasers
d\plain\cf1\f50\fs16\ql HUNTON & WILLIAMS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ENERGY PLAZA 30TH FLOOR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1601 BRYAN STREET
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DALLAS, TEXAS 75201-3402
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 5(a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql October 1, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ladies and Gentlemen:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reference is made to the propose
d exchange (Exchange Offer) by Oncor Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delivery Company, a Texas corpor
ation (Company), of any and all of the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding 6.375% Senior Secure
d Notes due 2012 (Old 2012 Notes) for an equal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of the Company'
s 6.375% Exchange Senior Secured Notes due 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (New 2012 Notes) and any and all
of the Company's outstanding 7.000% Senior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Notes due 2032 (Old 2032
Notes and together with the Old 2012 Notes, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes) for an equal principa
l amount of the Company's 7.000% Exchange Senior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Notes due 2032 (New 2032
Notes and, together with the New 2012 Notes,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the New Notes), all as contempla
ted in the registration statement on Form S-4
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Registration Statement) to be f
iled by the Company, on or about the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, with the Securities and
Exchange Commission under the Securities Act of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1933, as amended. In connection
therewith, we have reviewed such documents and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql records as we have deemed necess
ary to enable us to express an opinion on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters covered hereby.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Based upon the foregoing, we are

of the opinion that:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Company is a corporation
duly incorporated, validly existing and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good standing under the laws of
the State of Texas.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. In relation to the Exchange O
ffer, all requisite action necessary to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql make the New Notes legal, valid
and binding obligations of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforceable against the Company
in accordance with their terms, subject to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect of bankruptcy, insolvency
, reorganization, receivership, fraudulent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance, fraudulent transfer,
moratorium and other laws affecting the rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and remedies of creditors and mo
rtgagees generally and general principles of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equity, shall have been taken wh
en the Exchange Offer shall have been completed
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Page 2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Old Notes validly tender
ed pursuant thereto shall have been exchanged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for New Notes as contemplated in
the Registration Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This opinion is limited to the l
aws of the State of Texas, the federal laws of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the United States of America and
, to the extent set forth herein, the laws of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the State of New York. As to all
matters of New York law, we have, with your
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent, relied upon an opinion
of even date herewith addressed to you by Thelen
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reid & Priest LLP, New York, New
York, counsel for the Company, which is being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as an exhibit to the Regis
tration Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We hereby consent to the use of
our name in the aforementioned Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement and to the use of this
opinion as an exhibit thereto.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/Hunton & Williams

d\plain\cf1\f50\fs16\ql THELEN REID & PRIEST LLP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NEW YORK
ATTORNEYS AT LAW
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SAN FRANCISCO
40
WEST 57TH STREET
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WASHINGTON, D.C.
NEW
YORK, N.Y. 10019-4097
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LOS ANGELES
TEL (212)
603-2000 FAX (212) 603-2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SILICON VALLEY
w
ww.thelenreid.com
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MORRISTOWN, N.J.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 5(b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reference is made to the propose
d exchange (Exchange Offer) by Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Delivery Company, a Tex
as corporation (Company), of any and all of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's outstanding 6.375% Sen
ior Secured Notes due 2012 (Old 2012 Notes) for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an equal principal amount of the
Company's 6.375% Exchange Senior Secured Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due 2012 (New 2012 Notes), and a
ny and all of the Company's outstanding 7.000%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Secured Notes due 2032 (O
ld 2032 Notes, and together with the Old 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, the Old Notes) for an equ
al principal amount of the Company's 7.000%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Senior Secured Notes du
e 2032 (New 2032 Notes and, together with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New 2012 Notes, the New Notes),
all as contemplated in the registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement on Form S-4 (Registrat
ion Statement) to be filed by the Company, on or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql about the date hereof, with the
Securities and Exchange Commission under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act of 1933, as amend
ed. In connection therewith, we have reviewed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such documents and records as we
have deemed necessary to enable us to express
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an opinion on the matters covere
d hereby.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Based upon the foregoing, we are
of the opinion that:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Company is a corporation
duly incorporated, validly existing and in

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good standing under the laws of
the State of Texas.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. In relation to the Exchange O
ffer, all requisite action necessary to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql make the New Notes legal, valid
and binding obligations of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforceable against the Company
in accordance with their terms, subject to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect of bankruptcy, insolvency
, reorganization, receivership, fraudulent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance, fraudulent transfer,
moratorium and other laws affecting the rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and remedies of creditors and mo
rtgagees generally and general principles of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equity, shall have been taken wh
en the Exchange Offer shall have been completed
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Page 2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Old Notes validly tender
ed pursuant thereto shall have been exchanged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for New Notes as contemplated in
the Registration Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We are further of the opinion th
at the information contained in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement under MAT
ERIAL UNITED STATES FEDERAL INCOME TAX
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSIDERATIONS constitutes an ac
curate description, in general terms, of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicated federal income tax con
sequences to holders of the New Notes of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange offer contemplated in t
he Registration Statement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This opinion is limited to the l
aws of the State of New York, the federal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws of the United States of Ame
rica and, to the extent set forth herein, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws of the State of Texas. As t
o all matters of Texas law, we have, with your
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent, relied upon an opinion
of even date herewith addressed to you by Hunton
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql & Williams, Dallas, Texas, couns
el for the Company, which is being filed as an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exhibit to the Registration Stat
ement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We hereby consent to the use of
our name in the aforementioned Registration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement and to the use of this
opinion as an exhibit thereto.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/Thelen Reid & Priest LLP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THELEN REID & PRIEST LLP
d\plain\cf1\f50\fs16\ql Exhibit 10(b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU ENERGY COMPANY LLC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU US HOLDINGS COMPANY,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AS BORROWERS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $400,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CREDIT AGREEMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dated as of August 30, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BARCLAYS BANK PLC,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AS ADMINISTRATIVE AGENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BARCLAYS CAPITAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AS LEAD ARRANGER AND SOLE BOOKRU
NNER
\page
Page
---\par\pard\plain\fs16
.......................................1
......................................15
......................................16
......................................16
e.....................................17
......................................18
; Evidence of Indebtedness............18
......................................19
......................................19
Interest..............................19
duction of Commitments................20
......................................20
ts; Change in Circumstances...........21
......................................23
......................................23
......................................23
......................................24
......................................24
itments Under Certain Circumstances...27
rs....................................28
......................................28
......................................28
Section
------Article I
DEFINITIONS; CONSTRUCTION
Section 1.01. Defined Terms.....
Section 1.02. Terms Generally...
Article II
THE CREDITS
Section 2.01. Commitments.......
Section 2.02. Loans.............
Section 2.03. Borrowing Procedur
Section 2.04. Fees..............
Section 2.05. Repayment of Loans
Section 2.06. Interest on Loans.
Section 2.07. Default Interest..
Section 2.08. Alternate Rate of
Section 2.09. Termination and Re
Section 2.10. Prepayment........
Section 2.11. Reserve Requiremen
Section 2.12. Change in Legality
Section 2.13. Pro Rata Treatment
Section 2.14. Sharing of Setoffs
Section 2.15. Payments..........
Section 2.16. Taxes.............
Section 2.17. Assignment of Comm
Article III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Organization; Powe
Section 3.02. Authorization.....
Section 3.03. Enforceability....
vals..................................28
ts....................................28
......................................29
gulations.............................29
Act; Public Utility Holding
........................30
tements...............................30
......................................30
lans..................................30
iaries................................31
ers...................................31
\page
......................................31
es....................................32
......................................32
......................................32
Loans................................33
......................................34
ws; Business And Properties...........34
ts, Reports, etc......................34
......................................36
......................................36
s; Access to Properties And
........................36
Section 3.04. Governmental Appro

Section 3.05. Financial Statemen
Section 3.06. Litigation........
Section 3.07. Federal Reserve Re
Section 3.08. Investment Company
Company Act.....................
Section 3.09. No Material Missta
Section 3.10. Taxes.............
Section 3.11. Employee Benefit P
Section 3.12. Significant Subsid
Section 3.13. Environmental Matt
Section 3.14. Solvency..........

Section 3.15. Liquidity Faciliti
Section 3.16. Holdings Facility.
Article IV
CONDITIONS
Section 4.01. Initial Loan......
Section 4.02. Conditions for All
Article V
Covenants
Section 5.01. Existence.........
Section 5.02. Compliance With La
Section 5.03. Financial Statemen
Section 5.04. Insurance.........
Section 5.05. Taxes, etc........
Section 5.06. Maintaining Record
Inspections.....................
......................................37
......................................37
rgers, Sales and Acquisitions of
iaries..................37
ns....................................37
age...................................39
ion Ratio.............................40
ents..................................40
ductions of Commitments...............40
......................................45
ent...................................45
......................................45
igns..................................46
y.....................................48
......................................50
......................................50
......................................50
......................................51
......................................51
......................................51
......................................51
tation................................51
\page
Section 5.07. Erisa.............

Section 5.08. Use of Proceeds...
Section 5.09. Consolidations, Me
Assets and Investments in Subsid
Section 5.10. Limitations on Lie
Section 5.11. Fixed Charge Cover
Section 5.12. Equity Capitalizat
Section 5.13. Restrictive Agreem
Section 5.14. Prepayments And Re
Article VI
EVENTS OF DEFAULT
Article VII
THE AGENT
Article VIII
MISCELLANEOUS
Section 8.01. Notices...........
Section 8.02. Survival Of Agreem
Section 8.03. Binding Effect....
Section 8.04. Successors and Ass
Section 8.05. Expenses; Indemnit
Section 8.06. Right of Setoff...
Section 8.07. Applicable Law....
Section 8.08. Waivers; Amendment
Section 8.09. Entire Agreement..
Section 8.10. Severability......
Section 8.11. Counterparts......
Section 8.12. Headings..........
Section 8.13. Interest Rate Limi
ii
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.14. Jurisdiction; Venu

e.....................................52
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.15. Confidentiality...
......................................52
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBITS AND SCHEDULES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A
- Form of Borrow
ing Request
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit B
- Form of Assign
ment and Acceptance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule 2.01 - Commitments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule 3.15 - Liquidity Faci
lities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule 5.13 - Restrictive Ag
reements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql iii
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CREDIT AGREEMENT (the "AGREEMENT
"), dated as of August 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2002, among TXU Energy Company L
LC, a Delaware limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability company ("ENERGY"), On
cor Electric Delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, a Texas corporation ("O
ncor"), TXU US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, a Texas corporation ("H
OLDINGS" and, together with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy and Oncor, the "BORROWERS
", and each individually, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "BORROWER"), the lenders listed
in Schedule 2.01 (together
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with their successors and assign
s, the "LENDERS") and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Barclays Bank PLC ("BARCLAYS BAN
K"), as administrative agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the Lenders (in such capacit
y, the "AGENT").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Borrowers have requested the
Lenders to provide the credit facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinafter described in the amo
unts and on the terms and conditions set forth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, the Lenders have so agre
ed on the terms and conditions set forth herein,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Agent has agreed to act
as agent for the Lenders, on such terms and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accordingly, the parties hereto
agree as follows:
ollowing terms shall have the meanings
rowing comprised of ABR Loans.
earing interest at a rate determined
se Rate in accordance with the provisions
Loan converted (pursuant to Section 2.08 or
nterest at a rate determined by reference
e date as of which a person or group
s more than 30% of any outstanding class of
meaning of Section 13(d) or 14(d) of the
rules and regulations thereunder).
d with respect to a specified person,
indirectly controls or is controlled by or
person specified.
iven such term in the preamble hereto.
ng given such term in the preamble
, for any day, a rate per annum
to the next 1/16 of 1%) equal to the
\page
Effective Rate in effect on such day plus
effect on such day. For purposes hereof,
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINED TERMS.
As used in this Agreement, the f
specified below:
"ABR BORROWING" shall mean a Bor
"ABR LOAN" shall mean any Loan b
by reference to the Alternate Ba
of Article II or any Eurodollar
2.12(a)(ii)) to a loan bearing i
to the Alternate Base Rate.
"ACQUISITION DATE" shall mean th
of related persons first acquire
Voting Shares of TXU (within the
Exchange Act, and the applicable
"AFFILIATE" shall mean, when use
another person that directly or
is under common control with the
"AGENT" shall have the meaning g
"AGREEMENT" shall have the meani
hereto.
"ALTERNATE BASE RATE" shall mean
(rounded upwards, if necessary,
greater of (i) the Federal Funds

0.50% and (ii) the Prime Rate in
"PRIME RATE" shall mean the rate
of interest per annum publicly announced

nk as its prime rate in effect at its
y; each change in the Prime Rate shall be
e is publicly announced as effective; and
hall mean, for any day, the weighted
t Federal funds transactions with members
ranged by Federal funds brokers, as
Business Day by the Federal Reserve Bank of
t so released for any day which is a
rage (rounded upwards to the next 1/100th
s Bank, of the quotations for the day of
rclays Bank from three Federal funds
elected by it. If for any reason Barclays
h determination shall be conclusive absent
rclays Bank shall, upon request, provide to
icate setting forth in reasonable detail
) that it is unable to ascertain the
any reason, including the inability of
nt quotations in accordance with the terms
shall be determined without regard to
of this definition until the circumstances
longer exist. Any change in the Alternate
Prime Rate or the Federal Funds Effective
ffective date of such change in the Prime
ive Rate, respectively.
with respect to any Borrower for any
rcentage per annum set forth below
an in the column under the Applicable
such time; provided that, any change in
ower shall be effective on the date on
from time to time by Barclays Ba

principal office in New York Cit
effective on the date such chang
"FEDERAL FUNDS EFFECTIVE RATE" s
average of the rates on overnigh
of the Federal Reserve System ar
released on the next succeeding
New York, or, if such rate is no
Business Day, the arithmetic ave
of 1%), as determined by Barclay
such transactions received by Ba
brokers of recognized standing s
Bank shall have determined (whic
manifest error; provided that Ba
the applicable Borrower a certif
the basis for such determination
Federal Funds Effective Rate for
Barclays Bank to obtain sufficie
thereof, the Alternate Base Rate
clause (i) of the first sentence
giving rise to such inability no
Base Rate due to a change in the
Rate shall be effective on the e
Rate or the Federal Funds Effect
"APPLICABLE MARGIN" shall mean,
Type of Loan at any time, the pe
corresponding to such Type of Lo
Rating Level of such Borrower at
the Applicable Margin for a Borr
cy announces any change in the Debt Rating
===============================================
evel 2
Level 3
Level 4
------------------\par\pard\plain\fs16
.850%
1.050%
1.250%
0
0
.250%
===============================================
mean, for any Borrower at any time,
row next to the then applicable Debt
re is a difference of one level in the
signed by S&P and Moody's, then the higher
rposes of determining the Applicable
nd if there is a difference of more than
signed by S&P and Moody's for such
ne level higher than the lower Debt Rating
ermining the Applicable Rating Level of
\page
Applicable Rating Level of any Borrower
n which the applicable rating agency
icable Debt Rating of such Borrower.
================================
which the applicable rating agen

of such Borrower.
================================
Applicable
Rating
Level
Level 1
----------
-------
Percentage Per Annum

Eurodollar
.625%
Margin
ABR
Margin
================================
"APPLICABLE RATING LEVEL" shall
the level set forth below in the
Ratings of such Borrower. If the
Debt Ratings of such Borrower as
Debt Rating shall be used for pu
Rating Level for such Borrower a
one level in the Debt Ratings as
Borrower, then the Debt Rating o
will be used for purposes of det
such Borrower. Any change in the

shall be effective on the date o
announces any change in the appl
================================
Applicable Rating Level
-------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
1
2
3
4
================================
l mean an assignment and acceptance
assignee in the form of Exhibit B.
eaning given such term in the
Governors of the Federal Reserve
the Board of Directors or analogous
ny duly authorized committee thereof.
g given such term in the preamble
f Loans of a single Type made by the
to which a single Interest Period is in
request made pursuant to Section
S&P Debt Rating

Moody's Debt Rating
-------------------------------BBB+ or better
Baa1 or better
-------------------------------BBB
Baa2
-------------------------------BBBBaa3
-------------------------------BB+ or below*
Ba1 or below*
================================
* or unrated
"ASSIGNMENT AND ACCEPTANCE" shal
entered into by a Lender and an
"BARCLAYS BANK" shall have the m
preamble.
"BOARD" shall mean the Board of
System of the United States.
"BOARD OF DIRECTORS" shall mean
managing body of a Borrower or a
"BORROWER" shall have the meanin
hereto.
"BORROWING" shall mean a group o
Lenders on a single date and as
effect.
"BORROWING REQUEST" shall mean a
y (other than a day which is a
y in the State of New York) on which banks
k City; provided, however, that, when used
Loan, the term "Business Day" shall also
re not open for dealings in dollar
market.
eemed to have occurred if (i) any
aning of Section 13(d) or 14(d) of the
acquire beneficial ownership of more than
Voting Shares of TXU unless such
oved prior to such acquisition date by a
ors of TXU or (ii) during any period of 12
\page
f the members of the board of directors of
viduals (A) who were members of board of
y of such period, (B) whose election or
tors of TXU was approved by individuals
constituting at the time of such election
y of the board of directors of TXU or (C)
the board of directors of TXU was approved
auses (i) and (ii) above constituting at
ination at least a majority of the board
ascribed to such term in Section
evenue Code of 1986, as the same may
2.03 in the form of Exhibit A.

"BUSINESS DAY" shall mean any da
Saturday, Sunday or legal holida
are open for business in New Yor
in connection with a Eurodollar
exclude any day on which banks a
deposits in the London interbank
"A CHANGE IN CONTROL" shall be d
person or "group" (within the me
Exchange Act, as amended) shall
30% of any outstanding class of
acquisition shall have been appr
majority of Disinterested Direct
3
consecutive months, a majority o
TXU cease to be composed of indi
directors of TXU on the first da
nomination to the board of direc
referred to in clause (i) above
or nomination at least a majorit
whose election or nomination to
by individuals referred to in cl
the time of such election or nom
of directors of TXU.
"CHARGES" shall have the meaning
8.13(a).
"CODE" shall mean the Internal R
be amended from time to time.
ic Utility Commission of the State
spect to each Lender, the commitment
dule 2.01 hereto to make Loans, as such
rminated or reduced from time to time
fied from time to time pursuant to Section
der shall automatically and permanently
f not terminated earlier pursuant to the
FOR FIXED CHARGES" for any
i) consolidated net income, calculated
dividends and preferred securities
ut before any extraordinary items and
-month period of any change in accounting
nancial Accounting Standards Board
r 31, 2001, less (ii) allowances for
ction to the extent that such allowances,
consolidated net income, plus (iii)
xes, to the extent that such provisions,
consolidated net income, plus (iv)
determined for such twelve-month period
Consolidated Subsidiaries on a
wever, that in computing Consolidated
rges for any twelve-month period the
ded to the extent otherwise included
he effect of any regulatory disallowances
n any proceeding before the Commission or
in an aggregate amount not to exceed
ook losses relating to the sale or
me costs of up to $100,000,000 incurred in
"COMMISSION" shall mean the Publ

of Texas.
"COMMITMENT" shall mean, with re
of such Lender set forth in Sche
Commitment may be permanently te
pursuant to Section 2.09 or modi
8.04. The Commitment of each Len
terminate on the Maturity Date i
terms hereof.
"CONSOLIDATED EARNINGS AVAILABLE
twelve-month period shall mean (
after deducting preferred stock
distributions of Subsidiaries, b
before the effect in such twelve
principles promulgated by the Fi
becoming effective after Decembe
equity funds used during constru
taken as a whole, increased such
provisions for Federal income ta
taken as a whole, decreased such
Consolidated Fixed Charges, all
with respect to Holdings and its
consolidated basis; provided, ho
Earnings Available for Fixed Cha
following amounts shall be exclu
pursuant to the foregoing: (A) t
resolving fuel or other issues i
the Railroad Commission of Texas
$100,000,000, (B) any non-cash b
write-down of assets, (C) one-ti
g of certain subsidiaries of TXU in
lectric industry restructuring legislation
ith the SEC) and (D) up to $100,000,000 of
h write-offs relating to the regulatory
with the Commission on December 31, 2001,
ubsidiaries (as described in TXU's filings
\page
any twelve-month period shall mean
(i) interest on mortgage bonds, (ii)
, (iii) other interest expense, including
the current portion of long-term debt, and
nd preferred securities distributions of
such twelve-month period with respect to
bsidiaries on a consolidated basis. For
ng-term debt shall not include the
on, Qualified Transition Bonds.
TY" of any Borrower shall mean the
total common stock equity plus (ii)
andatory redemption, each (in the case of
with respect to such Borrower and its
onsolidated basis, plus (iii)
es in an aggregate liquidation preference
00,000,000, if Energy is the Borrower, (B)
rrower, and (C) $1,750,000,000, if
person shall mean at any date any
connection with the restructurin

connection with the 1999 Texas e
(as described in TXU's filings w
costs incurred in connection wit
settlement plan, initially filed
of Holdings and certain of its S
with the SEC).
"CONSOLIDATED FIXED CHARGES" for

the sum (without duplication) of
interest on other long-term debt
interest on short-term debt and
(iv) preferred stock dividends a
Subsidiaries, all determined for
Holdings and its Consolidated Su
purposes of such calculation, lo
principal amount of, or interest
"CONSOLIDATED SHAREHOLDERS' EQUI
sum (without duplication) of (i)
preferred stock not subject to m
clauses (i) and (ii)) determined
Consolidated Subsidiaries on a c
Equity-Credit Preferred Securiti
amount not in excess of (A) $1,0
$750,000,000, if Oncor is the Bo
Holdings is the Borrower.
"CONSOLIDATED SUBSIDIARY" of any
Subsidiary or other entity the a
ccounts of which would be consolidated

h person's consolidated financial
ON" of any Borrower shall mean the
uity, (ii) preferred stock and preferred
(less amounts due currently) and (iv)
mmercial paper, notes payable to
erm debt due currently to the extent such
00,000, in the case of Holdings and
ach of Energy and Oncor, determined with
d its Consolidated Subsidiaries on a
of such calculation, long-term debt shall
of, or interest on, Qualified Transition
l members of a controlled group of
usinesses (whether or not incorporated)
ther with Holdings, are treated as a
4(b) or 414(c) of the Code.
respect to any Borrower, the ratings
signed by S&P and Moody's to the senior
ng term debt of such Borrower.
r condition, which upon notice,
titute an Event of Default.
ean any member of the board of
liated, directly or indirectly, with, or
of related persons (other than TXU, any
n, savings or other employee benefit plan
TXU and/or any Subsidiary of TXU)
with those of such person in suc

statements as of such date.
"CONSOLIDATED TOTAL CAPITALIZATI
sum of (i) total common stock eq
securities, (iii) long-term debt
short-term debt consisting of co
unaffiliated entities and long-t
short-term debt exceeds $2,000,0
$1,000,000,000, in the case of e
respect to each such Borrower an
consolidated basis. For purposes
not include the principal amount
Bonds.
"CONTROLLED GROUP" shall mean al
corporations and all trades or b
under common control which, toge
single employer under Section 41
"DEBT RATINGS" shall mean, with
(whether explicit or implied) as
unsecured non-credit enhanced lo
"DEFAULT" shall mean any event o
lapse of time or both would cons
"DISINTERESTED DIRECTOR" shall m
directors of TXU who is not affi
appointed by, a person or group
Subsidiary of TXU, or any pensio
for the benefit of employees of
\page
ip of more than 30% of any outstanding
ithin the meaning of Section 13(d) or
he applicable rules and regulations
member of the Board of Directors of TXU
was recommended for election by a
rectors in office prior to the Acquisition
ul money of the United States of
set forth in the preamble hereto.
IES" shall mean securities, however
rower or a Consolidated Subsidiary of a
ect to mandatory redemption or the
f which are not subject to mandatory
tual or mature no less than 30 years from
ndebtedness issued in connection with
s subordinate in right of payment to the
ebtedness of the issuer of such
the terms of which permit the deferral of
ibutions thereon to a date occurring after
Retirement Income Security Act of
from time to time.
trade or business (whether or not
f a group of (i) organizations described
Code and (ii) solely for purposes of the
) of the Code, organizations described in
acquiring the beneficial ownersh

class of Voting Shares of TXU (w
14(d) of the Exchange Act, and t
thereunder) and who either was a
prior to the Acquisition Date or
majority of the Disinterested Di
Date.
"DOLLARS" or "$" shall mean lawf
America.
"ENERGY" shall have the meaning
"EQUITY-CREDIT PREFERRED SECURIT
denominated, (i) issued by a Bor
Borrower, (ii) that are not subj
underlying securities, if any, o
redemption, (iii) that are perpe
the date of issuance, (iv) the i
which, including any guaranty, i
unsecured and unsubordinated ind
indebtedness or guaranty and (v)
the payment of interest or distr
the Maturity Date.
"ERISA" shall mean the Employee
1974, as the same may be amended
"ERISA AFFILIATE" shall mean any
incorporated) that is a member o
in Section 414(b) or (c) of the
Lien created under Section 412(n
e of which the applicable Borrower is a
"Reportable Event", (ii) the
lan that would require the provision of
(a)(29) of the Code or Section 307 of
ny liability under Title IV of ERISA with
y Plan or the withdrawal or partial
y of its ERISA Affiliates from any Plan or
eipt by any Borrower or any ERISA
otice relating to the intention to
o appoint a trustee to administer any
rower or any ERISA Affiliate of any notice
hdrawal Liability or a determination that
xpected to be, insolvent or in
ng of Title IV of ERISA, (vi) the
saction" with respect to which any
ies is liable and (vii) any other similar
to a Plan or Multiemployer Plan that could
wer other than a liability to pay premiums
n a Borrowing comprised of
\page
Loan bearing interest at a rate
IBO Rate in accordance with the provisions
e meaning assigned to such term in
Section 414(m) or (o) of the Cod

member.
"ERISA EVENT" shall mean (i) any
adoption of any amendment to a P
security pursuant to Section 401
ERISA, (iii) the incurrence of a
respect to the termination of an
withdrawal of any Borrower or an
Multiemployer Plan, (iv) the rec
Affiliate from the PBGC of any n
terminate any Plan or Plans or t
Plan, (v) the receipt by any Bor
concerning the imposition of Wit
a Multiemployer Plan is, or is e
reorganization, within the meani
occurrence of a "prohibited tran
Borrower or any of its subsidiar
event or condition with respect
result in liability of any Borro
or benefits when due.
"EURODOLLAR BORROWING" shall mea
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any

determined by reference to the L
of Article II.
"EVENT OF DEFAULT" shall have th
Article VI.
curities Exchange Act of 1934, as
aning assigned to such term in
mean, at any time, the percentage
column under the Applicable Rating Level
s of the Borrower that would produce the
i.e., the highest Facility Fee
acility Fee Percentage shall be effective
ble rating agency announces any change in
at would result in a different Facility
erms of this definition.
=================================
l 2
Level 3
Level 4
--------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
--------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
5%
0.20%
0.25%
=================================
hall have the meaning set forth in
e Rate".
ration shall mean the chief
ounting officer, treasurer, associate or
onsible officer designated by one of the
ration.
"EXCHANGE ACT" shall mean the Se

amended.
"FACILITY FEE" shall have the me
Section 2.04.
"FACILITY FEE PERCENTAGE" shall
per annum set forth below in the
corresponding to the Debt Rating
lowest Applicable Rating Level (
Percentage). Any change in the F
on the date on which any applica
a Debt Rating of any Borrower th
Fee Percentage pursuant to the t
================================
Applicable
Level 1
Leve
-------
-------
------
Rating
Level
-------------------------------Percentage Per Annum
-------------------------------Facility
0.125%
0.1
Fee
================================
"FEDERAL FUNDS EFFECTIVE RATE" s
the definition of "Alternate Bas
"FINANCIAL OFFICER" of any corpo
financial officer, principal acc
assistant treasurer, or any resp
foregoing persons, of such corpo
"FIRST MORTGAGE" shall mean (i)
the Oncor Mortgage, (ii) any

ed into by Oncor in order to refund or
the Oncor Mortgage, and (iii) if and for
nds are issued and outstanding under the
ure or instrument of Oncor pursuant to
es secured directly or indirectly by (A)
rtgage and/or (B) any property of Oncor.
ll mean the Five-Year Third Amended
and Revolving Credit Facility Agreement,
Holdings, the lenders listed in Schedule
Bank, as competitive advance facility
nd fronting bank for the letters of credit
estated, modified or supplemented from
pted accounting principles, applied
\page
ean any Federal, state, local or
ency, authority, instrumentality or
g set forth in the preamble hereto.
ean any date on which the following
all have delivered to the Agent (in
e Lenders) (i) a certificate of the
of Holdings certifying that (A) attached
ies of all corporate resolutions and all
equired by any Governmental Authority in
mortgage and deed of trust enter

replace, or in substitution for,
so long as any first mortgage bo
Oncor Mortgage, any other indent
which Oncor issues debt securiti
the Lien created by the Oncor Mo
"FIVE-YEAR CREDIT AGREEMENT" sha
and Restated Competitive Advance
dated as of July 31, 2002, among
2.01 thereto and JPMorgan Chase
agent and administrative agent a
issued thereunder, as amended, r
time to time.
"GAAP" shall mean generally acce
on a consistent basis.
"GOVERNMENTAL AUTHORITY" shall m

foreign court or governmental ag
regulatory body.
"HOLDINGS" shall have the meanin
"HOLDINGS APPROVAL DATE" shall m
shall have occurred: Holdings sh
sufficient copies for each of th
Secretary or Assistant Secretary
thereto are true and correct cop
orders, consents and approvals r
order to permit or authorize Hol
dings to borrow from banks, financial

rom time to time, by the issuance of
bank loans, notes, senior notes and
on a secured or unsecured basis, in an
outstanding exceeding the aggregate
e outstanding pursuant to resolutions of
n November 3, 2000 or any other Holdings
uch resolutions, orders, consents and
effect, sufficient for their purpose and,
ents and approvals, not subject to any
such Secretary or Assistant Secretary (as
eal or other proceeding seeking
f and (ii) an opinion of counsel to
atisfactory to the Agent, as to such
nd as to the enforceability of the
r on and after such date.
he Credit Agreement, dated as of
he lenders listed in Schedule 2.01 thereto
ded, modified or supplemented from time to
ll mean all indebtedness
h is created, assumed, incurred or
person or for which such person is
y agreement to purchase indebtedness of,
in, others or otherwise).
an, with respect to any Loan, the
applicable thereto and, in addition, the
oan or conversion of such Loan to a Loan
institutions and other lenders f

promissory notes, debentures or
(including, but not limited to,
commercial paper), in each case
aggregate principal amount to be
principal amount authorized to b
the Board of Directors adopted o
Approval Date and (B) that all s
approvals are in full force and
in the case of such orders, cons
pending or, to the knowledge of
the case may be), threatened app
reconsideration or review thereo
Holdings in form and substance s
orders, consents and approvals a
obligations of Holdings hereunde
"HOLDINGS FACILITY" shall mean t
July 15, 2002, among Holdings, t
and JPMorgan Chase Bank, as amen
time.
"INDEBTEDNESS" of any person sha
representing money borrowed whic
guaranteed in any manner by such
responsible or liable (whether b
or to supply funds to or invest
"INTEREST PAYMENT DATE" shall me
last day of the Interest Period
date of any prepayment of such L
of a different Type.
as to any Eurodollar Borrowing, the
such Borrowing and ending on the
r, if there is no numerically
ay) in the calendar month that is 1, 2 or
at, in the case of any Eurodollar
period ending on the Maturity Date, such
fourteenth day thereafter, as the
to any ABR Borrowing, the period
orrowing and ending on the earliest of (A)
ne 30, September 30 or December 31, (B)
ate such Borrowing is repaid or prepaid in
\page
Section 2.10; provided, however, that if
a day other than a Business Day, such
d to the next succeeding Business Day
r Loans only, such next succeeding
ext calendar month, in which case such
next preceding Business Day. Interest
the first day of an Interest Period to but
nterest Period.
given such term in the preamble
e Commitment Letter, dated August
he Agent and the Lead Arranger named
supplemented from time to time.
pect to any Eurodollar Borrowing for
"INTEREST PERIOD" shall mean (i)

period commencing on the date of
numerically corresponding day (o
corresponding day, on the last d
3 months thereafter; provided th
Borrowing made during the 30-day
period may end on the seventh or
Borrower may elect, and (ii) as
commencing on the date of such B
the next succeeding March 31, Ju
the Maturity Date, and (C) the d
accordance with Section 2.05 or

any Interest Period would end on
Interest Period shall be extende
unless, in the case of Eurodolla
Business Day would fall in the n
Interest Period shall end on the
shall accrue from and including
excluding the last day of such I
"LENDERS" shall have the meaning
hereto.
"LETTER AGREEMENT" shall mean th
19, 2002, among the Borrowers, t
therein, as amended, modified or
"LIBO RATE" shall mean, with res
any Interest Period, the rate ap
pearing on Page 3750 of the Telerate

substitute page of such service, or any
uch service, providing rate quotations
ovided on such page of such service, as
time to time for purposes of providing
licable to dollar deposits in the London
ly 11:00 a.m., London time, two Business
f such Interest Period as the rate for
comparable to such Interest Period. In the
lable at such time for any reason, then
such Eurodollar Borrowing for such
e at which dollar deposits of $5,000,000
such Interest Period are offered by the
ays Bank in immediately available funds in
pproximately 11:00 a.m. London time, two
ncement of such Interest Period.
to any asset, any mortgage, lien,
t or encumbrance of any kind in respect of
this Agreement, any person shall be deemed
et which it has acquired or holds subject
essor under any conditional sale
r title retention agreement relating to
n each of the liquidity facilities
nd any other similar credit or liquidity
rower after the date hereof.
an made pursuant to Section 2.03,
n or as an ABR Loan.
Regulations T, U and X of the Board
Service (or on any successor or

successor to or substitute for s
comparable to those currently pr
determined by Barclays Bank from
quotations of interest rates app
interbank market) at approximate
Days prior to the commencement o
dollar deposits with a maturity
event that such rate is not avai
the "LIBO RATE" with respect to
Interest Period shall be the rat
and for a maturity comparable to
principal London office of Barcl
the London interbank market at a
Business Days prior to the comme
"LIEN" shall mean, with respect
pledge, charge, security interes
such asset. For the purposes of
to own subject to a Lien any ass
to the interest of a vendor or l
agreement, capital lease or othe
such asset.
"LIQUIDITY FACILITIES" shall mea
listed on Schedule 3.15 hereto a
facility entered into by any Bor
"LOAN" shall mean a revolving lo
whether made as a Eurodollar Loa
"MARGIN REGULATIONS" shall mean
and all official rulings and
ereof.
aning given such term under
\page
mean, with respect to any Borrower,
he business, assets, operations or
ower and its Subsidiaries taken as a whole
to perform any of its obligations under
he rights of, or benefits available to,
.
arlier to occur of (i) November 30,
ation or reduction in whole of the
2.09 or Article VI.
aning ascribed thereto in Section
estors Service, Inc.
a multiemployer plan as defined in
hich any Borrower or any ERISA Affiliate
tion to make, contributions, or has within
ears made, or accrued an obligation to
et forth in the preamble hereto.
any date on which the following
have delivered to the Agent (in
as from time to time in effect,

interpretations thereunder or th
"MARGIN STOCK" shall have the me
Regulation U of the Board.
"MATERIAL ADVERSE CHANGE" shall

a materially adverse change in t
financial condition of such Borr
that makes such Borrower unable
this Agreement or that impairs t
the Lenders under this Agreement
"MATURITY DATE" shall mean the e
2002 and (ii) the date of termin
Commitments pursuant to Section
"MAXIMUM RATE" shall have the me
8.13(a).
"MOODY'S" shall mean Moody's Inv
"MULTIEMPLOYER PLAN" shall mean
Section 4001(a)(3) of ERISA to w
is making, or accruing an obliga
any of the preceding five plan y
make, contributions.
"ONCOR" shall have the meaning s
"ONCOR APPROVAL DATE" shall mean
shall have occurred: Oncor shall
sufficient copies for each of th
e Lenders) (i) a certificate of the

of Oncor certifying that (A) attached
ies of all corporate resolutions and all
equired by any Governmental Authority in
or to borrow from banks, financial
rom time to time, by the issuance of
bank loans, notes, senior notes and
on a secured or unsecured basis, in an
outstanding exceeding the aggregate
e outstanding pursuant to resolutions of
n March 4, 2002 or any other Oncor
uch resolutions, orders, consents and
effect, sufficient for their purpose and,
ents and approvals, not subject to any
such Secretary or Assistant Secretary (as
eal or other proceeding seeking
f and (ii) an opinion of counsel to Oncor
ry to the Agent, as to such orders,
the enforceability of the obligations of
h date.
Mortgage and Deed of Trust, dated as
ectric Company to Irving Trust Company
tee, as amended and supplemented from time
n (i) the Operating Agreement, dated
e Modification of Operating Agreement,
\page
Secretary or Assistant Secretary

thereto are true and correct cop
orders, consents and approvals r
order to permit or authorize Onc
institutions and other lenders f
promissory notes, debentures or
(including, but not limited to,
commercial paper), in each case
aggregate principal amount to be
principal amount authorized to b
the Board of Directors adopted o
Approval Date and (B) that all s
approvals are in full force and
in the case of such orders, cons
pending or, to the knowledge of
the case may be), threatened app
reconsideration or review thereo
in form and substance satisfacto
consents and approvals and as to
Oncor hereunder on and after suc
"ONCOR MORTGAGE" shall mean the
of December 1, 1983, from TXU El
(now The Bank of New York), Trus
to time and as assumed by Oncor.
"OPERATING AGREEMENTS" shall mea
April 28, 1978, as amended by th
10
Mining and Holdings (formerly TXU Electric
er & Light Company, Texas Electric Service
Company) and Energy, TXU Energy Retail
mpany LP (pursuant to the Assumption
01, by and among Holdings, Energy, TXU
Generation Company LP) (TXU Mining
may be amended from time to time, or (ii)
ecember 15, 1976, between TXU Fuel and
xas Electric Service Company and Texas
Operating Agreement), as it may be amended
no amendment of the TXU Mining Operating
ing Agreement shall increase the scope of
5.10(j).
nefit Guaranty Corporation or any
of its functions under ERISA.
er on any date of determination, the
such Lender's Commitment on such date by
e.
ean, as to any person at any date,
ents or governmental charges not
rkers' compensation awards and similar
and undetermined Liens or charges
s for taxes, assessments or governmental
validity of which is being contested at
faith against which an adequate reserve
ct to which levy and execution thereon
be stayed and which do not impair the use
dated April 20, 1979, among TXU

Company, successor to Dallas Pow
Company and Texas Power & Light
Company LP and TXU Generation Co
Agreement, dated December 31, 20
Energy Retail Company LP and TXU
Operating Agreement), and as it
the Operating Agreement, dated D
Dallas Power & Light Company, Te
Power & Light Company (TXU Fuel
from time to time; provided that
Agreement or the TXU Fuel Operat
any Lien permitted under Section
"PBGC" shall mean the Pension Be
entity succeeding to any or all
"PERCENTAGE" means, for any Lend
percentage obtained by dividing
the Total Commitment on such dat
"PERMITTED ENCUMBRANCES" shall m
any of the following:
(a) (i) Liens for taxes, assessm
then delinquent and Liens for wo
obligations not then delinquent
incidental to construction, Lien
charges then delinquent but the
the time by such person in good
has been established, with respe
have been stayed and continue to
of the property or the operation
of such person's business, (ii) Liens

n with or to secure the performance of
than for the payment of money), leases,
nds or appeal bonds, and mechanics' or
or similar encumbrances, the existence of
the property subject thereto for the
ed, and other Liens of like nature
ary course of business;
neither assumed nor guaranteed by
omarily pays interest, existing upon real
to real estate acquired by such person for
e, transportation line, distribution line,
in any municipality or public
ght, power, franchise, grant, license or
aw, to terminate such right, power,
mit or to purchase or recapture or to
the property of such person;
\page
in others to take or receive any
l, lignite or other minerals or timber
ed or produced by, or grown on, or
uch person and Liens upon the production
, coal, lignite or other minerals or
proceeds thereof, to secure the
of the expenses of exploration, drilling,
operty only out of such production or
incurred or created in connectio

bids, tenders, contracts (other
statutory obligations, surety bo
materialmen's Liens, assessments
which does not impair the use of
purposes for which it was acquir
incurred or created in the ordin
(b) Liens securing indebtedness,
such person nor on which it cust
estate or rights in or relating
any substation, transmission lin
right of way or similar purpose;
(c) rights reserved to or vested
authority by the terms of any ri
permit, or by any provision of l
franchise, grant, license or per
designate a purchaser of any of
11
(d) rights reserved to or vested
part of the power, gas, oil, coa
generated, developed, manufactur
acquired with, any property of s
from property of power, gas, oil
timber, and the by-products and
obligations to pay all or a part
mining or development of such pr
proceeds;
eptions or reservations in any
such person for the purpose of roads,
ssion lines, transportation lines,
il, gas, lignite, coal or other minerals
es, or for the joint or common use of real
ies and/or equipment, and defects,
in titles of any property and/or rights of
air the use of such property and/or rights
h such property and/or rights of way are
in any municipality or public
ulate any property of such person;
ffecting the property of such
ublic authority with respect to any
mit;
y controls, Liens, restrictions,
ns or reservations of any municipality or
ularly to space satellites or nuclear
ch person securing a judgment for an
olidated Shareholders' Equity of (x) such
ower, or (y) if such person is a
ower, such Borrower, in each case, so long
is being contested by appropriate
ith and execution thereon is stayed;
f deposits with or giving of any
state, municipal or other governmental
ureau, agency or instrumentality, domestic
(e) easements, restrictions, exc

property and/or rights of way of
pipe lines, substations, transmi
distribution lines, removal of o
or timber, and other like purpos
property, rights of way, facilit
irregularities and deficiencies
way, which do not materially imp
of way for the purposes for whic
held by such person;
(f) rights reserved to or vested
authority to use, control or reg
(g) any obligations or duties, a
person, to any municipality or p
franchise, grant, license or per
(h) as of any particular time an
regulations, easements, exceptio
public authority applying partic
fuel;
(i) any judgment Lien against su
amount not exceeding 25% of Cons
person, if such person is a Borr
Significant Subsidiary of a Borr
as the finality of such judgment
proceedings conducted in good fa
(j) any Lien arising by reason o
form of security to any federal,
department, commission, board, b
or foreign, for any purpose at a
ny time as required by law or governmental

transaction of any business or the
ense, or to enable such person to maintain
in any fund for liability on any
with workers' compensation, unemployment
ther social security or to share in the
for companies participating in such
res or movable property located on
n the ordinary course of business so long
ot in default.
\page
person, corporation, business trust,
any, limited liability company,
y agency or political subdivision thereof.
ension benefit plan described under
n a Multiemployer Plan) subject to the
that is maintained by any Borrower or any
any Borrower shall mean securities,
) issued by such Borrower or a
Borrower formed and operating solely for
d owning transition property created under
m is defined in the Texas Utilities Code)
suing such securities pursuant to such
s in such transition property to secure
in activities ancillary to those
regulation as a condition to the

exercise of any privilege or lic
self-insurance or to participate
insurance risks or in connection
insurance, old age pensions or o
privileges or benefits required
arrangements; or
(k) any landlords' Lien on fixtu
premises leased by such person i
as the rent secured thereby is n
12
"PERSON" shall mean any natural

joint venture, association, comp
partnership or government, or an
"PLAN" shall mean any employee p
Section 3(2) of ERISA (other tha
provisions of Title IV of ERISA
ERISA Affiliate.
"QUALIFIED TRANSITION BONDS" of
however denominated, that are (i
Consolidated Subsidiary of such
the purpose of (A) purchasing an
a "financing order" (as such ter
issued by the Commission, (B) is
order, (C) pledging its interest
such securities and (D) engaging
described in clauses (A), (B) an
d (C) above, (ii) secured by or otherwise

authorized pursuant to such order, and
wer or any of its Consolidated
uer of such securities).
g given such term in Section
y reportable event as defined in
or the regulations issued thereunder
or which the 30 day notice requirement has
lan (other than a Plan maintained by an
ed an ERISA Affiliate only pursuant to
ction 414).
t any time, Lenders having
ss of 50% of the Total Commitment or, (i)
suant to clause (ii) of Article VI, or
been terminated, Lenders holding Loans in
rincipal amount of Loans outstanding.
poration shall mean any executive
such corporation and any other officer or
ible for the administration of the
in respect of this Agreement.
's Ratings Services (a division of
.
and Exchange Commission.
mean a sale, lease, disposition or
any Subsidiary of a Borrower, during any
ituting, either individually or in the
payable from transition charges

(iii) non-recourse to such Borro
Subsidiaries (other than the iss
"REGISTER" shall have the meanin
8.04(d).
"REPORTABLE EVENT" shall mean an
Sections 4043(c)(1)-(8) of ERISA
(other than a reportable event f
been waived) with respect to a P
ERISA Affiliate that is consider
subsection (m) or (o) of Code Se
"REQUIRED LENDERS" shall mean, a
Commitments representing in exce
for purposes of acceleration pur
(ii) if the Total Commitment has
excess of 50% of the aggregate p
"RESPONSIBLE OFFICER" of any cor
officer or Financial Officer of
similar official thereof respons
obligations of such corporation
"S&P" shall mean Standard & Poor
The McGraw-Hill Companies, Inc.)
"SEC" shall mean the Securities
"SIGNIFICANT DISPOSITION" shall
other transfer by a Borrower, or
12-month period, of assets const
aggregate with all other assets
sold, leased, disposed or otherwise

any Subsidiary thereof during such period,
ary Borrower) or 10% (in the case of
\page
of such Borrower and its Subsidiaries
such sale, lease, disposition or other
diary of such Subsidiary Borrower.
ean, with respect to any Borrower at
Borrower that as of such time has total
otal assets of such Borrower and its
ded, that each of Energy and Oncor shall
nificant Subsidiary of Holdings.
any person as of a particular date,
able to pay its debts and other
ons and other commitments as they mature
. In computing the amount of contingent
ntended that such liabilities will be
light of all the facts and circumstances
s the amount that can reasonably be
matured liability.
spect to any person (the "parent"),
of which securities or other ownership
power to elect a majority of the board of
rming similar functions are at the time
such parent.
each of Energy and Oncor.
transferred by such Borrower or

25% (in the case of each Subsidi
13
Holdings) or more of the assets

taken as a whole, excluding any
transfer to a Wholly Owned Subsi
"SIGNIFICANT SUBSIDIARY" shall m
any time, any Subsidiary of such
assets in excess of 10% of the t
Consolidated Subsidiaries; provi
at all times be considered a Sig
"SOLVENT" means, with respect to
that on such date such person is
liabilities, contingent obligati
in the normal course of business
liabilities at any time, it is i
computed as the amount which, in
existing at such time, represent
expected to become an actual or
"SUBSIDIARY" shall mean, with re
any corporation or other entity
interests having ordinary voting
directors or other persons perfo
directly or indirectly owned by
"SUBSIDIARY BORROWER" shall mean
"SUBSTANTIAL" shall mean, for
any Borrower, an amount in excess

ts of such Borrower and its Consolidated
mean the 364-Day Revolving Credit
April 24, 2002, among the Borrowers, the
thereto, JPMorgan Chase Bank, as
ders thereunder, and Bank of America, N.A.
ting banks for the letters of credit
odified or supplemented from time to time.
t any time, the aggregate amount of
as in effect at such time. The initial
s $400,000,000.
Credit Agreement, dated as of
mong TXU, as borrower, the lenders party
ministrative agent thereunder.
xas corporation.
ompany, a Texas corporation.
\page
ng Company LP, a Texas limited
any Loan or Borrowing, shall refer
h interest on such Loan or on the Loans
ermined. For purposes hereof, "Rate" shall
ternate Base Rate.
o shares or other equity interests
of 10% of the consolidated asse

Subsidiaries taken as a whole.
"364-DAY CREDIT AGREEMENT" shall
Facility Agreement, dated as of
lenders listed in Schedule 2.01
administrative agent for the len
and JPMorgan Chase Bank, as fron
issued thereunder, as amended, m
"TOTAL COMMITMENT" shall mean, a
Commitments of all the Lenders,
amount of the Total Commitment i
"2001 AGREEMENT" shall mean the
December 21, 2001, as amended, a
thereto and Barclays Bank, as ad
"TXU" shall mean TXU Corp., a Te
"TXU FUEL" shall mean TXU Fuel C
14
"TXU MINING" shall mean TXU Mini

partnership, and its successors.
"TYPE", when used in respect of
to the Rate by reference to whic
comprising such Borrowing is det
include the LIBO Rate and the Al
"VOTING SHARES" shall mean, as t
of a particular corporation or o
ther type of person, outstanding shares of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock or other equity interests
of any class of such corporation or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person entitled to vote in the e
lection of directors or other comparable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql managers of such person, excludi
ng shares or other interests entitled so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to vote only upon the happening
of some contingency.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "WHOLLY OWNED SUBSIDIARY" of any
person shall mean any Consolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary of such person all th
e shares of common stock and other voting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital stock or other voting ow
nership interests having ordinary voting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power to vote in the election of
the board of directors or other governing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql body performing similar function
s (except directors' qualifying shares) of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are at the time directly o
r indirectly owned by such person.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "WITHDRAWAL LIABILITY" shall mea
n liability of a Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established under Section 4201 o
f ERISA as a result of a complete or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql partial withdrawal from a Multie
mployer Plan, as such terms are defined in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Part I of Subtitle E of Title IV
of ERISA.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1.02. TERMS GENERALLY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The definitions in Section 1.01
shall apply equally to both the singular
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and plural forms of the terms de
fined. Whenever the context may require, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pronoun shall include the corres
ponding masculine, feminine and neuter forms.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The words "include," "includes"
and "including" shall be deemed to be followed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the phrase "without limitatio
n." All references herein to Articles, Sections,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibits and Schedules shall be
deemed references to Articles and Sections of,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Exhibits and Schedules to, t
his Agreement unless the context shall otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require. Except as otherwise exp
ressly provided herein, all terms of an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting or financial nature s
hall be construed in accordance with GAAP, as in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect from time to time; provid
ed, however, that for purposes of determining
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with any covenant set
forth in Article V, such terms shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construed in accordance with GAA
P as in effect on the date hereof applied on a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis consistent with the applic
ation used in preparing the Borrowers' audited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements referred to

in Section 3.05.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE II
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE CREDITS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.01. COMMITMENTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the terms and conditi
ons and relying upon the representations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and warranties herein set forth,
each Lender agrees, severally and not jointly,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make Loans to any Borrower at
any time and from time to time until the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity Date up to the amount o
f such Lender's Commitment, subject, however, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the conditions that (i) at no ti
me shall the outstanding aggregate principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of all Loans exceed the T
otal Commitment, (ii) at no time shall the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding aggregate principal
amount of all Loans made by any Lender exceed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the amount of such Lender's Comm
itment, (iii) at all times, the outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount of al
l Loans made by each Lender hereunder shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal the product of (A) the per
centage of the Total Commitments that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender's Commitment represents a
nd (B) the outstanding aggregate principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of all Loans made hereund
er, (iv) with respect to Holdings, at no time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall the sum of (A) the outstan
ding aggregate principal amount of all Loans
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plus (B) the outstanding aggrega
te amount of the "Extensions of Credit" under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and as defined in each of the 36
4-Day Credit Agreement and the Five-Year Credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement plus (C) the outstandi
ng borrowings and other extensions of credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under other credit agreements or
loan agreements to which Holdings is a party,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in each case, for the account of
, or owing by, Holdings exceed $2,000,000,000 or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such different amount reflected
in the orders, resolutions and approvals
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referenced in (i)(A) of the defi
nition of "Holdings Approval Date" and (v) with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to Oncor, at no time sha
ll the sum of (A) the outstanding aggregate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of all Loans pl
us (B) the outstanding aggregate amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Extensions of Credit" under and
as defined in each of the 364-Day Credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement plus (C) the outstandi
ng borrowings and other extensions of credit

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under other credit agreements or
loan agreements to which Oncor is a party, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each case, for the account of, o
r owing by, Oncor exceed $1,000,000,000 or such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql different amount reflected in th
e orders, resolutions and approvals referenced
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in (i)(A) of the definition of "
Oncor Approval Date".
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Within the foregoing limits, the
Borrowers may borrow, pay or prepay Loans
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder, on and after the date
hereof and prior to the Maturity Date subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the terms, conditions and lim
itations set forth herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.02. LOANS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Each Loan shall be made as p
art of a Borrowing consisting of Loans
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made by the Lenders ratably in a
ccordance with their respective Commitments;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that the fail
ure of any Lender to make any Loan shall not in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql itself relieve any other Lender
of its obligation to lend hereunder (it being
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql understood, however, that no Len
der shall be responsible for the failure of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Lender to make any Loan re
quired to be made by such other Lender). The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loans comprising any Borrowing s
hall be in an aggregate principal amount that is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an integral multiple of $5,000,0
00 and not less than $25,000,000 (or an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount equal
to the remaining balance of the Total
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitment).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each Borrowing shall be comp
rised entirely of Eurodollar Loans or ABR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loans, as the applicable Borrowe
r may request pursuant to Section 2.03. Each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender may at its option make an
y Eurodollar Loan by causing any domestic or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foreign branch or Affiliate of s
uch Lender to make such Loan; provided that any
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise of such option shall no
t affect the obligation of any Borrower to repay
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Loan in accordance with the
terms of this Agreement. Borrowings of more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than one Type may be outstanding
at the same time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Subject to paragraph (d) bel

ow, each Lender shall make each Loan to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made by it hereunder on the prop
osed date thereof by wire transfer of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately available funds to t
he Agent in New York, New York, not later than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql noon, New York City time, and th
e Agent shall by 2:00 p.m., New York City time,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit the amounts so received t
o the account or accounts specified from time to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time in one or more notices deli
vered by the applicable Borrower to the Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or, if a Borrowing shall not occ
ur on such date because any condition precedent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein specified shall not have
been met, return the amounts so received to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective Lenders. Loans shall
be made by the Lenders pro rata in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Section 2.13. Unless the Ag
ent shall have received notice from a Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the date of any Borrowi
ng that such Lender will not make available to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent such Lender's portion
of such Borrowing, the Agent may assume that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender has made such portio
n available to the Agent on the date of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing in accordance with thi
s paragraph (c) and the Agent may, in reliance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon such assumption, make avail
able to the applicable Borrower on such date a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corresponding amount. If and to
the extent that such Lender shall not have made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such portion available to the Ag
ent, such Lender and the applicable Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (without waiving any claim again
st such Lender for such Lender's failure to make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such portion available) severall
y agree to repay to the Agent forthwith on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand such corresponding amount
together with interest thereon, for each day
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the date such amount is mad
e available to such Borrower until the date such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount is repaid to the Agent, a
t (i) in the case of such Borrower, the interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate applicable at the time to t
he Loans comprising such Borrowing and (ii) in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case of such Lender, the Fed
eral Funds Effective Rate. If such Lender shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql repay to the Agent such correspo
nding amount, such amount shall constitute such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender's Loan as part of such Bo
rrowing for purposes of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) A Borrower may refinance all
or any part of any Borrowing with a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing of the same or a diffe
rent Type, subject to the conditions and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitations set forth in this Ag
reement. Any Borrowing or part thereof so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refinanced shall be deemed to be
repaid or prepaid in accordance with Section

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.05 or 2.10, as applicable, wit
h the proceeds of a new Borrowing, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeds of the new Borrowing, t
o the extent they do not exceed the principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the Borrowing being re
financed, shall not be paid by the Lenders to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent or by the Agent to suc
h Borrower pursuant to paragraph (c) above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.03. BORROWING PROCEDUR
E.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In order to request a Borrowing,
a Borrower shall hand deliver or telecopy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Agent a duly completed Bo
rrowing Request in the form of Exhibit A (a) in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case of a Eurodollar Borrowi
ng, not later than 11:00 a.m., New York City
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, three Business Days before
such Borrowing, and (b) in the case of an ABR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing, not later than 11:00
a.m., New York City time, one Business Day
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before such Borrowing. Such noti
ce shall be irrevocable and shall in each case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specify (i) whether the Borrowin
g then being requested is to be a Eurodollar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing or an ABR Borrowing; (
ii) the date of such Borrowing (which shall be a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Day) and the amount the
reof; and (iii) if such Borrowing is to be a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eurodollar Borrowing, the Intere
st Period with respect thereto, which shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql end after the Maturity Date. If
no election as to the Type of Borrowing is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in any such notice, th
en the requested Borrowing shall be an ABR
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing. If no Interest Period
with respect to any Eurodollar Borrowing is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in any such notice, th
en the Borrower shall be deemed to have selected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Interest Period of one month'
s duration (subject to the limitations set forth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the definition of "Interest P
eriod"). If a Borrower shall not have given
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice in accordance with this S
ection 2.03 of its election to refinance a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing prior to the end of th
e Interest Period in effect for such Borrowing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then such Borrower shall (unless
such Borrowing is repaid at the end of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Period) be deemed to ha
ve given notice of an election to refinance such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing with an ABR Borrowing.
Notwithstanding any other provision of this

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement to the contrary, no Bo
rrowing shall be requested if the Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period with respect thereto woul
d end after the Maturity Date. The Agent shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly advise the Lenders of a
ny notice given pursuant to this Section 2.03
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and of each Lender's portion of
the requested Borrowing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.04. FEES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings agrees to pay to each L
ender, through the Agent, on each March
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31, June 30, September 30 and De
cember 31 (with the first payment being due on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 30, 2002) and on each
date on which the Commitment of such Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be terminated or reduced a
s provided herein, a facility fee (a "FACILITY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FEE"), at a rate per annum equal
to the Facility Fee Percentage from time to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time in effect on the amount of
the Commitment of such Lender (whether used or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unused), during the preceding qu
arter (or other period commencing on the date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement or ending on the
Maturity Date or any date on which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitment of such Lender shall
be terminated). All Facility Fees shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computed on the basis of the act
ual number of days elapsed in a year of 360
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days. The Facility Fee due to ea
ch Lender shall commence to accrue on the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement, and shall cea
se to accrue on the date of termination of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitment of such Lender as pro
vided herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.05. REPAYMENT OF LOANS
; EVIDENCE OF INDEBTEDNESS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The outstanding principal ba
lance of each Loan shall be due and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable on the last day of the I
nterest Period applicable thereto and on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maturity Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each Lender shall maintain i
n accordance with its usual practice an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account or accounts evidencing t
he indebtedness to such Lender resulting from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Loan made by such Lender fr
om time to time, including the amounts of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal and interest payable a
nd paid to such Lender from time to time under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Agent shall maintain acc
ounts in which it will record (i) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount and Type of each Loan mad

e hereunder and the Interest Period applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, (ii) the amount of any
principal or interest due and payable or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become due and payable from each
Borrower to each Lender hereunder and (iii) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of any sum received by th
e Agent hereunder from each Borrower and each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender's share thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The entries made in the acco
unts maintained pursuant to paragraphs (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (c) of this Section 2.05 sha
ll, to the extent permitted by applicable law,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be prima facie evidence of the e
xistence and amounts of the obligations therein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recorded; provided, however, tha
t the failure of any Lender or the Agent to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintain such accounts or any er
ror therein shall not in any manner affect the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of the Borrowers to
repay the Loans in accordance with their terms.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.06. INTEREST ON LOANS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Subject to the provisions of
Section 2.07, the Loans comprising each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eurodollar Borrowing shall bear
interest (computed on the basis of the actual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of days elapsed over a ye
ar of 360 days) at a rate per annum equal to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rate for the Interest Perio
d in effect for such Borrowing plus the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Applicable Margin from time to t
ime in effect.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Subject to the provisions of
Section 2.07, the Loans comprising each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ABR Borrowing shall bear interes
t (computed on the basis of the actual number of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days elapsed over a year of (i)
365 or 366 days, as the case may be, for periods
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during which the Alternate Base
Rate is determined by reference to the Prime
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rate and (ii) 360 days for other
periods) at a rate per annum equal to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Alternate Base Rate plus the App
licable Margin from time to time in effect.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Interest on each Loan shall
be payable on each Interest Payment Date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable to such Loan except a
s otherwise provided in this Agreement. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable LIBO Rate or Alternat
e Base Rate for each Interest Period or day

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within an Interest Period, as th
e case may be, shall be determined by Barclays
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bank, and such determination sha
ll be conclusive absent manifest error; provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that Barclays Bank shall, upon r
equest, provide to the applicable Borrower a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate setting forth in rea
sonable detail the basis for such determination.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.07. DEFAULT INTEREST.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If a Borrower shall default in t
he payment of the principal of or interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on any Loan or any other amount
becoming due hereunder, whether by scheduled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on demand from time to time from
the Agent pay interest, to the extent permitted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by law, on such defaulted amount
up to (but not including) the date of actual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment (after as well as before
judgment) at a rate per annum (computed as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Section 2.06(b)) equ
al to the Alternate Base Rate plus the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Applicable Margin for ABR Loans
plus 1%.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.08. ALTERNATE RATE OF
INTEREST.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event, and on each occasi
on, that on the day two Business Days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the commencement of any
Interest Period for a Eurodollar Borrowing the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent shall have determined (i)
that dollar deposits in the principal amounts of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Eurodollar Loans comprising
such Borrowing are not generally available in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the London interbank market or (
ii) that reasonable means do not exist for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ascertaining the LIBO Rate, the
Agent shall, as soon as practicable thereafter,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql give telecopy notice of such det
ermination to the Borrowers and the Lenders. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event of any such determinat
ion under clause (i) or (ii) above, until the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent shall have advised the Bor
rowers and the Lenders that the circumstances
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql giving rise to such notice no lo
nger exist, any request by a Borrower for a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eurodollar Borrowing pursuant to
Section 2.03 shall be deemed to be a request
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for an ABR Borrowing. In the eve
nt the Required Lenders notify the Agent that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rates at which dollar deposi
ts are being offered will not adequately and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fairly reflect the cost to such
Lenders of making or maintaining Eurodollar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loans during such Interest Perio

d, the Agent shall notify the applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower of such notice and unti
l the Required Lenders shall have advised the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent that the circumstances giv
ing rise to such notice no longer exist, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request by such Borrower for a E
urodollar Borrowing shall be deemed a request
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for an ABR Borrowing. Each deter
mination by the Agent hereunder shall be made in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good faith and shall be conclusi
ve absent manifest error; provided that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent, shall, upon request, prov
ide to the applicable Borrower a certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql setting forth in reasonable deta
il the basis for such determination.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.09. TERMINATION AND RE
DUCTION OF COMMITMENTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Commitments shall be aut
omatically terminated on the Maturity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) On the date of any prepaymen
t of Loans required under Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.10(b)(ii), the Commitments sha
ll be automatically and permanently reduced in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an amount equal to the amount of
the required prepayment, regardless of whether
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such amount of Loans is outstand
ing or prepaid.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Upon at least two Business D
ays' prior irrevocable written notice to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent, the Borrowers, acting
jointly, may at any time in whole permanently
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate, or from time to time
in part permanently reduce, the Total
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitment; provided, however, t
hat (i) each partial reduction of the Total
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitment shall be in an integr
al multiple of $10,000,000 and in a minimum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of $10,000,000
and (ii) no such termination or reduction shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made that would reduce the To
tal Commitment to an amount less than (A) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount of Lo
ans outstanding on the date of such termination
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or reduction (after giving effec
t to any prepayment made pursuant to Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.10) or (B) $50,000,000, unless
the result of such termination or reduction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in this clause (B) i
s to reduce the Total Commitment to $0. The

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent shall advise the Lenders o
f any notice given pursuant to this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.09(c) and of each Lender's por
tion of any such termination or reduction of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total Commitment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Each reduction in the Total
Commitment hereunder shall be made ratably
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql among the Lenders in accordance
with their respective Commitments. The Borrowers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall pay to the Agent for the a
ccount of the Lenders, on the date of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination or reduction of the
Total Commitment, the Facility Fees on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the Commitments so ter
minated or reduced accrued through the date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such termination or reduction.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.10. PREPAYMENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Voluntary Prepayment. Each B
orrower shall have the right at any time
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and from time to time to prepay
any Borrowing, in whole or in part, upon giving
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telecopy notice (or telephone no
tice promptly confirmed by telecopy) to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent: (i) before 11:00 a.m., Ne
w York City time, three Business Days prior to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepayment, in the case of Eurod
ollar Loans, and (ii) before 11:00 a.m., New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York City time, one Business Day
prior to prepayment, in the case of ABR Loans;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that each par
tial prepayment shall be in an amount which is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an integral multiple of $10,000,
000 and not less than $10,000,000.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Mandatory Prepayments.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) On the date of any terminati
on or reduction of the Commitments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 2.09, each B
orrower shall pay or prepay so much of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding Loans as shall be ne
cessary in order that the Loans outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not exceed the Total Commit
ment, after giving effect to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination or reduction.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) On the date of the issuance
by Energy or any of its Subsidiaries
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any long-term debt securities
, other than long-term advances from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates and pollution control

revenue bonds issued by municipal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorities and supported by pay
ment obligations of TXU or any of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries, Energy shall pay o
r prepay Borrowings in an amount equal to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at least 50% of the proceeds of
such issuance, net of customary and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable underwriting fees and
discounts, legal fees and similar costs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and expenses incurred in connect
ion with such issuance.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Each notice of prepayment sh
all specify the prepayment date and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of each Borrowi
ng (or portion thereof) to be prepaid, shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable and shall commit the
Borrower to prepay such Borrowing (or portion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof) by the amount stated th
erein on the date stated therein. All
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepayments under this Section 2
.10 shall be subject to Section 8.05 but
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise without premium or pen
alty. All prepayments under this Section 2.10
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be accompanied by accrued
interest on the principal amount being prepaid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the date of payment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.11. RESERVE REQUIREMEN
TS; CHANGE IN CIRCUMSTANCES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Notwithstanding any other pr
ovision herein, if after the date of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement any change in applicab
le law or regulation or in the interpretation or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration thereof by any Go
vernmental Authority charged with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation or administration
thereof (whether or not having the force of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law) shall change the basis of t
axation of payments to any Lender hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (except for changes in respect o
f taxes on the overall net income of such Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or its lending office imposed by
the jurisdiction in which such Lender's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal executive office or le
nding office is located), or shall result in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql imposition, modification or appl
icability of any reserve, special deposit or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar requirement against asse
ts of, deposits with or for the account of or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit extended by any Lender or
shall result in the imposition on any Lender or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the London interbank market of a
ny other condition affecting this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender's Commitment or any
Eurodollar Loan made by such Lender and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result of any of the foregoing s
hall be to increase the cost to such Lender of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql making or maintaining any Eurodo

llar Loan or to reduce the amount of any sum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received or receivable by such L
ender hereunder (whether of principal, interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or otherwise) by an amount deeme
d by such Lender to be material, then the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable Borrower or, if the f
oregoing circumstances do not relate to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular Borrowing, Holdings s
hall, upon receipt of the notice and certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided for in Section 2.11(c),
promptly pay to such Lender such additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount or amounts as will compen
sate such Lender for such additional costs
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurred or reduction suffered.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If any Lender shall have det
ermined that the adoption of any law,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rule, regulation or guideline ar
ising out of the July 1988 report of the Basle
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee on Banking Regulations
and Supervisory Practices entitled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "International Convergence of Ca
pital Measurement and Capital Standards," or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adoption after the date hereof o
f any other law, rule, regulation or guideline
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regarding capital adequacy, or a
ny change in any of the foregoing or in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation or administration
of any of the foregoing by any Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority, central bank or compa
rable agency charged with the interpretation or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration thereof, or compl
iance by any Lender (or any lending office of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender) or any Lender's hol
ding company with any request or directive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regarding capital adequacy (whet
her or not having the force of law) of any such
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority, central bank or compa
rable agency, has or would have the effect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reducing the rate of return on s
uch Lender's capital or on the capital of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender's holding company, if any
, as a consequence of this Agreement, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender's Commitment or the Loans
made by such Lender pursuant hereto to a level
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below that which such Lender or
such Lender's holding company could have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql achieved but for such adoption,
change or compliance (taking into consideration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender's policies and the p
olicies of such Lender's holding company with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to capital adequacy) by
an amount deemed by such Lender to be material,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then from time to time such addi

tional amount or amounts as will compensate such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender for any such reduction su
ffered will be paid to such Lender by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable Borrower or, if the f
oregoing circumstances do not relate to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular Borrower, by Holdings
. It is acknowledged that this Agreement is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql being entered into by the Lender
s on the understanding that the Lenders will not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be required to maintain capital
against their Commitments under currently
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable laws, regulations and
regulatory guidelines. In the event the Lenders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall otherwise determine that s
uch understanding is incorrect, it is agreed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the Lenders will be entitle
d to make claims under this paragraph (b) based
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon market requirements prevail
ing on the date hereof for commitments under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comparable credit facilities aga
inst which capital is required to be maintained.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) A certificate of each Lender
setting forth such amount or amounts as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be necessary to compensate
such Lender or its holding company as specified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in paragraph (a) or (b) above, a
s the case may be, and containing an explanation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in reasonable detail of the mann
er in which such amount or amounts shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been determined, shall be delive
red to the applicable Borrower or the Borrowers,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the case may be, and shall be
conclusive absent manifest error. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable Borrower shall pay ea
ch Lender the amount shown as due on any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate delivered by it with
in 10 days after its receipt of the same. Each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender shall give prompt notice
to the applicable Borrower of any event of which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it has knowledge, occurring afte
r the date hereof, that it has determined will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require compensation by such Bor
rower pursuant to this Section; provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that failure by such Le
nder to give such notice shall not constitute a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver of such Lender's right to
demand compensation hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Failure on the part of any L
ender to demand compensation for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increased costs or reduction in
amounts received or receivable or reduction in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql return on capital with respect t
o any period shall not constitute a waiver of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender's right to demand co
mpensation with respect to such period or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other period; provided, however,
that no Lender shall be entitled to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compensation under this Section

2.11 for any costs incurred or reductions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suffered with respect to any dat
e unless it shall have notified the applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower that it will demand com
pensation for such costs or reductions under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (c) above not more tha
n 90 days after the later of (i) such date and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the date on which it shall
have become aware of such costs or reductions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The protection of this Section s
hall be available to each Lender regardless of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any possible contention of the i
nvalidity or inapplicability of the law, rule,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulation, guideline or other c
hange or condition which shall have occurred or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been imposed.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Each Lender agrees that it w
ill designate a different lending office
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if such designation will avoid t
he need for, or reduce the amount of, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compensation and will not, in th
e reasonable judgment of such Lender, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disadvantageous to such Lender.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.12. CHANGE IN LEGALITY
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Notwithstanding any other pr
ovision herein, if any change in any law
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or regulation or in the interpre
tation thereof by any Governmental Authority
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charged with the administration
or interpretation thereof shall make it unlawful
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any Lender to make or mainta
in any Eurodollar Loan or to give effect to its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations as contemplated here
by with respect to any Eurodollar Loan, then, by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notice to the Borrowers
and to the Agent, such Lender may:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) declare that Eurodollar Loan
s will not thereafter be made by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender hereunder, whereupon any
request for a Eurodollar Borrowing shall,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as to such Lender only, be deeme
d a request for an ABR Loan unless such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declaration shall be subsequentl
y withdrawn (any Lender delivering such a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declaration hereby agreeing to w
ithdraw such declaration promptly upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determining that such event of i
llegality no longer exists); and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) require that all outstandin
g Eurodollar Loans made by it be

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql converted to ABR Loans, in which
event all such Eurodollar Loans shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql automatically converted to ABR L
oans as of the effective date of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice as provided in paragraph
(b) below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event any Lender shall ex
ercise its rights under (i) or (ii) above, all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments and prepayments of prin
cipal which would otherwise have been applied to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql repay the Eurodollar Loans that
would have been made by such Lender or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql converted Eurodollar Loans of su
ch Lender shall instead be applied to repay the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ABR Loans made by such Lender in
lieu of, or resulting from the conversion of,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Eurodollar Loans.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) For purposes of this Section
2.12, a notice by any Lender shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective as to each Eurodollar
Loan, if lawful, on the last day of the Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period currently applicable to s
uch Eurodollar Loan; in all other cases such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice shall be effective on the
date of receipt.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.13. PRO RATA TREATMENT
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as required under Section
s 2.12 and 2.17, each Loan, each payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or prepayment of principal of an
y Borrowing, each payment of interest on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loans, each payment of the Facil
ity Fees, each reduction of the Commitments and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each refinancing or conversion o
f any Borrowing with a Borrowing of any Type,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be allocated pro rata amon
g the Lenders in accordance with their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective Commitments (or, if s
uch Commitments shall have expired or been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminated, in accordance with t
he respective principal amounts of their Loans
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding). Each Lender agrees
that in computing such Lender's portion of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing to be made hereunder,
the Agent may, in its discretion, round each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender's percentage of such Borr
owing to the next higher or lower whole dollar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.14. SHARING OF SETOFFS
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Lender agrees that if it sh
all, through the exercise of a right of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql banker's lien, setoff or counter
claim, or pursuant to a secured claim under

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 506 of Title 11 of the U
nited States Bankruptcy Code or other security
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or interest arising from, or in
lieu of, such secured claim, received by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender under any applicable bank
ruptcy, insolvency or other similar law or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise, or by any other means
, obtain payment (voluntary or involuntary) in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of any Loans as a result
of which the unpaid principal portion of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loans shall be proportionately l
ess than the unpaid principal portion of the
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loans of any other Lender, it sh
all be deemed simultaneously to have purchased
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from such other Lender at face v
alue, and shall promptly pay to such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender the purchase price for, a
participation in the Loans of such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender, so that the aggregate un
paid principal amount of the Loans and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participations in the Loans held
by each Lender shall be in the same proportion
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the aggregate unpaid principa
l amount of all Loans then outstanding as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of its Loans pr
ior to such exercise of banker's lien, setoff or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterclaim or other event was
to the principal amount of all Loans outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to such exercise of banker
's lien, setoff or counterclaim or other event;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that, if any
such purchase or purchases or adjustments shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made pursuant to this Section
2.14 and the payment giving rise thereto shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter be recovered, such pu
rchase or purchases or adjustments shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rescinded to the extent of such
recovery and the purchase price or prices or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment restored without inte
rest. Each Borrower expressly consents to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing arrangements and agree
s that any Lender holding a participation in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loan deemed to have been so purc
hased may exercise any and all rights of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql banker's lien, setoff or counter
claim with respect to any and all moneys owing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by such Borrower to such Lender
by reason thereof as fully as if such Lender had
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made a Loan in the amount of suc
h participation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.15. PAYMENTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Each Borrower shall make eac

h payment (including principal of or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on any Loans or the Fac
ility Fee or other amounts) hereunder from an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account in the United States not
later than 12:00 noon, New York City time, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date when due in dollars to
the Agent at its offices at 222 Broadway, New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York, New York 10038, Attention:
Utility Group, 11th floor, telecopy:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 212-412-6709 (with a copy to Cli
ent Services Unit, 12th floor, telecopy:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 212-412-1098 or -1099, at the sa
me address). The applicable Borrower shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver notice of each such paym
ent to the Agent at 222 Broadway, New York, New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York 10038 Attention: Leonard Sa
rcona, telephone: 212-412-3275, telecopy:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 212-412-5306 (with a copy to the
Utility Group, 12th floor, telecopy:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 212-412-6709, at the same addres
s), in immediately available funds. Each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment shall be made without of
f-set, deduction or counterclaim, provided, that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the foregoing shall not constitu
te a relinquishment or waiver of such Borrower's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights to any independent claim
that such Borrower may have against the Agent or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Lender.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Whenever any payment (includ
ing principal of or interest on any Loan
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the Facility Fee or other amo
unts) hereunder shall become due, or otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would occur, on a day that is no
t a Business Day, such payment may be made on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the next succeeding Business Day
, and such extension of time shall in such case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be included in the computation o
f interest or the Facility Fee, if applicable.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.16. TAXES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any and all payments of prin
cipal and interest on any of the Loans, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Facility Fee or indemnity
or expense reimbursements by a Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder ("BORROWER PAYMENTS")
shall be made, in accordance with Section 2.15,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql free and clear of and without de
duction for any and all current or future United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States Federal, state and local
taxes, levies, imposts, deductions, charges or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withholdings, and all liabilitie
s with respect to such Borrower Payments, but
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only to the extent reasonably at
tributable to such Borrower Payments, excluding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) income taxes imposed on the
net income of the Agent or any Lender (or any
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferee or assignee thereof,
including a participation holder (any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entity a "TRANSFEREE")) and (ii)
franchise taxes imposed on the net income of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent or any Lender (or Tran
sferee), in each case by the jurisdiction under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the laws of which the Agent or s
uch Lender (or Transferee) is organized or doing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business through offices or bran
ches located therein, or any political
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subdivision thereof (all such no
nexcluded taxes, levies, imposts, deductions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges, withholdings and liabil
ities, collectively or individually, "TAXES").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any Borrower shall be require
d to deduct any Taxes from or in respect of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sum payable hereunder to any Len
der (or any Transferee) or the Agent, (i) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sum payable shall be increased b
y the amount (an "ADDITIONAL AMOUNT") necessary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so that after making all require
d deductions (including deductions applicable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional sums payable under th
is Section 2.16) such Lender (or Transferee) or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent shall receive an amoun
t equal to the sum it would have received had no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such deductions been made, (ii)
such Borrower shall make such deductions and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) such Borrower shall pay th
e full amount deducted to the relevant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authority in accord
ance with applicable law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In addition, each Borrower s
hall pay to the relevant United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authority in accord
ance with applicable law any current or future
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stamp or documentary taxes or an
y other excise or property taxes, charges or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar levies that arise from a
ny payment made hereunder or from the execution,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery or registration of, or
otherwise with respect to, this Agreement or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter Agreement ("OTHER TAXES")
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Each Borrower shall indemnif
y each Lender (or Transferee thereof) and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent for the full amount of
Taxes and Other Taxes with respect to Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments paid by such person, an
d any liability (including penalties, interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and expenses (including reasonab
le attorney's fees and expenses)) arising
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefrom or with respect theret
o, whether or not such Taxes or Other Taxes were

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql correctly or legally asserted by
the relevant United States Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority. A certificate setting
forth and containing an explanation in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable detail of the manner
in which such amount shall have been determined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the amount of such payment o
r liability prepared by a Lender or the Agent on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its behalf, absent manifest erro
r, shall be final, conclusive and binding for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all purposes. Such indemnificati
on shall be made within 30 days after the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lender (or Transferee) or th
e Agent, as the case may be, makes written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand therefor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) If a Lender (or Transferee)
or the Agent shall become aware that it is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to claim a refund from
a United States Governmental Authority in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of Taxes or Other Taxes
as to which it has been indemnified by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower, or with respect to whi
ch a Borrower has paid additional amounts,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Section 2.16, i
t shall promptly notify such Borrower of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql availability of such refund clai
m and shall, within 30 days after receipt of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request by such Borrower, make a
claim to such United States Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority for such refund at suc
h Borrower's expense. If a Lender (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transferee) or the Agent receive
s a refund (including pursuant to a claim for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refund made pursuant to the prec
eding sentence) in respect of any Taxes or Other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Taxes as to which it has been in
demnified by a Borrower or with respect to which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Borrower had paid additional a
mounts pursuant to this Section 2.16, it shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within 30 days from the date of
such receipt pay over such refund to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower (but only to the extent
of indemnity payments made, or additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts paid, by such Borrower u
nder this Section 2.16 with respect to the Taxes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Other Taxes giving rise to su
ch refund), net of all out-of-pocket expenses of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender (or Transferee) or t
he Agent and without interest (other than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest paid by the relevant Un
ited States Governmental Authority with respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such refund); provided, howev
er, that such Borrower, upon the request of such
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender (or Transferee) or the Ag
ent, agrees to repay the amount paid over to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower (plus penalties, i
nterest or other charges) to such Lender (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transferee) or the Agent in the
event such Lender (or Transferee) or the Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is required to repay such refund
to such United States Governmental Authority.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) As soon as practicable, but
in any event within 30 days, after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of any payment of Taxes or
Other Taxes by a Borrower to the relevant United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States Governmental Authority, s
uch Borrower will deliver to the Agent, at its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql address referred to in Section 8
.01, the original or a certified copy of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt issued by such United St
ates Governmental Authority evidencing payment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Without prejudice to the sur
vival of any other agreement contained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, the agreements and oblig
ations contained in this Section 2.16 shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql survive the payment in full of t
he principal of and interest on all Loans
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Each of the Agent and each L
ender (or Transferee) that is organized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the laws of a jurisdiction
other than the United States, any State thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the District of Columbia (a "
NON-U.S. LENDER" or "NON U.S. AGENT", as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable) shall deliver to the
Borrowers and the Agent two copies of either
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States Internal Revenue S
ervice Form W-8BEN or Form W-8ECI, properly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completed and duly executed by s
uch Non-U.S. Lender claiming complete exemption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from, or reduced rate of, United
States Federal withholding tax on payments by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Borrower under this Agreemen
t. Such forms shall be delivered by each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the case of a Transferee that
is a participation holder, on or before the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date such participation holder b
ecomes a Transferee hereunder) and on or before
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date, if any, such Non-U.S.
Lender changes its applicable lending office by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designating a different lending
office (a "NEW LENDING OFFICE"). In addition,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Non-U.S. Lender shall deliv
er such forms promptly upon the obsolescence or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invalidity of any form previousl
y delivered by such Non-U.S. Lender.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding any other provis

ion of this Section 2.16(g), a Non-U.S. Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be required to deliver
any form pursuant to this Section 2.16(g) that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Non-U.S. Lender is not lega
lly able to deliver.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) A Borrower shall not be requ
ired to indemnify any Non-U.S. Lender or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-U.S. Agent (including any Tr
ansferee), or to pay any additional amounts to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Non-U.S. Lender or Non-U.S.
Agent (including any Transferee), in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States Federal, state or
local withholding tax pursuant to paragraph (a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (c) above to the extent that
(i) the obligation to withhold amounts with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to United States Federal
, state or local withholding tax existed on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date such Non-U.S. Lender became
a party to this Agreement (or, in the case of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transferee that is a participati
on holder, on the date such participation holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql became a Transferee hereunder) o
r, with respect to payments to a New Lending
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Office, the date such Non-U.S. L
ender designated such New Lending Office with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a Loan; provided, how
ever, that this clause (i) shall not apply to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Transferee or New Lending Of
fice that becomes a Transferee or New Lending
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Office as a result of an assignm
ent, participation, transfer or designation made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the request of such Borrower;
and provided further, however, that this clause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) shall not apply to the exten
t the indemnity payment or additional amounts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Transferee or any Lender (or
Transferee) through a New Lending Office, would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be entitled to receive (without
regard to this clause (i)) do not exceed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnity payment or additional
amounts that the person making the assignment,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participation or transfer to suc
h Transferee or Lender (or Transferee) making
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the designation of such New Lend
ing Office, would have been entitled to receive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the absence of such assignmen
t, participation, transfer or designation or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the obligation to pay such
additional amounts or such indemnity payments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would not have arisen but for a
failure by such Non-U.S. Lender (including any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transferee) to comply with the p
rovisions of paragraphs (g) above and (i) below.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Any Lender (or Transferee) c
laiming any indemnity payment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional amounts payable pursu
ant to this Section 2.16 shall use reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql efforts (consistent with legal a
nd regulatory restrictions) to file any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate or document reasonab
ly requested in writing by a Borrower or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change the jurisdiction of its a
pplicable lending office if the making of such a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filing or change would avoid the
need for or reduce the amount of any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnity payment or additional
amounts that may thereafter accrue and would
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not, in the good faith determina
tion of such Lender (or Transferee), be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise disadvantageous to suc
h Lender (or Transferee).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) Nothing contained in this Se
ction 2.16 shall require any Lender (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transferee) or the Agent to make
available to such Borrower any of its tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql returns (or any other informatio
n) that it deems to be confidential or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proprietary.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) Notwithstanding anything her
ein to the contrary, the indemnification
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations under this Section s
hall, to the extent practicable, be allocated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql among the Borrowers based upon t
heir relative liability for the interest, fee or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other payments in respect of whi
ch such indemnification obligations arise.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.17. ASSIGNMENT OF COMM
ITMENTS UNDER CERTAIN CIRCUMSTANCES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that any Lender sha
ll have delivered a notice or certificate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 2.11 or 2.12
, or any Borrower shall be required to make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional payments to any Lende
r under Section 2.16, the Borrowers shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the right, at their own expense,
upon notice to such Lender and the Agent, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require such Lender to transfer
and assign without recourse (in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and subject to the restrictions
contained in Section 8.04) all such Lender's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests, rights and obligation
s contained hereunder to another financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql institution approved by the Agen
t and the Borrowers (which approval shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unreasonably withheld), which sh
all assume such obligations; provided that (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no such assignment shall conflic
t with any law, rule or regulation or order of

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Governmental Authority and (
ii) the assignee shall pay to the affected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender in immediately available
funds on the date of such assignment the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal of and interest accrue
d to the date of payment on the Loans made by it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder and all other amounts
accrued for its account or owed to it hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Borrowers shall pay the
processing and recordation fee due pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.04.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE III
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTATIONS AND WARRANTIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Borrower (or, if a represen
tation and warranty relates to only a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specific Borrower, such Borrower
) represents and warrants to each Lender as
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.01. ORGANIZATION; POWE
RS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such Borrower (i) is a corporati
on or, in the case of Energy, a limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability company, duly organize
d or (in the case of Energy) formed, validly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql existing and in good standing un
der the laws of the jurisdiction of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql organization or formation (as th
e case may be), (ii) has all requisite power and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority to own its property an
d assets and to carry on its business as now
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conducted and as proposed to be
conducted, (iii) is qualified to do business in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql every jurisdiction where such qu
alification is required, except where the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql failure so to qualify would not
result in a Material Adverse Change, and (iv)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has the corporate or (in the cas
e of Energy) limited liability company power and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority to execute, deliver an
d perform its obligations under this Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to request Borrowings and re
ceive Loans to the extent permitted under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.01.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.02. AUTHORIZATION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The execution, delivery and perf
ormance by such Borrower of this Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the making of Loans to the e
xtent permitted under Section 2.01 (i) have been

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duly authorized by all requisite
corporate or (in the case of Energy) limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability company action and (ii
) will not (A) violate (x) any provision of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law, statute, rule or regulation
(including, without limitation, the Margin
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulations) or of the certifica
te of incorporation or other constitutive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents (including, in the cas
e of Energy, its limited liability company or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operating agreement) or by-laws
of such Borrower or any of its Subsidiaries to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such Borrower is subject,
(y) any order of any Governmental Authority or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (z) any provision of any indentu
re, agreement or other instrument to which such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower or any of its Subsidiar
ies is a party or by which it or any of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property is or may be bound, (B)
be in conflict with, result in a breach of or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute (alone or with notice
or lapse of time or both) a default under any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such indenture, agreement or oth
er instrument or (C) result in the creation or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql imposition of any Lien upon any
property or assets of such Borrower.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.03. ENFORCEABILITY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement constitutes a leg
al, valid and binding obligation of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower enforceable in accordan
ce with its terms except to the extent that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement may be limited by ba
nkruptcy, insolvency or similar laws affecting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the enforcement of creditors' ri
ghts generally.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.04. GOVERNMENTAL APPRO
VALS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No action, consent or approval o
f, registration or filing with or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action by any Governmental Autho
rity is or will be required in connection with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the execution, delivery and perf
ormance by such Borrower of this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except those as have been duly o
btained and as are (i) in full force and effect,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) sufficient for their purpos
e and (iii) not subject to any pending or, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the knowledge of such Borrower,
threatened appeal or other proceeding seeking
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reconsideration or review thereo
f.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.05. FINANCIAL STATEMEN
TS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The consolidated balance she

et of Holdings and its Consolidated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries as of December 31,
2001 and the related consolidated statements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income, retained earnings and ca
sh flows for the fiscal year then ended,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reported on by Deloitte & Touche
LLP and set forth in Holdings' 2001 Annual
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K, copies of w
hich have been delivered to each of the Lenders,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present fairly, in all material
respects, the consolidated financial position of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings and its Consolidated Su
bsidiaries as of such date and their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated results of operatio
ns and cash flows for the period ending on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date in conformity with GAAP.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The combined balance sheet o
f Energy and the businesses that Energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comprises as of December 31, 200
1 and the related statements of combined income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and cash flow for the fiscal yea
r then ended, reported on by Deloitte & Touche
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LLP and set forth in Holdings' F
orm 8-K filed with the SEC on April 17, 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copies of which have been delive
red to each of the Lenders, present fairly, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all material respects, the combi
ned financial position of Energy and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql businesses that Energy comprises
as of such date and their combined results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and cash flows for th
e period ending on such date, in conformity with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GAAP.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The combined balance sheet o
f Oncor and the businesses that Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comprises as of December 31, 200
1 and the related statements of combined income
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and cash flow for the fiscal yea
r then ended, reported on by Deloitte & Touche
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LLP and set forth in Holdings' F
orm 8-K filed with the SEC on April 17, 2002,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copies of which have been delive
red to each of the Lenders, present fairly, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all material respects, the combi
ned financial position of Oncor and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql businesses that Oncor comprises
as of such date and their combined results of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and cash flows for th
e period ending on such date, in conformity with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GAAP.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Except as set forth in the f

inancial statements or other reports of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the type referred to in Section
5.03 hereof and which have been delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lenders on or prior to the date
hereof, since December 31, 2001, there has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no Material Adverse Change with
respect to such Borrower, other than as a result
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the matters excluded from the
computation of Consolidated Earnings Available
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Fixed Charges as set forth i
n the definition thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.06. LITIGATION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as set forth in the finan
cial statements or other reports of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql type referred to in Section 5.03
hereof, which have been delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lenders on or prior to the date
hereof, there is no action, suit or proceeding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pending against, or to the knowl
edge of such Borrower threatened against or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affecting, such Borrower or any
of its Subsidiaries before any court or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrator or any governmental b
ody, agency or official in which there is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable possibility of an adv
erse decision that could materially adversely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the ability of such Borro
wer to pay its obligations hereunder or which in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any manner draws into question t
he validity of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.07. FEDERAL RESERVE RE
GULATIONS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Neither such Borrower nor an
y of its Subsidiaries is engaged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principally, or as one of its im
portant activities, in the business of extending
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit for the purpose of purcha
sing or carrying Margin Stock.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) No part of the proceeds of a
ny Loan will be used by such Borrower,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether directly or indirectly,
and whether immediately, incidentally or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ultimately, to purchase or carry
Margin Stock or to refund indebtedness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originally incurred for such pur
pose, or for any other purpose which entails a
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql violation of, or which is incons
istent with, the provisions of the Margin
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Not more than 25% of the val
ue of the assets of any Borrower subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the restrictions of Sections
5.09 and 5.10 is represented by Margin Stock.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.08. INVESTMENT COMPANY
ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Neither such Borrower nor an
y of its Subsidiaries is an "investment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company" as defined in, or subje
ct to regulation under, the Investment Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act of 1940.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Such Borrower and each of it
s Subsidiaries is exempt from all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Public Utility
Holding Company Act of 1935 and rules and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations thereunder, except f
or Sections 9(a)(2) and 33 of such Act and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rules and regulations thereunder
, and the execution, delivery and performance by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Borrowers of this Agreement
and their respective obligations hereunder do
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not violate any provision of suc
h Act or any rule or regulation thereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.09. NO MATERIAL MISSTA
TEMENTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No report, financial statement o
r other written information furnished by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or on behalf of such Borrower to
the Agent or any Lender pursuant to or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with this Agreement c
ontains or will contain any material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql misstatement of fact or omits or
will omit to state any material fact necessary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make the statements therein,
in the light of the circumstances under which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql they were or will be made, not m
isleading.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.10. TAXES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such Borrower and its Subsidiari
es have filed or caused to be filed within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 days of the date on which due,
all material Federal, state and local tax
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql returns which to their knowledge
are required to be filed by them, and have paid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or caused to be paid all materia
l taxes shown to be due and payable on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql returns or on any assessments re
ceived by them, other than any taxes or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assessments the validity of whic
h is being contested in good faith by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate proceedings and with
respect to which appropriate accounting

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reserves have to the extent requ
ired by GAAP been set aside.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.11. EMPLOYEE BENEFIT P
LANS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to each Plan, such
Borrower and its ERISA Affiliates are in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance in all material respe
cts with the applicable provisions of ERISA and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Code and the final regulatio
ns and published interpretations thereunder. No
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERISA Event has occurred that al
one or together with any other ERISA Event has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulted or could reasonably be
expected to result in a Material Adverse Change.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither such Borrower nor any ER
ISA Affiliate has incurred any Withdrawal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liability that could result in a
Material Adverse Change. Neither such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nor any ERISA Affiliate has rece
ived any notification that any Multiemployer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan is in reorganization or has
been terminated within the meaning of Title IV
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of ERISA, which such reorganizat
ion or termination could result in a Material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Adverse Change, and no Multiempl
oyer Plan is reasonably expected to be in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reorganization or to be terminat
ed where such reorganization or termination has
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulted or can reasonably be ex
pected to result, through an increase in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contributions required to be mad
e to such Plan or otherwise, in a Material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Adverse Change.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.12. SIGNIFICANT SUBSID
IARIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each of such Borrower's Signific
ant Subsidiaries is a corporation, limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability company or other type
of person duly incorporated or formed (as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case may be), validly existing a
nd in good standing under the laws of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction of incorporation or
formation (as the case may be) and has all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporate, limited liability com
pany, partnership or other (as the case may be)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql powers necessary to carry on its
business substantially as now conducted. Such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower's Significant Subsidiar
ies have all material governmental licenses,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorizations, consents and app

rovals required to carry on the business of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Significant Subsidiaries substan
tially as now conducted.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.13. ENVIRONMENTAL MATT
ERS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as set forth in or contem
plated by the financial statements or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other reports of the type referr
ed to in Section 5.03 hereof and which have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to the Lenders on or p
rior to the date hereof, such Borrower and each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its Subsidiaries has complied
in all material respects with all Federal,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql state, local and other statutes,
ordinances, orders, judgments, rulings and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations relating to environm
ental pollution or to environmental or nuclear
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulation or control, except to
the extent that failure to so comply could not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably be expected to result
in a Material Adverse Change. Except as set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in or contemplated by such
financial statements or other reports, neither
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower nor any of its Sub
sidiaries has received notice of any failure so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to comply, except where such fai
lure could not reasonably be expected to result
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in a Material Adverse Change. Ex
cept as set forth in or contemplated by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements or other re
ports, the facilities of such Borrower or any of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries, as the case ma
y be, are not used to manage any hazardous
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wastes, hazardous substances, ha
zardous materials, toxic substances, toxic
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pollutants or substances similar
ly denominated, as those terms or similar terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are used in the Resource Conserv
ation and Recovery Act, the Comprehensive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Environmental Response Compensat
ion and Liability Act, the Hazardous Materials
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transportation Act, the Toxic Su
bstance Control Act, the Clean Air Act, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clean Water Act or any other app
licable law relating to environmental pollution,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any nuclear fuel or other rad
ioactive materials, in violation in any material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of any law or any regula
tions promulgated pursuant thereto, except to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent that such violations
could not reasonably be expected to result in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Material Adverse Change. Except
as set forth in or contemplated by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements or other re
ports, such Borrower is aware of no events,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions or circumstances invo
lving environmental pollution or contamination
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that could reasonably be expecte

d to result in a Material Adverse Change.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.14. SOLVENCY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such Borrower is Solvent.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.15. LIQUIDITY FACILITI
ES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Liquidity Facilities listed
on Schedule 3.15 constitute a complete and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accurate list of each Liquidity
Facility (other than this Agreement) to which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the Borrowers is a party
as of the date hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.16. HOLDINGS FACILITY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As of the date hereof, the "Tota
l Commitment" under the Holdings Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is $400,000,000, and there are n
o "Loans" outstanding under the Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IV
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The obligations of the Lenders t
o make Loans hereunder are subject to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfaction of the following co
nditions:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.01. INITIAL LOAN.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Commitment of each Lender to
make its initial Loan on or after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date hereof is subject to the co
nditions that on or prior to the date of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loan:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Agent shall have receive
d favorable written legal opinions of (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (A) Thelen Reid & Priest LLP, sp
ecial New York counsel to the Borrowers, and (B)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hunton & Williams, counsel to th
e Borrowers, and (ii) King & Spalding, special
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York counsel to the Agent, i
n each case dated the date hereof, addressed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent and the Lenders and in
form and substance satisfactory to the Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Agent shall have receive
d (i) a copy of the certificate of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporation or formation (as t

he case may be), including all amendments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, of each Borrower, certi
fied as of a recent date by the Secretary of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of the state of incorporat
ion or formation (as the case may be) of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower, and a certificate as t
o the good standing of each Borrower as of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recent date from such Secretary
of State, (ii) a certificate of the Secretary or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Assistant Secretary or analog
ous officer of each Borrower, dated the date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and certifying (A
) that attached thereto is a true and complete
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy of the bylaws or limited li
ability company agreement (in the case of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Energy) of such Borrower as in e
ffect on such date and at all times since a date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the date of the resolut
ions described in clause (B) below, (B) that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached thereto are true and co
mplete copies of resolutions duly adopted by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors of such Borro
wer authorizing the execution and delivery by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower of this Agreement,
the Loans to be made hereunder and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance by such Borrower of
all of its obligations hereunder, and that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resolutions have not been modifi
ed, rescinded or amended and are in full force
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and effect, (C) that the certifi
cate of incorporation or formation (as the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be) referred to in clause (i
) above has not been amended since the date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the last amendment thereto shown
on the certificate of good standing furnished
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to such clause (i) and
(D) as to the incumbency and specimen signature
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each officer executing this A
greement and any other document delivered in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection herewith on behalf of
such Borrower, (iii) a certificate of another
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer of such Borrower as to t
he incumbency and specimen signature of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary or Assistant Secretary
or analogous officer executing the certificate
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to (ii) above and (iv)
a certificate of a Responsible Officer of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower, dated the date of this
Agreement, stating that (A) no action, consent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or approval of, registration or
filing with or other action by any Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority is or will be required
in connection with the execution, delivery and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance by such Borrower of

this Agreement, except those as have been duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtained and as are (1) in full
force and effect, (2) sufficient for their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose and (3) not subject to a
ny pending or, to the knowledge of such person,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql threatened appeal or other proce
eding seeking reconsideration or review thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (B) the representations and
warranties set forth in Article III hereof are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql true and correct in all material
respects on and as of the date hereof, and (C)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no Event of Default or Default h
as occurred and is continuing on the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Agent shall have receive
d evidence satisfactory to the Agent that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the commitments of the lenders u
nder the 2001 Agreement have been terminated and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that all fees, accrued interest
and other amounts outstanding under the 2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement have been paid, repaid
or prepaid (as appropriate), or will be paid,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql repaid or prepaid (as appropriat
e) on or prior to the date of the first
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowing hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Agent shall have receive
d such other approvals, opinions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates, instruments and do
cuments as the Agent or any of the Lenders may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have reasonably requested, in fo
rm satisfactory to the Agent and the requesting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender (if applicable).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) The Lenders, the Agent and t
he Lead Arranger named in the Letter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement shall have received pa
yment of all fees and reimbursements of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses for which invoices have
been presented as and when due on or prior to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of the initial Loan pur
suant to the terms of this Agreement or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.02. CONDITIONS FOR ALL
LOANS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Commitment of each Lender to
make each Loan hereunder shall be subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the satisfaction of the follo
wing conditions precedent on the date of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loan:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Agent shall have receive
d from the relevant Borrower a Borrowing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Request requesting such Loan as
required by Section 2.03.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The representations and warr

anties of the applicable Borrower set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in Article III hereof (exc
ept in the case of a refinancing of a Borrowing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a new Borrowing that does n
ot increase the aggregate principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Loans of any Lender, the rep
resentations set forth in Sections 3.05(d),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.06, 3.11 and 3.13) shall be tr
ue and correct in all material respects on and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of the date of such Borrowing
with the same effect as though made on and as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such date, except to the exte
nt such representations and warranties expressly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relate to an earlier date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) At the time of and immediate
ly after such Borrowing, no Default or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event of Default affecting the r
elevant Borrower (and, with respect to any Loan
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Holdings, no Default or Event
of Default affecting Energy or Oncor of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql types described in clauses (b),
(c), (g), (h), (i), (j), (k) and (l) of Article
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VI "Events of Default") shall ha
ve occurred and be continuing at the time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrowing or would result f
rom the making of such Loan.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) In the case of any Loan to E
nergy, no Default or Event of Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have occurred and be conti
nuing with respect to the failure of Holdings to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with Section 5.11.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) The Borrowers shall have fir
st drawn in full all amounts available
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (excluding, however, amounts ava
ilable solely pursuant to the issuance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql letters of credit under the Liqu
idity Facilities and the drawing of amounts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder) to be drawn under th
e Liquidity Facilities other than the Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) On or prior to the date of s
uch Loan, Holdings shall have drawn
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts under the Holdings Facil
ity in a principal amount equal to or greater
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the principal amount of the
Loans to be made hereunder on such date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The Agent shall have receive
d a certificate of a Responsible Officer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the relevant Borrower certify

ing that the matters set forth in paragraphs (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through (f) of this Section 4.02
are true and correct as of such date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Loan shall be deemed to con
stitute a representation and warranty by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower for which such Loan was
made on the date of such Borrowing as to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters specified in subsections
(b), (c) and (d) of this Section 4.02.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE V
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COVENANTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Borrower agrees that, so lo
ng as any Lender has any Commitment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder or any amount payable
hereunder remains unpaid:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.01. EXISTENCE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It will, and will cause each of
its Significant Subsidiaries to, do or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause to be done all things nece
ssary to preserve and keep in full force and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect its existence and all rig
hts, licenses, permits, franchises and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorizations necessary or desi
rable in the normal conduct of its business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as otherwise permitted pu
rsuant to Section 5.09.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.02. COMPLIANCE WITH LA
WS; BUSINESS AND PROPERTIES.
its Subsidiaries to comply with all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable material laws, rules,
regulations and orders of any Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority, whether now in effect
or hereafter enacted, except where the validity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or applicability of such laws, r
ules, regulations or orders is being contested
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by appropriate proceedings in go
od faith and at all times maintain and preserve
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all property material to the con
duct of its business and keep such property in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good repair, working order and c
ondition and from time to time make, or cause to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made, all needful and proper
repairs, renewals, additions, improvements and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacements thereto necessary i
n order that the business carried on in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection therewith may be prop
erly conducted at all times.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.03. FINANCIAL STATEMEN
TS, REPORTS, ETC.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Borrower will furnish to th

e Agent and each Lender:
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) as soon as available and in
any event within 120 days after the end of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each fiscal year of such Borrowe
r, a consolidated balance sheet of such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and its Consolidated Subsidiarie
s as of the end of such fiscal year and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related consolidated statements
of income, retained earnings and cash flows for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such fiscal year, setting forth
in each case in comparative form the figures for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the previous fiscal year, all re
ported on in a manner reasonably acceptable to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the SEC by Deloitte & Touche LLP
or other independent public accountants of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nationally recognized standing;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) as soon as available and in
any event within 60 days (in the case of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings) or 75 days (in the cas
e of each Subsidiary Borrower) after the end of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of the first three quarters
of each fiscal year of such Borrower, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated balance sheet of su
ch Borrower and its Consolidated Subsidiaries as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the end of such quarter and t
he related consolidated statements of income for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such quarter, for the portion of
such Borrower's fiscal year ended at the end of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such quarter, and for the twelve
months ended at the end of such quarter, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the related consolidated stateme
nt of cash flows for the portion of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower's fiscal year ended at
the end of such quarter, setting forth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comparative figures for previous
dates and periods to the extent required in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-Q, all certified (subjec
t to normal year-end adjustments) as to fairness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of presentation, GAAP and consis
tency by a Financial Officer of such Borrower;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, that neither Subsidiar
y Borrower is required to provide such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements of income for the twe
lve months ended March 31, 2002, June 30, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or September 30, 2002 or any suc
h comparative figures for any fiscal period
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ending prior to March 31, 2002;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) simultaneously with any deli
very of each set of financial statements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in paragraphs (a) an
d (b) above, a certificate of a Financial

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer of such Borrower (i) set
ting forth in reasonable detail the calculations
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to establish whether su
ch Borrower was in compliance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of Sections 5.11 (i
n the case of Holdings only) and 5.12 on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such financial statement
s and (ii) stating whether any Default or Event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default exists on the date of
such certificate and, if any Default or Event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default then exists, setting
forth the details thereof and the action that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower is taking or propo
ses to take with respect thereto;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) simultaneously with the deli
very of each set of financial statements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in paragraph (a) abo
ve, a statement of the firm of independent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public accountants that reported
on such statements (i) stating whether anything
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has come to their attention to c
ause them to believe that any Default or Event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default existed on the date o
f such statements and (ii) confirming the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculations set forth in the Fi
nancial Officer's certificate delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql simultaneously therewith pursuan
t to paragraph (c) above;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) forthwith upon becoming awar
e of the occurrence of any Default or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event of Default, a certificate
of a Financial Officer of the affected Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql setting forth the details thereo
f and the action that such Borrower is taking or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposes to take with respect th
ereto;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) promptly upon the filing the
reof, copies of each final prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (other than a prospectus include
d in any registration statement on Form S-8 or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its equivalent or with respect t
o a dividend reinvestment plan) and all reports
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on Forms 10-K, 10-Q and 8-K and
similar reports which such Borrower shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed with the SEC, or any Gover
nmental Authority succeeding to any of or all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the functions of the SEC;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) if and when any member of th
e Controlled Group (i) gives or is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to give notice to the P

BGC of any Reportable Event with respect to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan that might constitute groun
ds for a termination of such Plan under Title IV
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of ERISA, or knows that the plan
administrator of any Plan has given or is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to give notice of any s
uch Reportable Event, a copy of the notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Reportable Event given or r
equired to be given to the PBGC, (ii) receives
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice from a proper representat
ive of a Multiemployer Plan of complete or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql partial Withdrawal Liability bei
ng imposed upon such member of the Controlled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group under Title IV of ERISA, a
copy of such notice or (iii) receives notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the PBGC under Title IV of
ERISA of an intent to terminate, or appoint a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trustee to administer, any Plan,
a copy of such notice; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) promptly, from time to time,
such additional information regarding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial position or business o
f such Borrower and its Subsidiaries as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent, at the request of any Len
der, may reasonably request.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As promptly as practicable after
delivering each set of financial statements as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required in paragraph (a) of thi
s Section, each Borrower shall make available a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy of the consolidating workpa
pers used by such Borrower in preparing such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated statements to each
Lender that shall have requested such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidating workpapers. Each L
ender that receives such consolidating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql workpapers shall hold them in co
nfidence as required by Section 8.15; provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that no Lender may disclose such
consolidating workpapers to any other person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to clause (iv) of Secti
on 8.15.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.04. INSURANCE.
its Subsidiaries to, maintain such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance or self insurance, to
such extent and against such risks, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fire and other risks insured aga
inst by extended coverage, as is customary with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql companies similarly situated and
in the same or similar businesses.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.05. TAXES, ETC.
its Subsidiaries to, pay and discharge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly when due all material t

axes, assessments and governmental charges
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql imposed upon it or upon its inco
me or profits or in respect of its property, as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql well as all other material liabi
lities, in each case before the same shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become delinquent or in default
and before penalties accrue thereon, unless and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent that the same are
being contested in good faith by appropriate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings and adequate reserve
s with respect thereto shall, to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by GAAP, have been set
aside.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.06. MAINTAINING RECORD
S; ACCESS TO PROPERTIES AND INSPECTIONS.
its Subsidiaries to, maintain financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql records in accordance with GAAP
and, upon reasonable notice and at reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql times, permit authorized represe
ntatives designated by any Lender to visit and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inspect its properties and to di
scuss its affairs, finances and condition with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its officers.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.07. ERISA.
its Subsidiaries that is a member of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Controlled Group to, comply in a
ll material respects with the applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of ERISA and the Code
except where any noncompliance, individually or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the aggregate, would not resu
lt in a Material Adverse Change.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.08. USE OF PROCEEDS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It will not, and will not cause
or permit any of its Subsidiaries to, use
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the proceeds of the Loans other
than for general corporate purposes, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the refinancing of short-term bo
rrowings used for working capital and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql general corporate purposes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.09. CONSOLIDATIONS, ME
RGERS, SALES AND ACQUISITIONS OF ASSETS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND INVESTMENTS IN SUBSIDIARIES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It (i) will not, and will not pe
rmit any of its Significant Subsidiaries

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to, consolidate or merge with or
into any person unless (A) in the case of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such transaction involving such
Borrower, the surviving person is such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or another person formed under t
he laws of a State of the United States of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql America and assumes or is respon
sible, by operation of law, for all the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of such Borrower her
eunder and (B) in the case of any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transaction involving any such S
ignificant Subsidiary, the survivor is such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower, such Significant Subsi
diary or a Wholly Owned Subsidiary of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower (or a person which as a
result of such transaction becomes a Wholly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Owned Subsidiary of such Borrowe
r), and (ii) will not, and will not permit any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its Significant Subsidiaries
(other than, in the case of Holdings, Energy or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor) to, make a Significant Di
sposition to any person other than such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or a Wholly Owned Subsidiary of
such Borrower (or a person which as a result of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such transaction becomes a Wholl
y Owned Subsidiary of such Borrower); provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that such Borrower will not in a
ny event permit any such consolidation, merger,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale, lease or transfer if any D
efault or Event of Default relating to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower shall have occurred and
be continuing at the time of or after giving
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect to such transaction. Notw
ithstanding the foregoing, (x) neither any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower nor any of its Subsidia
ries will engage to a Substantial extent in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql businesses other than those curr
ently conducted by them and other businesses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably related thereto, (y)
neither any Borrower nor any of its Subsidiaries
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will acquire any Subsidiary or m
ake any investment in any Subsidiary if, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql giving effect to such acquisitio
n or investment, as the case may be, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower would not be in complia
nce with the covenants set forth in Sections
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.11 (in the case of Holdings on
ly) and 5.12 and (z) nothing in this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall prohibit any sales of asse
ts permitted by Section 5.10(d).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.10. LIMITATIONS ON LIE
NS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither such Borrower nor any Si
gnificant Subsidiary thereof will create
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or assume or permit to exist any
Lien in respect of any property or assets of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any kind (real or personal, tang
ible or intangible) of such Borrower or any such

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Significant Subsidiary, or sell
any such property or assets subject to an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql understanding or agreement, cont
ingent or otherwise, to repurchase such property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or assets, or sell, or permit an
y Significant Subsidiary thereof to sell, any
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounts receivable; provided th
at the provisions of this Section shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prevent or restrict the creation
, assumption or existence of:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) any Lien in respect of any s
uch property or assets of any Significant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary of such Borrower to s
ecure indebtedness owing by it to such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any Wholly Owned Subsidiary o
f such Borrower; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Liens (including capital lea
ses) in respect of property acquired by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower or any Significant
Subsidiary thereof, to secure the purchase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price, or the cost of constructi
on and development, of such property (or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secure indebtedness incurred pri
or to, at the time of, or within 120 days after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the later of the acquisition of
such property and the commencement of operation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such property for the purpose
of financing the acquisition, or the cost of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction and development, of
such property), or Liens existing on any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property at the time of acquisit
ion of such property by such Borrower or such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Significant Subsidiary, whether
or not assumed, or any Lien in respect of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property of any person existing
at the time such person becomes a Subsidiary of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower, or agreements to
acquire any property or assets under conditional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale agreements or other title r
etention agreements, or capital leases in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of any other property; p
rovided that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (A) the aggregate principal amou
nt of Indebtedness secured by all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liens in respect of any such pro
perty shall not exceed the cost (as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by the board of direc
tors or analogous governing body of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower or such Significan
t Subsidiary, as the case may be) of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such property at the time of acq

uisition thereof (or (x) in the case
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of property covered by a capital
lease, the fair market value, as so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined, of such property at
the time of such transaction, or (y)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the case of a Lien in respect
of property existing at the time such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person becomes a Subsidiary of s
uch Borrower the fair market value, as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so determined of such property a
t such time), and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) at the time of the acquisiti
on of the property by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower or such Significant Sub
sidiary, or at the time such person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql becomes a Subsidiary of such Bor
rower, as the case may be, every such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien shall apply and attach only
to the property originally subject
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto and fixed improvements c
onstructed thereon; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) refundings or extensions of
any Lien permitted in the foregoing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (b) for amounts not ex
ceeding the principal amount of the Indebtedness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so refunded or extended or the f
air market value (as determined by the board of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors (or analogous governin
g body) of Holdings or such Significant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary, as the case may be)
of the property theretofore subject to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lien, whichever shall be lower,
in each case at the time of such refunding or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extension; provided that such Li
en shall apply only to the same property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql theretofore subject to the same
and fixed improvements constructed thereon; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) sales subject to understandi
ngs or agreements to repurchase; provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the aggregate sales price f
or all such sales (other than sales to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental instrumentality in
connection with such instrumentality's issuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of indebtedness, including witho
ut limitation industrial development bonds and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pollution control bonds, on beha
lf of such Borrower or any Significant
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary thereof) made in any
one calendar year shall not exceed $50,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the aggregate for the Borrowe
rs and their respective Significant

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) any production payment or si
milar interest that is dischargeable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql solely out of natural gas, coal,
lignite, oil or other mineral to be produced
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the property subject theret
o and to be sold or delivered by such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any Significant Subsidiary th
ereof; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) any Lien, including in conne
ction with sale-leaseback transactions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql created or assumed by such Borro
wer or any Significant Subsidiary thereof on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql natural gas, coal, lignite, oil
or other mineral properties or nuclear fuel
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owned or leased by such Borrower
or such Subsidiary, to secure loans to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower or such Subsidiary in a
n aggregate amount not to exceed $400,000,000 in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the aggregate for the Borrowers
and their respective Significant Subsidiaries;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided that neither such Borro
wer nor any Subsidiary of such Borrower shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assume or guarantee such financi
ngs; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) any Lien (whenever incurred)
on assets owned by such Borrower or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary thereof as of the dat
e hereof and any fuel, operating and maintenance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or similar contract related ther
eto securing Indebtedness of such Borrower or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary in an aggregate amoun
t not to exceed 10% of consolidated assets of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) leases (other than capital l
eases) now or hereafter existing and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql renewals and extensions thereof
under which such Borrower or any Significant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary thereof may acquire o
r dispose of any of its property, subject,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, to the terms of Section
5.09; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) any Lien created or to be cr
eated by the First Mortgage; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) any Lien on the rights of th
e TXU Mining or TXU Fuel existing under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their respective Operating Agree
ments; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) pledges or sales by any such
Borrower (other than Holdings) or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary of any Borrower of it
s accounts receivable including customers'
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installment paper; or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) the pledge of current assets
, in the ordinary course of business, to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secure current liabilities; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) Permitted Encumbrances;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (n) Liens on cash collateral to
secure reimbursement obligations for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql letters of credit issued for the
account of the Borrower or any of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (o) any Lien incurred in connect
ion with the issuance of Qualified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transition Bonds.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.11. FIXED CHARGE COVER
AGE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings will not, as of the end
of each quarter of each fiscal year of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings, permit Consolidated Ea
rnings Available for Fixed Charges for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql twelve months then ended to be l
ess than or equal to 200% of Consolidated Fixed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Charges for the twelve months th
en ended.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.12. EQUITY CAPITALIZAT
ION RATIO.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such Borrower will not, as of th
e end of each quarter of each fiscal year
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Borrower, permit the rat
io of its Consolidated Shareholders' Equity to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Consolidated Total Capitaliz
ation to be less than 35%, in the case of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Holdings and Oncor, and 40%,
in the case of Energy.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.13. RESTRICTIVE AGREEM
ENTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither Energy nor Oncor will en
ter into any agreement restricting the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ability of Energy or Oncor to ma
ke payments, directly or indirectly, to Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by way of dividends, advances, r
epayments of loans or advances, reimbursements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of management and other intercom
pany charges, expenses and accruals or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql returns on investments or any ot
her agreement or arrangement that restricts the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ability of such Subsidiary Borro
wer to make any payment, directly or indirectly,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Holdings other than pursuant
to the terms of preferred stock or Equity-Credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preferred Securities issued by E
nergy or Oncor or their respective Subsidiaries,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if the effect of such agreement
is to subject Energy or Oncor or any of their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective Subsidiaries to restr
ictions on such payments greater than those to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such Subsidiary is subject
on the date of this Agreement. All such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql existing restrictive agreements
are listed on Schedule 5.13 hereto.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.14. PREPAYMENTS AND RE
DUCTIONS OF COMMITMENTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings will not (i) make any v
oluntary or mandatory repayment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepayment of the principal amou
nt outstanding under the Holdings Facility or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) reduce the "Commitments" th
ereunder unless the Borrowers shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql simultaneously (A) prepay Loans
hereunder in a principal amount equal to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount repaid or prepa
id under the Holdings Facility or (B) reduce the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitments hereunder in an amou
nt equal to the amount of the reduction in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Commitments" under the Holdings
Facility, as the case may be.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VI
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EVENTS OF DEFAULT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In case of the happening of any
of the following events (each an "EVENT OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFAULT") with respect to a Borr
ower:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) any representation or warran
ty made or deemed made by such Borrower in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in connection with the execut
ion and delivery of this Agreement or the Loans
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder shall prove to have be
en false or misleading in any material respect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when so made, deemed made or fur
nished;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) default shall be made by suc
h Borrower in the payment of any principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any Loan when and as the same
shall become due and payable, whether at the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due date thereof or at a date fi
xed for prepayment thereof or by acceleration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof or otherwise;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) default shall be made by suc
h Borrower in the payment of any interest

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on any Loan or the Facility Fee
or any other amount (other than an amount
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in paragraph (b) abo
ve) due hereunder, when and as the same shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become due and payable, and such
default shall continue unremedied for a period
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of five days;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) default shall be made by suc
h Borrower in the due observance or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance of any covenant, con
dition or agreement contained in Section 5.01,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.11 or 5.12;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) default shall be made by suc
h Borrower (i) in the due observance or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance of any covenant, con
dition or agreement contained in Section 5.09
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and such default shall continue
unremedied for a period of 5 days or (ii) in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due observance or performance of
any covenant, condition or agreement contained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein (other than those specifi
ed in (b), (c), (d) or (e)(i) above) or in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter Agreement and such defaul
t shall continue unremedied for a period of 30
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days after notice thereof from t
he Agent at the request of any Lender to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) TXU shall no longer own, dir
ectly or indirectly, all the outstanding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equity interests in such Borrowe
r or any permitted successor to such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (which shall constitute an Event
of Default for Holdings and any other Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in which TXU has ceased to own 1
00% of such equity interests), or Holdings shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no longer own, directly or indir
ectly, 100% of the equity interests in Energy or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor (which shall constitute an
Event of Default for Holdings), or Energy shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no longer own, directly or indir
ectly, 100% of the equity interests in TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generation Holdings Company LLC,
TXU Energy Trading Company LP, or TXU Energy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retail Company LP (which shall c
onstitute an Event of Default for Energy);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that Holdings
and Energy may sell in an initial public
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offering up to 20% of the equity
interests in any Subsidiary comprising
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generating assets of Energy;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) such Borrower or any Subsidi
ary thereof shall (i) fail to pay any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal or interest, regardles
s of amount, due in respect of any Indebtedness
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in a principal amount in excess
of $50,000,000, when and as the same shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become due and payable, subject
to any applicable grace periods, or (ii) fail to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql observe or perform any other ter
m, covenant, condition or agreement contained in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any agreement or instrument evid
encing or governing any such Indebtedness if the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect of any failure referred t
o in this clause (ii) is to cause, or to permit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the holder or holders of such In
debtedness or a trustee on its or their behalf
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to cause, such Indebtedness to b
ecome accelerated or due prior to its stated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturity;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) an involuntary proceeding sh
all be commenced or an involuntary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql petition shall be filed in a cou
rt of competent jurisdiction seeking (i) relief
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in respect of such Borrower or a
ny Significant Subsidiary thereof, or of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantial part of the property
or assets of such Borrower or any Significant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary thereof, under Title
11 of the United States Bankruptcy Code, as now
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constituted or hereafter amended
, or any other Federal or state bankruptcy,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insolvency, receivership or simi
lar law, (ii) the appointment of a receiver,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trustee, custodian, sequestrator
, conservator or similar official for such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower or any Significant Subs
idiary thereof or for a substantial part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property or assets of such Borro
wer or any Significant Subsidiary thereof or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the winding up or liquidat
ion of such Borrower or any Significant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary thereof; and such pro
ceeding or petition shall continue undismissed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for 60 days or an order or decre
e approving or ordering any of the foregoing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be entered;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) such Borrower or any Signifi
cant Subsidiary thereof shall (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql voluntarily commence any proceed
ing or file any petition seeking relief under
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title 11 of the United States Ba
nkruptcy Code, as now constituted or hereafter

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, or any other Federal or
state bankruptcy, insolvency, receivership or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar law, (ii) consent to the
institution of, or fail to contest in a timely
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and appropriate manner, any proc
eeding or the filing of any petition described
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in (h) above, (iii) apply for or
consent to the appointment of a receiver,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trustee, custodian, sequestrator
, conservator or similar official for such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower or any Significant Subs
idiary thereof or for a substantial part of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property or assets of it or such
Significant Subsidiary, (iv) file an answer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql admitting the material allegatio
ns of a petition filed against it in any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding, (v) make a general a
ssignment for the benefit of creditors, (vi)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become unable, admit in writing
its inability or fail generally to pay its debts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as they become due or (vii) take
any action for the purpose of effecting any of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the foregoing;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) A Change in Control shall oc
cur (which shall constitute an Event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default for each Borrower);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) one or more judgments or ord
ers for the payment of money in an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate amount in excess of $5
0,000,000 shall be rendered against such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower or any Subsidiary there
of or any combination thereof and such judgment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or order shall remain undischarg
ed or unstayed for a period of 30 days, or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action shall be legally taken by
a judgment creditor to levy upon assets or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties of such Borrower or a
ny Subsidiary thereof to enforce any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql judgment or order;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) an ERISA Event or ERISA Even
ts shall have occurred that reasonably
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could be expected to result in a
Material Adverse Change with respect to such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then, and in every such event, a
nd at any time thereafter during the continuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such event, the Agent, at the
request of the Required Lenders, shall, by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice to the affected Borrower(
s), take one or all of the following actions, at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same or different times: (i)
terminate forthwith the right of such affected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower(s) to request and recei
ve Borrowings, (ii) to the extent such event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would permit the Lenders to with
hold Loans to any other Borrower pursuant to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.02(c) or (d), terminat
e forthwith the right of such other Borrower to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request and receive Borrowings a
nd (iii) declare the Loans of the affected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower(s) then outstanding to
be forthwith due and payable in whole or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part, whereupon the principal of
the Loans so declared to be due and payable,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together with accrued interest t
hereon and any unpaid accrued Facility Fee and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other liabilities of such Bo
rrower(s) accrued hereunder, shall become
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forthwith due and payable, witho
ut presentment, demand, protest or any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice of any kind, all of which
are hereby expressly waived, anything contained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein to the contrary notwithst
anding; provided that in the case of any event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in paragraph (h) or (i
) above affecting any Borrower, the right of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Borrower to request and rec
eive Borrowings shall automatically terminate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the principal of the Loans t
hen outstanding of such Borrower, together with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accrued interest thereon and any
unpaid accrued Facility Fee and all other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities of such Borrower acc
rued hereunder shall automatically become due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and payable, without presentment
, demand, protest or any other notice of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql kind, all of which are hereby ex
pressly waived by such Borrower, anything
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained herein to the contrary
notwithstanding.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VII
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE AGENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In order to expedite the transac
tions contemplated by this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Barclays Bank is hereby appointe
d to act as Agent on behalf of the Lenders. Each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender hereby irrevocably author
izes the Agent to take such actions on behalf of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender and to exercise such
powers as are specifically delegated to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent by the terms and provision
s hereof, together with such actions and powers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as are reasonably incidental the
reto. The Agent is hereby expressly authorized
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Lenders, without hereby l
imiting any implied authority, (a) to receive on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf of the Lenders all paymen
ts of principal of and interest on the Loans and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other amounts due to the Len
ders hereunder, and promptly to distribute to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Lender, its proper share of
each payment so received, (b) to give notice on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf of each Lender to the Bor
rowers of any Event of Default of which the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent has actual knowledge acqui
red in connection with its agency hereunder and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) to distribute to each Lender
copies of all notices, financial statements and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other materials delivered by the
Borrowers pursuant to this Agreement as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by the Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither the Agent nor any of its
directors, officers, employees or agents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be liable as such for any
action taken or omitted by any of them except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for its or his or her own gross
negligence or willful misconduct, or be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsible for any statement, w
arranty or representation herein or the contents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any document delivered in con
nection herewith, or be required to ascertain or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to make any inquiry concerning t
he performance or observance by the Borrowers of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the terms, conditions, co
venants or agreements contained in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. The Agent shall not b
e responsible to the Lenders for the due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execution, genuineness, validity
, enforceability or effectiveness of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or other instruments o
r agreements. The Agent may deem and treat the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender that makes any Loan as th
e holder of the indebtedness resulting therefrom
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for all purposes hereof until it
shall have received notice from such Lender,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given as provided herein, of the
transfer thereof. The Agent shall in all cases
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be fully protected in acting, or
refraining from acting, in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written instructions signed by t
he Required Lenders and, except as otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically provided herein, su
ch instructions and any action or inaction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant thereto shall be bindin
g on all the Lenders. The Agent shall, in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql absence of knowledge to the cont
rary, be entitled to rely on any instrument or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document believed by it in good
faith to be genuine and correct and to have been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql signed or sent by the proper per
son or persons. Neither the Agent nor any of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors, officers, employees o
r agents shall have any responsibility to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowers on account of the fail
ure of or delay in performance or breach by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender of any of its obligations
hereunder or to any Lender on account of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql failure of or delay in performan
ce or breach by any other Lender or any Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any of their respective oblig
ations hereunder or in connection herewith. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent may execute any and all du
ties hereunder by or through agents or employees
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall be entitled to rely up
on the advice of legal counsel selected by it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to all matters aris
ing hereunder and shall not be liable for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action taken or suffered in good
faith by it in accordance with the advice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such counsel.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Lenders hereby acknowledge t
hat the Agent shall not be under any duty
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to take any discretionary action
permitted to be taken by it pursuant to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Agreement unl
ess it shall be requested in writing to do so by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Required Lenders.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the appointment and a
cceptance of a successor Agent as provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below, the Agent may resign at a
ny time by notifying the Lenders and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowers. Upon any such resigna
tion, the Required Lenders shall have the right
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to appoint a successor Agent acc
eptable to the Borrowers. If no successor shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been so appointed by the Re
quired Lenders and shall have accepted such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointment within 30 days after
the Agent gives notice of its resignation, then
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent may, on behalf of the
Lenders, appoint a successor Agent having a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined capital and surplus of
at least $500,000,000 or an Affiliate of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such bank. Upon the acceptance o
f any appointment as Agent hereunder by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor bank, such successor s
hall succeed to and become vested with all the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights, powers, privileges and d
uties of the retiring Agent and the Agent shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be discharged from its duties an
d obligations hereunder. After the Agent's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resignation hereunder, the provi
sions of this Article and Section 8.05 shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue in effect for its benef
it in respect of any actions taken or omitted to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be taken by it while it was acti
ng as the Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to the Loans made b

y it hereunder, the Agent, in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individual capacity and not as A
gent, shall have the same rights and powers as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other Lender and may exercis
e the same as though it were not the Agent, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent and its Affiliates may
accept deposits from, lend money to and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally engage in any kind of
business with the Borrowers or any Subsidiary or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Affiliate thereof as if it
were not Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Lender agrees (i) to reimbu
rse the Agent, on demand, in the amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its pro rata share (based on its
Commitment hereunder or, if the Commitments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have been terminated, the
amount of its percentage of Loans) of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses incurred for the benefi
t of the Lenders, in its role as Agent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including counsel fees and compe
nsation of agents and employees paid for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services rendered on behalf of t
he Lenders, which shall not have been reimbursed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Borrowers and (ii) to ind
emnify and hold harmless the Agent and any of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its directors, officers, employe
es or agents, on demand, in the amount of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pro rata share, from and against
any and all liabilities, taxes, obligations,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql losses, damages, penalties, acti
ons, judgments, suits, costs, expenses or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disbursements of any kind or nat
ure whatsoever that may be imposed on, incurred
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by or asserted against it in any
way relating to or arising out of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or any action taken or
omitted by it under this Agreement to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent the same shall not have b
een reimbursed by the Borrowers; provided that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no Lender shall be liable to the
Agent for any portion of such liabilities,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations, losses, damages, pe
nalties, actions, judgments, suits, costs,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses or disbursements result
ing from the gross negligence or willful
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql misconduct of the Agent or any o
f its directors, officers, employees or agents.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Lender agrees that any allo
cation made in good faith by the Agent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses or other amounts referr
ed to in this paragraph shall be conclusive and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql binding for all purposes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Lender acknowledges that it
has, independently and without reliance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the Agent or any other Lend
er and based on such documents and information
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as it has deemed appropriate, ma
de its own credit analysis and decision to enter

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into this Agreement. Each Lender
also acknowledges that it will, independently
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and without reliance upon the Ag
ent or any other Lender and based on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents and information as it
shall from time to time deem appropriate,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue to make its own decisio
ns in taking or not taking action under or based
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon this Agreement or any relat
ed agreement or any document furnished hereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or thereunder.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Barclays Capital shall not, by v
irtue of its designation as "Lead
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Arranger" and "Sole Bookrunner"
have any duties, liabilities, obligations or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibilities under this Agre
ement other than, if applicable, as a Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VIII
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.01. NOTICES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notices and other communications
provided for herein shall be in writing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall be delivered by hand o
r overnight courier service, mailed or sent by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telecopy, as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) if to any Borrower, to such
Borrower c/o TXU Business Services
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, Energy Plaza, 1601 Brya
n Street, 33rd Floor, Dallas, TX 75201,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Treasurer (Telecopy N
o. 214-812-2488);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) if to the Agent, to Barclays
Bank PLC, 222 Broadway, New York, New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York, 10038, Attention: Utility
Group, 11th Floor (Telecopy No. 212-412-6709),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to Client Services U
nit, 12th Floor (Telecopy No.: 212-412-5306 or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1099), at the same address; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) if to a Lender, to it at its
address (or telecopy number) set forth in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Register or in the Assignmen
t and Acceptance pursuant to which such Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql became a party hereto.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All notices and other communicat
ions given to any party hereto in accordance

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the provisions of this Agre
ement shall be deemed to have been given on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of receipt if delivered by
hand or overnight courier service or sent by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telecopy to such party as provid
ed in this Section or in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql latest unrevoked direction from
such party given in accordance with this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.02. SURVIVAL OF AGREEM
ENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All covenants, agreements, repre
sentations and warranties made by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowers herein and in the cert
ificates or other instruments prepared or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered in connection with or
pursuant to this Agreement shall be considered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to have been relied upon by the
Lenders and shall survive the making by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lenders of the Loans regardless
of any investigation made by the Lenders or on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their behalf, and shall continue
in full force and effect as long as (i) there
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remains outstanding and unpaid p
rincipal or accrued interest on any Loan or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Fee or any other amount
payable under this Agreement or (ii) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitments have not been termin
ated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.03. BINDING EFFECT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement shall become effe
ctive when it shall have been executed by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Borrowers and the Agent and
when the Agent shall have received copies hereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (telecopied or otherwise) which,
when taken together, bear the signature of each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender, and thereafter shall be
binding upon and inure to the benefit of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties hereto and their respect
ive successors and assigns, except that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowers shall not have the rig
ht to assign any rights hereunder or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest herein without the prio
r consent of all the Lenders.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.04. SUCCESSORS AND ASS
IGNS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Whenever in this Agreement a
ny of the parties hereto is referred to,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such reference shall be deemed t
o include the successors and assigns of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party and all covenants, promise
s and agreements by or on behalf of any party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that are contained in this Agree
ment shall bind and inure to the benefit of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successors and assigns.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each Lender may assign to on
e or more assignees all or a portion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its interests, rights and obliga
tions under this Agreement (including all or a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of its Commitment and it
s Loans); provided, however, that (i) except in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case of an assignment to a L
ender or an Affiliate of such Lender, an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignment to a Federal Reserve
Bank or an assignment made at any time an Event
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default shall have occurred a
nd be continuing, the Borrowers and the Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must give their prior written co
nsent to such assignment (which consent shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be unreasonably withheld), (
ii) the amount of the Commitment of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigning Lender subject to each
such assignment (determined as of the date the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignment and Acceptance with r
espect to such assignment is delivered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent) shall not be less than $5
,000,000 or, if the amount of the Commitment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the assigning Lender is less tha
n $5,000,000, the aggregate amount of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender's Commitment, (iii) each
such assignment shall be of a constant, and not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a varying, percentage of all the
assigning Lender's rights and obligations under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and (iv) the part
ies to each such assignment shall execute and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver to the Agent an Assignme
nt and Acceptance, and a processing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recordation fee of $3,500. Upon
acceptance and recording pursuant to Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.04(e), from and after the effe
ctive date specified in each Assignment and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Acceptance, which effective date
shall be at least five Business Days after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execution thereof unless otherwi
se agreed by the Agent (the Borrowers to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given reasonable notice of any s
horter period), (A) the assignee thereunder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be a party hereto and, to
the extent of the interest assigned by such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignment and Acceptance, have
the rights and obligations of a Lender under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and (B) the assig
ning Lender thereunder shall, to the extent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interest assigned by such As
signment and Acceptance, be released from its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations under this Agreement
(and, in the case of an Assignment and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Acceptance covering all or the r
emaining portion of an assigning Lender's rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and obligations under this Agree
ment, such Lender shall cease to be a party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto (but shall continue to be
entitled to the benefits of Sections 2.11, 2.16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 8.05 afforded to such Lender
prior to its assignment as well as to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Fee accrued for its acc
ount hereunder and not yet paid)).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) By executing and delivering
an Assignment and Acceptance, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigning Lender thereunder and
the assignee thereunder shall be deemed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confirm to and agree with each o
ther and the other parties hereto as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) such assigning Lender warran
ts that it is the legal and beneficial owner of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interest being assigned ther
eby free and clear of any adverse claim, (ii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as set forth in (i) above
, such assigning Lender makes no representation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or warranty and assumes no respo
nsibility with respect to any statements,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warranties or representations ma
de in or in connection with this Agreement, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the execution, legality, validit
y, enforceability, genuineness, sufficiency or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value of this Agreement or any o
ther instrument or document furnished pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto or the financial conditio
n of the Borrowers or the performance or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql observance by the Borrowers of a
ny obligations under this Agreement or any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument or document furnished
pursuant hereto; (iii) such assignor and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignee represents and warrants
that it is legally authorized to enter into
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Assignment and Acceptance;
(iv) such assignee confirms that it has received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a copy of this Agreement, togeth
er with copies of the most recent financial
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements delivered pursuant to
Section 5.03 and such other documents and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information as it has deemed app
ropriate to make its own credit analysis and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decision to enter into such Assi
gnment and Acceptance; (v) such assignee will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independently and without relian
ce upon the Agent, such assigning Lender or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Lender and based on such d
ocuments and information as it shall deem
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate at the time, continu

e to make its own credit decisions in taking or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not taking action under this Agr
eement; (vi) such assignee appoints and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorizes the Agent to take suc
h action as agent on its behalf and to exercise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such powers under this Agreement
as are delegated to the Agent by the terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, together with such power
s as are reasonably incidental thereto and (vii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such assignee agrees that it wil
l perform in accordance with their terms all the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations which by the terms o
f this Agreement are required to be performed by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it as a Lender.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Agent shall maintain at
one of its offices in the City of New York
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a copy of each Assignment and Ac
ceptance delivered to it and a register for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recordation of the names and add
resses of the Lenders, and the Commitment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Lender pursuant to the term
s hereof from time to time (the "Register"). The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entries in the Register shall be
conclusive in the absence of manifest error and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Borrowers, the Agent and the
Lenders may treat each person whose name is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recorded in the Register pursuan
t to the terms hereof as a Lender hereunder for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all purposes of this Agreement.
The Register shall be available for inspection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by each party hereto, at any rea
sonable time and from time to time upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable prior notice.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon its receipt of a duly c
ompleted Assignment and Acceptance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by an assigning Lender
and an assignee, the processing and recordation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fee referred to in paragraph (b)
above and, if required, the written consent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Borrowers and the Agent to s
uch assignment, the Agent shall (i) accept such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignment and Acceptance and (i
i) record the information contained therein in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Register.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Each Lender may without the
consent of the Borrowers or the Agent sell
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participations to one or more ba
nks or other entities in all or a portion of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and/or obligations under
this Agreement (including all or a portion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Commitment and its Loans); p
rovided, however, that (i) such Lender's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations under this Agreement
shall remain unchanged, (ii) such Lender shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain solely responsible to the
other parties hereto for the performance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such obligations, (iii) each par

ticipating bank or other entity shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to the benefit of the c
ost protection provisions contained in Sections
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.11, 2.16 and 8.05 to the same
extent as if it were the selling Lender (and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited to the amount that could
have been claimed by the selling Lender had it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continued to hold the interest o
f such participating bank or other entity),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except that all claims made purs
uant to such Sections shall be made through such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selling Lender, and (iv) the Bor
rowers, the Agent and the other Lenders shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue to deal solely and dire
ctly with such selling Lender in connection with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender's rights and obligat
ions under this Agreement, and such Lender shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retain the sole right to enforce
the obligations of the Borrowers under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and to approve any ame
ndment, modification or waiver of any provision
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement (other than am
endments, modifications or waivers (x)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decreasing any fees payable here
under or the amount of principal of, or the rate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at which interest is payable on,
the Loans, (y) extending any scheduled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal payment date or date f
ixed for the payment of interest on the Loans or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (z) extending the Commitments).
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Any Lender or participant ma
y, in connection with any assignment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participation or proposed assign
ment or participation pursuant to this Section,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclose to the assignee or part
icipant or proposed assignee or participant any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information relating to the Borr
owers furnished to such Lender by or on behalf
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Borrowers; provided that,
prior to any such disclosure, each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignee or participant or propo
sed assignee or participant shall execute an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement whereby such assignee
or participant shall agree (subject to customary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceptions) to preserve the conf
identiality of any such information.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) The Borrowers shall not assi
gn or delegate any rights and duties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder without the prior writ
ten consent of all Lenders, and any attempted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignment or delegation (except
as a consequence of a transaction expressly

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted under Section 5.09) by
a Borrower without such consent shall be void.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Any Lender may at any time p
ledge all or any portion of its rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Agreement to a Federa
l Reserve Bank; provided that no such pledge
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall release any Lender from it
s obligations hereunder or substitute any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bank for such Lender as a party
hereto. In order to facilitate such an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignment to a Federal Reserve
Bank, each Borrower shall, at the request of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigning Lender, duly execute a
nd deliver to the assigning Lender a promissory
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql note or notes evidencing the Loa
ns made to such Borrower by the assigning Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.05. EXPENSES; INDEMNIT
Y.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Holdings agrees to pay all r
easonable out-of-pocket expenses
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including reasonable fees, char
ges and disbursements of counsel) incurred by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agent in connection with the
preparation, execution and delivery of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or in connection with
any amendments, modifications or waivers of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions hereof (but only if s
uch amendments, modifications or waivers are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested by a Borrower) (whethe
r or not the transactions hereby contemplated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are consummated), or incurred by
the Agent or any Lender in connection with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement of their rights in c
onnection with this Agreement (including in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of workouts and restruct
urings) or in connection with the Loans made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder, including the reasona
ble fees and disbursements of counsel for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent or, in the case of enforce
ment following an Event of Default and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lenders.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each Borrower agrees to inde
mnify each Lender against any loss,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculated in accordance with th
e next sentence, or reasonable expense that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender may sustain or incur as a
consequence of (i) any failure by such Borrower
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to borrow or to refinance, conve
rt or continue any Loan hereunder (including as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a result of such Borrower's fail
ure to fulfill any of the applicable conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in Article IV) after i
rrevocable notice of such borrowing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refinancing, conversion or conti
nuation has been given pursuant to Section 2.03,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) any payment, prepayment or
conversion of a Eurodollar Loan of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower, or assignment of a Eur
odollar Loan of such Borrower required by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other provision of this Agreemen
t or otherwise made or deemed made, on a date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than the last day of the I
nterest Period, if any, applicable thereto,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) any default by such Borrow
er in payment or prepayment of the principal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of any Loan or any part t
hereof or interest accrued thereon, as and when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due and payable (at the due date
thereof, whether by scheduled maturity,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration, irrevocable notice
of prepayment or otherwise) or (iv) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence of any Event of Defau
lt relating to such Borrower, including, in each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such case, any loss or reasonabl
e expense sustained or incurred or to be
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sustained or incurred by such Le
nder in liquidating or employing deposits from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third parties, or with respect t
o commitments made or obligations undertaken
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with third parties, to effect or
maintain any Loan hereunder or any part thereof
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a Eurodollar Loan. Such loss
shall include an amount equal to the excess, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, as reasonably determined by
such Lender, of (x) its cost of obtaining the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds for the Loan being paid, p
repaid, refinanced, converted or not borrowed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (assumed to be the LIBO Rate for
the period from the date of such payment,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepayment, refinancing or failu
re to borrow or refinance to the last day of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest Period for such Loan (o
r, in the case of a failure to borrow or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refinance, the Interest Period f
or such Loan that would have commenced on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such failure) over (y) t
he amount of interest (as reasonably determined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by such Lender) that would be re
alized by such Lender in reemploying the funds
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so paid, prepaid or not borrowed
or refinanced for such period or Interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period, as the case may be.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Holdings agrees to indemnify
the Agent, each Lender, each of their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates and the directors, of
ficers, employees and agents of the foregoing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (each such person being called a
n "INDEMNITEE") against, and to hold each

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indemnitee harmless from, any an
d all costs, losses, claims, damages,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities and related expenses
, including reasonable counsel fees and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses, incurred by or asserte
d against any Indemnitee arising out of (i) the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preparation, execution, delivery
, enforcement, performance and administration of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement, (ii) the use of
the proceeds of the Loans or (iii) any claim,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql litigation, investigation or pro
ceeding relating to any of the foregoing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not any Indemnitee is
a party thereto, including any of the foregoing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising from the negligence, whe
ther sole or concurrent, on the part of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indemnitee; provided that such i
ndemnity shall not, as to any Indemnitee, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available to the extent that suc
h losses, claims, damages, liabilities or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related expenses (A) are determi
ned by a final judgment of a court of competent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction to have resulted fr
om the gross negligence or willful misconduct of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Indemnitee or (B) result fr
om any litigation brought by such Indemnitee
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Borrowers or by any
Borrower against such Indemnitee, in which a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final, nonappealable judgment ha
s been rendered against such Indemnitee;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, further, that each Bor
rower agrees that it will not, nor will it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permit any Subsidiary to, withou
t the prior written consent of each Indemnitee,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settle, compromise or consent to
the entry of any judgment in any pending or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql threatened claim, action, suit o
r proceeding in respect of which indemnification
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could be sought under the indemn
ification provisions of this Section 8.05(c)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (whether or not any Indemnitee i
s an actual or potential party to such claim,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action, suit or proceeding), unl
ess such settlement, compromise or consent does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not include any statement as to
an admission of fault, culpability or failure to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql act by or on behalf of any Indem
nitee and does not involve any payment of money
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other value by any Indemnitee
or any injunctive relief or factual findings or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stipulations binding on any Inde
mnitee.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The provisions of this Secti
on shall remain operative and in full
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql force and effect regardless of t
he expiration of the term of this Agreement, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consummation of the transactions
contemplated hereby, the repayment of any of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Loans, the invalidity or une

nforceability of any term or provision of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or any investigation m
ade by or on behalf of the Agent or any Lender.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All amounts due under this Secti
on shall be payable on written demand therefor.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) A certificate of any Lender
or the Agent setting forth any amount or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts that such Lender or such
Agent is entitled to receive pursuant to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (b) of this Section an
d containing an explanation in reasonable detail
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the manner in which such amou
nt or amounts shall have been determined shall
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be delivered to the appropriate
Borrower and shall be conclusive absent manifest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql error.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.06. RIGHT OF SETOFF.
e occurred and be continuing, each Lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby authorized at any time
and from time to time, to the fullest extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted by law, to set off and
apply any and all deposits (general or special,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time or demand, provisional or f
inal) at any time held and other indebtedness at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time owing by such Lender to
or for the credit or the account of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable Borrower against any
of and all the obligations of such Borrower now
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or hereafter existing under this
Agreement held by such Lender irrespective of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether such Lender shall have m
ade any demand under this Agreement and although
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such obligations may be unmature
d. The rights of each Lender under this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are in addition to other rights
and remedies (including other rights of setoff)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that such Lender may have.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.07. APPLICABLE LAW.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS AGREEMENT SHALL BE CONSTRUE
D IN ACCORDANCE WITH AND GOVERNED BY THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LAWS OF THE STATE OF NEW YORK.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.08. WAIVERS; AMENDMENT
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) No failure or delay of the A
gent or any Lender in exercising any power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or right hereunder shall operate

as a waiver thereof, nor shall any single or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql partial exercise of any such rig
ht or power, or any abandonment or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discontinuance of steps to enfor
ce such a right or power, preclude any other or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further exercise thereof or the
exercise of any other right or power. The rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and remedies of the Agent and th
e Lenders hereunder are cumulative and are not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusive of any rights or remed
ies that they would otherwise have. No waiver of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any provision of this Agreement
or consent to any departure therefrom shall in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any event be effective unless th
e same shall be permitted by paragraph (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below, and then such waiver or c
onsent shall be effective only in the specific
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instance and for the purpose for
which given. No notice or demand on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrower or any Subsidiary in an
y case shall entitle such party to any other or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further notice or demand in simi
lar or other circumstances.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Neither this Agreement nor a
ny provision hereof may be waived, amended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or modified except pursuant to a
n agreement or agreements in writing entered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into by the Borrowers and the Re
quired Lenders; provided, however, that no such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement shall (i) decrease the
principal amount of, or extend the maturity of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any scheduled principal payme
nt date or date for the payment of any interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on, any Loan or date for the pay
ment of any Facility Fee, or waive or excuse any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such payment or any part thereof
, or decrease the rate of interest on any Loan,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the prior written consen
t of each Lender affected thereby, (ii) increase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Commitment of any Lender or
decrease the Facility Fee payable to any Lender
t of such Lender, (iii) amend, modify or waive
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of Section 2.13,
2.14 or 8.04(h), the provisions of this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the definition of the "Requir
ed Lenders", without the prior written consent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each Lender or (iv) amend, mo
dify or waive the provisions of Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.10(b)(ii), 4.02(e), 4.02(f), 4
.02(g) or 5.14 without the prior written consent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Required Lenders and Barc
lays Bank, if Barclays Bank or any Affiliate
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof is a Lender; provided fu
rther, however, that no such agreement shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amend, modify or otherwise affec
t the rights or duties of the Agent hereunder
t of the Agent. Each Lender shall be bound by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any waiver, amendment or modific
ation authorized by this Section and any consent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by any Lender or the Agent pursu
ant to this Section shall bind any assignee of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its rights and interests hereund
er.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.09. ENTIRE AGREEMENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement (including the sc
hedules and exhibits hereto) and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter Agreement represent the e
ntire contract among the parties relative to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject matter hereof and thereo
f. Any previous agreement, whether written or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql oral, among the parties with res
pect to the subject matter hereof, is superseded
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by this Agreement and the Letter
Agreement. There are no unwritten oral
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements between the parties.
Nothing in this Agreement, expressed or implied,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is intended to confer upon any p
arty other than the parties hereto any rights,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedies, obligations or liabili
ties under or by reason of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.10. SEVERABILITY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event any one or more of
the provisions contained in this Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql should be held invalid, illegal
or unenforceable in any respect, the validity,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legality and enforceability of t
he remaining provisions contained herein shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not in any way be affected or im
paired thereby. The parties shall endeavor in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good-faith negotiations to repla
ce the invalid, illegal or unenforceable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions with valid provisions
the economic effect of which comes as close as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possible to that of the invalid,
illegal or unenforceable provisions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.11. COUNTERPARTS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement may be executed i
n two or more counterparts, each of which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall constitute an original but
all of which when taken together shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute but one contract, and
shall become effective as provided in Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.03.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.12. HEADINGS.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article and Section headings and
the Table of Contents used herein are for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convenience of reference only, a
re not part of this Agreement and are not to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the construction of, or t
o be taken into consideration in interpreting,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.13. INTEREST RATE LIMI
TATION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Notwithstanding anything her
ein to the contrary, if at any time the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable interest rate, togeth
er with all fees and charges which are treated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as interest under applicable law
(collectively the "CHARGES"), as provided for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein or in any other document
executed in connection herewith, or otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contracted for, charged, receive
d, taken or reserved by any Lender, shall exceed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the maximum lawful rate (the "MA
XIMUM RATE") which may be contracted for,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charged, taken, received or rese
rved by such Lender in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable law, the rate of inte
rest payable on the Loans of such Lender,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together with all Charges payabl
e to such Lender, shall be limited to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maximum Rate.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If the amount of interest, t
ogether with all Charges, payable for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account of any Lender in respect
of any interest computation period is reduced
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to paragraph (a) of thi
s Section and the amount of interest, together
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with all Charges, payable for su
ch Lender's account in respect of any subsequent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest computation period, com
puted pursuant to Section 2.07, would be less
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the Maximum Rate, then the
amount of interest, together with all Charges,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable for such Lender's accoun
t in respect of such subsequent interest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computation period shall, to the
extent permitted by applicable law, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql automatically increased to such
Maximum Rate; provided that at no time shall the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate amount by which intere
st paid for the account of any Lender has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increased pursuant to this parag
raph (b) exceed the aggregate amount by which

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest, together with all Char
ges, paid for its account has theretofore been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduced pursuant to paragraph (a
) of this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.14. JURISDICTION; VENU
E.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Each Borrower hereby irrevoc
ably and unconditionally submits, for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql itself and its property, to the
nonexclusive jurisdiction of any New York State
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql court or Federal court of the Un
ited States of America sitting in New York City,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any appellate court from any
thereof, in any action or proceeding arising
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql out of or relating to this Agree
ment, or for recognition or enforcement of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql judgment, and each of the partie
s hereto hereby irrevocably and unconditionally
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees that all claims in respec
t of any such action or proceeding may be heard
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and determined in such New York
State or, to the extent permitted by law, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Federal court. Each of the
parties hereto agrees that a final judgment in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such action or proceeding sh
all be conclusive and may be enforced in other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdictions by suit on the jud
gment or in any other manner provided by law.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the foregoing and to
paragraph (b) below, nothing in this Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall affect any right that any
party hereto may otherwise have to bring any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action or proceeding relating to
this Agreement against any other party hereto
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the courts of any jurisdictio
n.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each Borrower hereby irrevoc
ably and unconditionally waives, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fullest extent it may legally an
d effectively do so, any objection which it may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql now or thereafter have to the la
ying of venue of any suit, action or proceeding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising out of or relating to th
is Agreement in any New York State court or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Federal court of the United Stat
es of America sitting in New York City. Each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the parties hereto hereby irrevo
cably waives, to the fullest extent permitted by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law, the defense of an inconveni
ent forum to the maintenance of such action or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding in any such court.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8.15. CONFIDENTIALITY.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Lender shall use its best e
fforts to hold in confidence all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information, memoranda, or extra

cts furnished to such Lender (directly or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through the Agent) by the Borrow
ers hereunder or in connection with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negotiation hereof; provided tha
t such Lender may disclose any such information,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memoranda or extracts (i) to its
Affiliates, accountants or counsel, (ii) to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory agency having authori
ty to examine such Lender, (iii) as required by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any legal or governmental proces
s or otherwise by law, (iv) except as provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the last sentence of Section
5.03, to any person to which such Lender sells
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or proposes to sell an assignmen
t or a participation in its Loans hereunder, if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such other person agrees for the
benefit of the Borrowers to comply with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Section and (
v) to the extent that such information,
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memoranda or extracts shall be p
ublicly available or shall have become known to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Lender independently of any
disclosure by any Borrower hereunder or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the negotiation
hereof. Notwithstanding the foregoing, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender may disclose the provisio
ns of this Agreement, the amounts, maturities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and interest rates of its Loans,
and the Facility Fee to which it is entitled,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any purchaser or potential pu
rchaser of such Lender's interest in any Loans.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [Signature pages follow]
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU US HOLDINGS COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /s/Kirk R. Oliver
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Kirk R. Oliver
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasurer and Assistant Secretar
y
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU ENERGY COMPANY LLC
y
y
\page
\page
d to below,
Floor
pany LLC] [Oncor Electric Delivery
By /s/Kirk R. Oliver
--------------------------Kirk R. Oliver
Treasurer and Assistant Secretar
By /s/Kirk R. Oliver
--------------------------Kirk R. Oliver
Treasurer and Assistant Secretar
BARCLAYS BANK PLC
By /s/Sydney G. Dennis
--------------------------Sydney G. Dennis
Director
EXHIBIT A
FORM OF BORROWING REQUEST
BORROWING REQUEST
[Date]
Barclays Bank PLC
as Agent for the lenders referre
222 Broadway
New York, New York 10038
Attention: Utility Group, 11th
Telecopy:
(212) 412-6709

The undersigned, [TXU Energy Com
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company] [TXU US Holdings Compan

y] (the "BORROWER"), refers to the Credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement dated as of August 30,
2002 (as it may hereafter be amended, modified,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extended or restated from time t
o time, the "AGREEMENT"), among the Borrower,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [TXU Energy Company LLC], [Oncor
Electric Delivery Company], [TXU US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company], the lenders listed in
Schedule 2.01 thereto (the "LENDERS") and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Barclays Bank PLC, as Agent for
the Lenders. Capitalized terms used herein and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not otherwise defined herein sha
ll have the meanings assigned to such terms in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agreement. The Borrower here
by gives you notice pursuant to Section 2.03 of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agreement that it requests a
Borrowing under the Agreement, and in that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection sets forth below the
terms on which such Borrowing is requested to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (A) Date of Borrowing (which i
s a Business Day)
-----\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) Principal amount of Borrow
ing(1)
-----\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (C) Interest rate basis(2)
-----\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (D) Interest Period and the la
st day thereof(3)
-----\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 Not less than $25,000,000 (and
in integral multiples of $5,000,000) or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater than the Total Commitmen
t then available.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 Eurodollar Loan or ABR Loan.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 Which shall be subject to the
definition of "INTEREST PERIOD" and end not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql later than the Maturity Date.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon acceptance of any or all of
the Loans made by the Lenders in response
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to this request, the Borrower sh
all be deemed to have represented and warranted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the applicable conditions t
o lending specified in Article IV of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement have been satisfied.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [TXU ENERGY COMPANY LLC]

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [ONCOR ELECTRIC DELIVERY COMPANY
]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [TXU US HOLDINGS COMPANY]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By _____________________________
____
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM OF ASSIGNMENT AND ACCEPTANC
E
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ASSIGNMENT AND ACCEPTANCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [Date]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reference is made to the Credit
Agreement, dated as of August 30, 2002 (as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, modified, extended or r
estated from time to time, the "Agreement"),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql among TXU Energy Company LLC, On
cor Electric Delivery Company, TXU US Holdings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company (collectively, the "BORR
OWERS"), the lenders listed in Schedule 2.01
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto (the "LENDERS") Barclays
Bank PLC, as Agent for the Lenders. Terms
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in the Agreement are use
d herein with the same meanings.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Assignor hereby sells and
assigns, without recourse, to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee, and the Assignee hereb
y purchases and assumes, without recourse, from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Assignor, effective as of th
e [Effective Date of Assignment set forth
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below], the interests set forth
on the reverse hereof (the "ASSIGNED INTEREST")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Assignor's rights and obl
igations under the Agreement, including, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, the interests set fo
rth on the reverse hereof in the Commitment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Assignor on the [Effective D
ate of Assignment] and the Loans owing to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignor that are outstanding on
the [Effective Date of Assignment], together
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with unpaid interest accrued on
the assigned Loans to the [Effective Date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignment] and the amount, if a

ny, set forth on the reverse hereof of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Fee accrued to the [Eff
ective Date of Assignment] for the account of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Assignor. Each of the Assign
or and the Assignee hereby makes and agrees to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be bound by all the representati
ons, warranties and agreements set forth in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.04 of the Agreement, a
copy of which has been received by each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. From and after the [Effec
tive Date of Assignment], (i) the Assignee shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be a party to and be bound by th
e provisions of the Agreement and, to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the interests assigned by thi
s Assignment and Acceptance, have the rights and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of a Lender thereund
er and (ii) the Assignor shall, to the extent of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interests assigned by this A
ssignment and Acceptance, relinquish its rights
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and be released from its obligat
ions under the Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. This Assignment and Acceptanc
e is being delivered to the Agent together
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with (i) if the Assignee is orga
nized under the laws of a jurisdiction outside
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the United States, the forms spe
cified in Section 2.16(g) of the Agreement, duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completed and executed by such A
ssignee and (ii) a processing and recordation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fee of $3,500.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. This Assignment and Accept
ance shall be governed by and construed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with the laws of t
he State of New York.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date of Assignment:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legal Name of Assignor:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legal Name of Assignee:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee's Address for Notices:
s
t
gent):
---------------- ----------------------------\par\pard\plain\fs16
to at least 8
d
decimals, as a percentage
___________
__________%
___________
__________%
___________
__________%
\page
the
Accepted:
eby
Name:
Effective Date of Assignment

(may not be fewer than 5 Busines
Days after the Date of Assignmen
unless otherwise agreed by the A
---------------------- --------
Percentage Assigned of
Facility/Commitment (set
Principal Amount
forth,
Facility
Assigne
of the Facility and the

aggregate Commitments of
all Lenders thereunder
Commitment Assigned:
$_
Loans:
$_
Facility Fee Assigned
$_
(if any):
B-2
The terms set forth and on

reverse
side hereof are her
agreed to:
TXU ENERGY COMPANY LLC
[ASSIGNOR], as
Assignor
By
-------------------------------By
Title:
-----------------------, as
Name:
By
\page
-------------------------------------\par\pard\plain\fs16
COMMITMENT
-------------------------------------\par\pard\plain\fs16
$400,000,000
-------------------------------------\par\pard\plain\fs16
$400,000,000
-------------------------------------\par\pard\plain\fs16
Title:
[ASSIGNEE], as
Assignee,
-------------------------------Name:
Title:
By
-----------------------, as
Name:
Title:
TXU US HOLDINGS COMPANY
By
-------------------------------Name:
Title:
BARCLAYS BANK PLC, as
Agent
By
-------------------------------Name:
Title:
B-3
SCHEDULE 2.01
COMMITMENTS
-------------------------------NAME OF LENDER
-------------------------------Barclays Bank PLC
-------------------------------TOTAL
============
--------------------------------
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE 3.15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIQUIDITY FACILITIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 364-Day Revolving Credit Agreeme
nt, dated as of April 24, 2002, among the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Borrowers, the lenders listed in
Schedule 2.01 thereto, JPMorgan Chase Bank and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bank of America, N.A.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Five-Year Third Amended and Rest
ated Competitive Advance and Revolving Credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Agreement, dated as of
July 31, 2002, among Holdings, the lenders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql listed in Schedule 2.01 thereto
and JPMorgan Chase Bank
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Credit Agreement, dated as of Ju
ly 15, 2002, among Holdings, the lenders listed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Schedule 2.01 thereto and JPM
organ Chase Bank
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE 5.13
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESTRICTIVE AGREEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor Mortgage
d\plain\cf1\f50\fs16\ql Exhibit 10(c)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GENERATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTERCONNECTION AGREEMENT
\page

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT STANDARD GENERATION INTERC
ONNECTION AGREEMENT........................3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit "A" Terms and Conditions
of the ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Standard Generation Interconnect
ion Agreement..............................5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 1. DEFINITIONS.........
.........................................5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 2. TERMINATION..........
.........................................7
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 3. REGULATORY FILINGS..
.........................................7
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 4. FACILITIES AND EQUIP
MENT.....................................8
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 5 OPERATION AND MAINTE
NANCE...................................11
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 6. DATA REQUIREMENTS...
........................................12
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 7. INSURANCE...........
........................................14
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 8. MISCELLANEOUS.......
........................................16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit "B" System Protection Re
quirements................................24
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit "C" Notice and EFT Infor
mation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generation Interconnection Agree
ment....................................26
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit "D" Supplemental Terms a
nd Conditions.............................28
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit "E" Facility Schedule...
..........................................35
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GENERATION INTERCONNECTION AGREE
MENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Generation Interconnection
Agreement is made and entered into this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14th day of December, 2001, betw
een TXU Electric Delivery Company, a Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation ("Transmission Servi
ce Provider") and TXU Generation Company LP, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas limited partnership ("Gene
rator"), hereinafter individually referred to as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Party," and collectively referr
ed to as "Parties." In consideration of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mutual covenants and agreements
herein contained, the Parties hereto agree as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmission Service Provider re
presents that it is a public utility that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owns and operates facilities for
the transmission and distribution of

s that it will own and operate the Plant.
ions of this Agreement, Transmission Service
connection between Generator's Plant and
System.
he Plant and the Parties' interconnection
Facility Schedule attached hereto ("Facility
ctive on January 1, 2002 and shall
t until terminated in accordance with Exhibit
o the following, all of which are
of the Generation Interconnection Agreement"
nless expressly stated herein, where the ERCOT
t with this Agreement, the ERCOT
the PUCT Rules are in conflict with this
prevail);
uirements" attached hereto as Exhibit "B";
formation of the Generation Interconnection
hibit "C";
and Conditions Specific to TSP-Owned Support
pport Facilities, TSP Support Services,
attached hereto as Exhibit "D"; and
ls" attached hereto as a Facility Schedule.
\page
have executed this Agreement in duplicate
electricity. Generator represent

Pursuant to the terms and condit
Provider shall maintain an inter
Transmission Service Provider's
This Agreement applies only to t
facilities as identified in the
Schedule").
This Agreement shall become effe
continue in full force and effec
"A."
This Agreement will be subject t
incorporated herein:
A.
The "Terms and Conditions
attached hereto as Exhibit "A";

B.
The ERCOT Requirements (u
Requirements
are in
conflic
Requirements shall prevail);

C.
The PUCT Rules (where
Agreement, the PUCT Rules shall
D.
The "System Protection Req
E.
The "Notice and EFT In
Agreement" attached hereto as Ex

F.
The "Supplemental Terms
Facilities, Generator-Owned Su
and Areas of Common Switchyard"
G.
The "Interconnection Detai
IN WITNESS WHEREOF, the Parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originals, each of which shall c

onstitute and be an original effective Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Thomas L. Baker
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------\par\pard\plain\fs16
Thomas L. Baker
President
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date:
12/14/01
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU GENERATION COMPANY LP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: TXU Generation Management
Company LLC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Its General Partner
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:
/s/ W.M. Taylor
W. M. Taylor
President
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date:
12/14/01
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT "A"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TERMS AND CONDITIONS OF THE
MENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 1. DEFINITIONS
meanings as set forth below, except as
ment:
mean a switchyard in which both GIF and TIF
Generator-owned geographical area, which may or
fence.
ctric Reliability Council of Texas, Inc.
the ERCOT Operating Guides, ERCOT Generation
ll as any other documents adopted by ERCOT
and operation of generators and transmission
time to time, and any successors thereto. Any
uments imposed upon generation entities or
me the responsibility of the Generator, and any
sion providers or transmission facilities shall
TSP.
acilities" shall mean those Generator-owned
ant and/or GIF which provide essential support
the TIF. These facilities are more specifically
Facility Schedule.
ator's interconnection facilities as described
all have the meaning described in PUCT Rule
\page
s)" shall mean any federal, state, local, or
on over a Party.
Capitalized terms shall have the

otherwise specified in the Agree
1.1
"Common Switchyard" shall
facilities are located within a

may not be enclosed by a common
1.2
"ERCOT" shall mean the Ele
1.3
"ERCOT Requirements" means
Interconnection Procedures as we
relating to the interconnection
systems in ERCOT as amended from
requirement in the foregoing doc
generation facilities shall beco
requirements imposed on transmis
become the responsibility of the
1.4
"Generator-Owned Support F
facilities located within the Pl

to the TSP for the operation of
described in Exhibit "D" and the
1.5
"GIF" shall mean the Gener
in the Facility Schedule.

1.6
"Good Utility Practice" sh
25.5(23) or its successor.

1
1.7
"Governmental Authority(ie
municipal body having jurisdicti

1.8
"Plant" shall mean the ind
ividual electric generation facility(ies) owned

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operated by the Generator, a
s specified in the Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.9 "Point of Interconnection"
shall mean the location(s) where the GIF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connects to the TIF as negotiate
d and defined by the Parties and as shown in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.10 "PUCT" shall mean the Publ
ic Utility Commission of Texas.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.11 "PUCT Rules" shall mean th
e Substantive Rules of the PUCT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.12 "System Protection Equipme
nt" shall mean those facilities located within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TIF and the GIF as described
in Section 4.5 and Exhibit "B".
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.13 "TIF" shall mean the TSP's
interconnection facilities as described in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.14 "TSP" shall mean the Trans
mission Service Provider.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.15 "TSP-Owned Support Facilit
ies" shall mean those TSP-owned facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql located within the Plant and/or
GIF that provide essential support to the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the operation of the TIF and
those TSP-owned facilities located within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TIF that provide essential suppo
rt to the Generator for the operation of the GIF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Plant. These facilities a
re more specifically described in Exhibit "D"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.16 "TSP Support Services" sha
ll mean those services provided by the Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the TSP to support the operat
ion of the TIF. Such services are described in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit "D" and the Facility Sch
edule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.17 "TSP System" shall mean th
e electric transmission facilities, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TIF, and all associated equi
pment and facilities owned and/or operated by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 2. TERMINATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 Termination Procedures.
This Agreement may be terminated in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entirety, or with respect to an
individual Facility Schedule, if one of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following provisions are met:
\page
SP with twenty-four (24) months advance
rseded by a comparable new Generation
ies are in place, in the sole discretion
te the TSP System without the TSP-owned Support
upport Facilities upon disconnection of the GIF
as provided the TSP with at least thirty (30)
ermination (which notice may be the notice
rties; or
h Section 8.6.
ation of this Agreement, or an individual
ill disconnect the relevant GIF from the TIF.
this executed Agreement with the appropriate
red. Any portions of this Agreement asserted by
tively sensitive commercial or financial
e TSP identified as "confidential" under seal
f good cause, that the Generator asserts such
rmation and has requested such filing under
he Generator shall provide the TSP, in writing,
sserting that the information referred to in
y sensitive information, and the TSP may
ropriate Governmental Authority.
2
A. the Generator provides the T
written notice;
B. this Agreement has been supe
Interconnection Agreement;
C. all of the necessary facilit
of the TSP, for the TSP to opera
Facilities and Generator-Owned S
from the TIF and the Generator h
days advance written notice of t
provided for in Part A above);
D. mutually agreed to by the Pa
E. terminated in accordance wit
2.2
Disconnection. Upon termin
Facility Schedule, the Parties w

ARTICLE 3. REGULATORY FILINGS
3.1
Filing. The TSP shall file
Governmental Authority, if requi

the Generator to contain competi
information shall be filed by th
stating, for the TSP's showing o
information is confidential info
seal. If requested by the TSP, t
with the Generator's basis for a
this Section 3.1 is competitivel
disclose such writing to the app
3.2
Regulatory Approvals. Unle
ss exempt, the TSP shall timely request ERCOT

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all regulatory approvals nec
essary for it to carry out its responsibilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Agreement.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 4. FACILITIES AND EQUIPM
ENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Ownership of Facilities. Th
e ownership of facilities by each respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall be as provided in th
e Facility Schedule attached to this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such Facility Schedule shall als
o define the Points of Interconnection at which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the facilities of the Parties in
terconnect.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Information Exchange. The
Parties shall exchange information and mutually
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agree upon the design and compat
ibility of the Parties' interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities. The Parties shall wo
rk diligently and in good faith to make any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary design changes to ensu
re compatibility of the GIF to the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.3 Equipment Changes. For fac
ilities not described in the Facility Schedule,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if either Party makes equipment
changes to the Plant, the GIF, the TIF or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP System that it knows will af
fect the operation or performance of the other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party's interconnection faciliti
es, the Parties agree to notify the other Party,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing, of such changes. Suc
h changes shall be made in accordance with ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements and coordinated bet
ween the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.4 Metering, Telemetry, and C
ommunications Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Metering and telemetry of dat
a will be accomplished in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT Requirements. The specific
metering, telemetry, and communications
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment and data to be telemet
ered are described in the Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The TSP shall, at its own cos
t and expense, and in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT Requirements, furnish, own
, operate, inspect, test, and maintain metering
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and telemetry equipment at the P
oint of Interconnection, unless otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the applicable Faci
lity Schedule. However, the TSP shall provide

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator with metering and
telemetry values in accordance with ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The Generator shall, at its o
wn cost and expense, and in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with ERCOT Requirements, furnish
, own, operate, inspect, test, and maintain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment necessary to supply th
e TSP with the data specified in each Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule. A minimum set of input
s to the telemetry equipment are specified in
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Facility Schedule. Additiona
l sets of inputs may be subsequently mutually
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed upon.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. The TSP will notify the Gener
ator at least five (5) working days in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advance of any planned maintenan
ce, inspection, testing, or calibration of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metering equipment, unless other
wise agreed to in writing. The Generator, or its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated representative, shall
have the right to be present for these
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql activities and to receive copies
of any documents related to the procedures and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. The Parties shall ensure the
proper functioning of all metering,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telemetry, and communications eq
uipment associated with the Point of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interconnection and both Parties
' interconnection facilities, and verify the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accuracy of data being received
by the TSP and the Generator. All tests will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performed consistent with ERCOT
Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. The TSP shall, in accordance
with Good Utility Practice and ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements, specify communicat
ions facilities, including those necessary to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmit data from the metering
equipment to the TSP, that are necessary for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective operation of the Plant
and the GIF with the TSP System. Such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communication facilities shall b
e included in the Facility Schedule. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator shall make arrangement
s to procure and bear the cost of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities, unless otherwise spe
cified in the applicable Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. Any changes to the meters, te

lemetry equipment, voltage transformers,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current transformers, and associ
ated panels, hardware, conduit, and cable, which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will affect the data being recei
ved by the other Party must be mutually agreed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to by the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. Each Party will promptly advi
se the other Party if it detects or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise learns of any metering
, telemetry or communications equipment errors
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or malfunctions that require the
attention and/or correction by the other Party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Party owning such equipment
shall correct such error or malfunction as soon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as reasonably feasible in accord
ance with ERCOT Requirements.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.5 System Protection and Othe
r Controls Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Each Party's facilities shall
isolate any fault, or correct or isolate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any abnormality, which would neg
atively affect the other Party's system or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entities connected to the TSP Sy
stem.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The Generator shall be respon
sible for protection of its facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consistent with ERCOT Requiremen
ts.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Each Party's protective relay
design shall incorporate the necessary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql test switches to perform the tes
ts required in Section 4.5 F. The required test
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql switches will be placed such tha
t they allow operation of lockout relays while
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preventing breaker failure schem
es from operating and causing unnecessary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breaker operations and tripping
the Generator's units.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Recording equipment shall be
installed to analyze all system
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disturbances in accordance with
ERCOT Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Each Party will test, operate
, and maintain System Protection Equipment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with ERCOT Require
ments and Exhibit "B". Each Party will provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable notice to the other P
arty of any testing of its System Protection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment allowing such other Pa

rty the opportunity to have representatives
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present during testing of its Sy
stem Protection Equipment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. At intervals suggested by Goo
d Utility Practice or at intervals
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in the ERCOT Requireme
nts if so defined therein, and following any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql apparent malfunction of the Syst
em Protection Equipment, each Party shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform both calibration and fun
ctional trip tests of its System Protection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment. These tests do not re
quire the tripping of any in-service generation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unit. These tests do, however, r
equire that all protective relays and lockout
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contacts be activated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.6 No Annexation. Any and all
equipment placed on the premises of a Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be and remain the property
of the Party providing such equipment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regardless of the mode and manne
r of annexation or attachment to real property,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless otherwise mutually agreed
by the Parties.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 5. OPERATION AND MAINTEN
ANCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1 Operation and Maintenance
of Interconnection Facilities. The Parties agree
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to operate and maintain their sy
stems in accordance with Good Utility Practice,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the National Electrical Safety C
ode, the ERCOT Requirements, the PUCT Rules, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all applicable laws and regulati
ons. Subject to any necessary ERCOT approval,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Party shall provide necessa
ry equipment outages to allow the other Party to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform periodic maintenance, re
pair, or replacement of its facilities. Such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outages shall be scheduled at mu
tually agreeable times, unless conditions exist
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which a Party believes, in accor
dance with Good Utility Practice, may endanger
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons or property. No changes
will be made in the normal operation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Point of Interconnection without
the mutual agreement of the Parties except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise provided herein. All t
esting of the Plant, the GIF, or the TIF that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affects the operation of the Poi
nt of Interconnection shall be coordinated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the TSP and the Generato
r and will be conducted in accordance with ERCOT

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 Land Rights and Easements.
Terms and conditions addressing the rights of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP and the Generator regard
ing any facilities located on the other Party's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property shall be addressed in a
separate, duly executed and recorded easement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement between the Parties. T
he Parties will mutually agree upon procedures
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to govern access to each other's
property as necessary for the Parties to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fulfill their obligations hereun
der.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.3 Service Interruption. The
Parties recognize that the interruption of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service provisions of the PUCT R
ules give the TSP the right to disconnect the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP System from a Plant under th
e conditions specified therein. The Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will promptly disconnect a Plant
from the TSP System when required by and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the PUCT Rules a
nd ERCOT Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.4 Switching and Clearance.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Any switching or clearances n
eeded on the TIF or the GIF will be done
ments.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Any switching and clearance p
rocedure necessary to comply with Good
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Utility Practice or ERCOT Requir
ements that may have specific application to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant shall be addressed in the
applicable Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.5 Start-Up and Synchronizatio
n. Consistent with ERCOT Requirements and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties' mutually acceptable pro
cedure, the Generator is responsible for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proper synchronization of each P
lant to the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.6 Routine Operational Communi
cations. On a timely basis, the Parties shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange all information necessa
ry to comply with ERCOT Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.7 Blackstart Operations. If
a Plant is capable of blackstart operations, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator will coordinate indivi
dual Plant start-up procedures consistent with

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT Requirements. Any blacksta
rt operations shall be conducted in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the blackstart criteria inc
luded in the ERCOT Requirements and the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Blackstart Plan on file with ERC
OT. Notwithstanding this section, the Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is not required to have blacksta
rt capability by virtue of this Agreement. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator will have blacksta
rt capability, then the Generator shall provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and maintain an emergency commun
ication system that will interface with the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during a blackstart condition.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.8 Power System Stabilizers. T
he Generator shall procure, install, maintain,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operate power system stabili
zers if required to meet ERCOT Requirements and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as described in the Facility Sch
edule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 6. DATA REQUIREMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.1 Data Acquisition. The acqu
isition of data to realistically simulate the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electrical behavior of system co
mponents is a fundamental requirement for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development of a reliable interc
onnected transmission system. Therefore, the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Generator shall be requi
red to submit specific information regarding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electrical characteristics of th
eir respective facilities to each other as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described below in accordance wi
th ERCOT Requirements.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.2 Data Submission by TSP. Upo
n request, the TSP shall provide transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql system data necessary to allow t
he Generator to meet any system protection and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stability requirements within a
reasonable period of time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.3 Data Submission by Generato
r. Upon request, the Generator shall provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant data to the TSP within a r
easonable period of time, including a completed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy of the following forms cont
ained in ERCOT's Generation Interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Procedure: (1) Plant Description
/Data and (2) Generation Stability Data. Upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator's request, the TSP
shall supply the Generator with any data for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator's Plant(s) in the
possession of the TSP, and the Generator shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review, revise, and supplement s

uch data as necessary to accurately model the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's Plant(s) in electric
al studies, and shall provide such revisions and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplements to the TSP and ERCOT
. Data submissions shall be "as-built" data or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "as-tested" performance data. Da
ta submitted for stability models shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compatible with the ERCOT standa
rd models. If there is no compatible model, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator will work with an ERCO
T designated consultant to develop and supply a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standard model and associated da
ta. Data submissions by the Generator shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made to both the TSP and ERCOT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.4 Data Supplementation. The
Generator shall provide the TSP and ERCOT any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql data changes due to equipment re
placement, repair, or adjustment. The TSP shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide the Generator any data c
hanges due to equipment replacement, repair, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment in the directly conne
cted substation or any adjacent TSP-owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substation that may affect the G
IF equipment ratings, protection, or operating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements. The Parties shall
provide such data no later than thirty (30) days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the date of the actual cha
nge in equipment characteristics. Also, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties shall provide to each ot
her a copy of any additional data later required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by ERCOT concerning these facili
ties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.5 Data Exchange. Each Party s
hall furnish to the other Party real-time and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forecasted data as required by E
RCOT Requirements. The Parties will cooperate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with one another in the analysis
of disturbances to either the Plant or the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System by gathering and providin
g access to any information relating to any
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disturbance, including informati
on from oscillography, protective relay targets,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breaker operations, and sequence
of events records.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 7. INSURANCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.1 Each Party shall, at its o
wn expense, maintain in force throughout the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of this Agreement and unt
il released by the other Party the following
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minimum insurance coverages, wit
h insurers authorized to do business in Texas:

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Employers Liability and Worke
r's Compensation Insurance providing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statutory benefits in accordance
with the laws and regulations of the State of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas. The minimum limits for th
e Employer's Liability insurance shall be One
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Million Dollars ($1,000,000) eac
h accident bodily injury by accident, One
h employee bodily injury by disease, and One
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Million Dollars ($1,000,000) pol
icy limit bodily injury by disease.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Commercial General Liability
Insurance including premises and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations, personal injury, bro
ad form property damage, broad form blanket
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contractual liability coverage (
including coverage for the contractual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnification) products and co
mpleted operations coverage, coverage for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql explosion, collapse and undergro
und hazards, independent contractors coverage,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql coverage for pollution to the ex
tent normally available and punitive damages to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent normally available, a
nd a cross liability endorsement, with minimum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limits of One Million Dollars ($
1,000,000) per occurrence/One Million Dollars
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ($1,000,000) aggregate combined
single limit for personal injury, bodily injury,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including death and property dam
age.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Comprehensive Automobile Liab
ility Insurance for coverage of owned,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-owned, and hired vehicles, t
railers or semi-trailers designed for travel on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public roads, with a minimum com
bined single limit of One Million Dollars
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ($1,000,000) per occurrence for
bodily injury, including death, and property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damage.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Excess Public Liability Insur
ance over and above the Employer's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liability, Commercial General Li
ability, and Comprehensive Automobile Liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Insurance coverage, with a minim
um combined single limit of Twenty Million
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dollars ($20,000,000) per occurr
ence/Twenty Million Dollars ($20,000,000)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. The Commercial General Liabil
ity Insurance, Comprehensive Automobile
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liability Insurance, and Excess
Public Liability Insurance polices shall name
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other Party, its parent, ass
ociated and affiliated companies, and their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective directors, officers,
agents, servants, and employees ("Other Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group") as additional insured. A
ll policies shall contain provisions whereby the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurers waive all rights of sub
rogation in accordance with the provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement against the Other
Party Group and provide thirty (30) days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advance written notice to Other
Party Group prior to anniversary date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation or any material cha
nge in coverage or condition.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. The Commercial General Liabil
Public Liability Insurance policies shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contain provisions that specify
that the policies are primary and shall apply to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such extent without consideratio
n for other policies separately carried and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall state that each insured is
provided coverage as though a separate policy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql had been issued to each, except
the insurer's liability shall not be increased
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beyond the amount for which the
insurer would have been liable had only one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insured been covered. Each Party
shall be responsible for its respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deductibles or retentions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. The Commercial General Liabil
Public Liability Insurance policies, if written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on a Claims First Made basis, sh
all be maintained in full force and effect for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql two (2) years after termination
of this Agreement, which coverage may be in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form of tail coverage or extende
d reporting period coverage if agreed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. The requirements contained he
rein as to the types and limits of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance to be maintained by th
e Parties are not intended to and shall not in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any manner, limit or qualify the
liabilities and obligations assumed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties under this Agreement.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. Within ten (10) days followin
g execution of this Agreement, and as soon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as practicable after the end of
each fiscal year or at the renewal of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance policy and in any even
t within ninety (90) days thereafter, each Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall provide certification of a
ll insurance required in this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by each insurer or by a
n authorized representative of each insurer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql J. Notwithstanding the foregoing
, each Party may self-insure to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it maintains a self-insurance pr
ogram; provided that, such Party's senior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured debt is rated at investm
ent grade, or better, by Standard & Poor's. For
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any period of time that a Party'
s senior secured debt is unrated by Standard &
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Poor's or is rated at less than
investment grade by Standard & Poor's, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall comply with the insu
rance requirements applicable to it under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 7.1.A through 7.1.I. In
the event that a Party is permitted to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql self-insure pursuant to this Sec
tion 7.1.J, it shall not be required to comply
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the insurance requirements
applicable to it under Sections 7.1.A through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.1.I.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql K. The Parties agree to report t
o each other in writing as soon as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practical all accidents or occur
rences resulting in injuries to any person,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including death, and any propert
y damage arising out of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 8. MISCELLANEOUS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.1 Governing Law and Applicab
le Tariffs.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. THIS AGREEMENT FOR ALL PURPOS
ES SHALL BE CONSTRUED IN ACCORDANCE WITH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS, EXCLUDING CONFLICTS OF LAW
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PRINCIPLES THAT WOULD REFER TO T
HE LAWS OF ANOTHER JURISDICTION. THE PARTIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBMIT TO THE JURISDICTION OF TH
E FEDERAL AND STATE COURTS IN THE STATE OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TEXAS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. This Agreement is subject to
all valid, applicable rules, regulations,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and orders of, and tariffs appro
ved by, duly constituted Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorities.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Each Party expressly reserves
the right to seek changes in, appeal, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise contest any laws, orde
rs, rules, or regulations of a Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.2 No Other Services. This Ag
reement is applicable only to the interconnec\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tion of the Plant to the TSP Sys
tem at the Point of Interconnection and does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligate either Party to provide
, or entitle either Party to receive, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service not expressly provided f
or herein. Each Party is responsible for making
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the arrangements necessary for i
t to receive any other service that it may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desire from the other Party or a
ny third party. This Agreement does not address
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sale or purchase of any elec
tric energy, transmission service, or ancillary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services by either Party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.3 Entire Agreement. This Agre
ement, including all Exhibits, Attachments, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules attached hereto, const
itutes the entire agreement between the Parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with reference to the subject ma
tter hereof, and supersedes all prior and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemporaneous understandings o
r agreements, oral or written, between the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties with respect to the subj
ect matter of this Agreement. There are no other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements, representations, war
ranties, or covenants that constitute any part
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the consideration for, or any
condition to, either Party's compliance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its obligations under this Agree
ment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.4 Notices. Except as otherwi
se provided in Exhibit "C", any formal notice,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand or request provided for i
n this Agreement shall be in writing and shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deemed properly served, given
or made if delivered in person, or sent by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either registered or certified m
ail, postage prepaid, overnight mail or fax to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the address or number identified
on Exhibit "C" attached to this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Either Party may change the noti
ce information on Exhibit "C" by giving five (5)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business days written notice pri
or to the effective date of the change.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.5 Force Majeure.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. The term "Force Majeure" as u
sed herein shall mean any cause beyond the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable control of the Party
claiming Force Majeure, and without the fault or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negligence of such Party, which
materially prevents or impairs the performance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Party's obligations here
under, including but not limited to, storm,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flood, lightning, earthquake, fi
re, explosion, failure or imminent threat of
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql failure of facilities, civil dis
turbance, strike or other labor disturbance,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sabotage, war, national emergenc
y, or restraint by any Governmental Authority.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Neither Party shall be consid
ered to be in Default (as hereinafter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined) with respect to any obl
igation hereunder other than the obligation to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay money when due, if prevented
from fulfilling such obligation by Force
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Majeure. A Party unable to fulfi
ll any obligation hereunder (other than an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to pay money when due
) by reason of Force Majeure shall give notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the full particulars of such
Force Majeure to the other Party in writing or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by telephone as soon as reasonab
ly possible after the occurrence of the cause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relied upon. Telephone notices g
iven pursuant to this Section shall be confirmed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing as soon as reasonably
possible and shall specifically state full
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particulars of the Force Majeure
, the time and date when the Force Majeure
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred and when the Force Maje
ure is reasonably expected to cease. The Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected shall exercise due dili
gence to remove such disability with reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispatch, but shall not be requi
red to accede or agree to any provision not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory to it in order to s
ettle and terminate a strike or other labor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disturbance.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.6 Default.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. The term "Default" shall mean
the failure of either Party to perform
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any obligation in the time or ma
nner provided in this Agreement. No Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall exist where such failure t
o discharge an obligation (other than the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of money) is the result
of Force Majeure as defined in this Agreement or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the result of an act or omission
of the other Party. Upon a Default, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-defaulting Party shall give
written notice of such Default to the defaulting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party. Except as provided in Sec
tion 8.6 B, the defaulting Party shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thirty (30) days from receipt of
the Default notice within which to cure such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default; provided however, if su
ch Default is not capable of cure within thirty
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (30) days, the defaulting Party
shall commence such cure within thirty (30) days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after notice and continuously an
d diligently complete such cure within ninety
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (90) days from receipt of the De
fault notice; and, if cured within such time,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Default specified in such no
tice shall cease to exist.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. If a Default is not cured as
provided in this Section, or if a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default is not capable of being
cured within the period provided for herein, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-defaulting Party shall have
the right to terminate this Agreement by written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice at any time until cure oc
curs, and be relieved of any further obligation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder and, whether or not th
at Party terminates this Agreement, to recover
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the defaulting Party all am
ounts due hereunder, plus all other damages and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedies to which it is entitled
at law or in equity. The provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section will survive termination
of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.7 Intrastate Operation. The
operation of the Plant by Generator shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause there to be a synchronous
or an asynchronous interconnection between ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any other transmission facil
ities operated outside of ERCOT unless ordered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Federal Energy Regulatory
Commission under Section 210 of the Federal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Power Act. The Parties recognize
and agree that any such interconnection will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute an adverse condition
giving the TSP the right to immediately
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disconnect the TIF from the GIF,
until such interconnection has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disconnected. The Generator will
not be prohibited by this Section from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interconnecting the Plant with f
acilities operated by the Comision Federal de
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electricidad of Mexico, unless s
uch interconnection would cause ERCOT utilities

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that are not "public utilities"
under the Federal Power Act to become subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the plenary jurisdiction of the
Federal Energy Regulatory Commission.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.8 No Third Party Beneficiari
es. This Agreement is not intended to and does
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not create rights, remedies, or
benefits of any character whatsoever in favor of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any persons, corporations, assoc
iations, or entities other than the Parties, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the obligations herein assumed a
re solely for the use and benefit of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties, their successors in int
erest and, where permitted, their assigns.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.9 No Waiver. The failure of
a Party to this Agreement to insist, on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occasion, upon strict performanc
e of any provision of this Agreement will not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql considered a waiver of obligatio
ns, rights, or duties imposed upon the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination or Default of this A
greement for any reason by the Generator shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not constitute a waiver of the G
enerator's legal rights to obtain an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interconnection from the TSP und
er a new interconnection agreement.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.10 Headings. The descriptive
headings of the various articles and sections of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement have been inserte
d for convenience of reference only and are of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no significance in the interpret
ation or construction of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.11 Multiple Counterparts. Thi
s Agreement may be executed in two or more
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterparts, each of which is d
eemed an original but all constitute one and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same instrument.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.12 Amendment. This Agreement
may be amended only upon mutual agreement of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties, which amendment will no
t be effective until reduced to writing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.13 No Partnership. This Agreem
ent shall not be interpreted or construed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql create an association, joint ven
ture, agency relationship, or partnership
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the Parties or to impose
any partnership obligation or liability upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either Party. Neither Party shal
l have any right, power or authority to enter

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into any agreement or undertakin
g for, or act on behalf of, or to act as or be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an agent or representative of, o
r to otherwise bind, the other Party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.14 Further Assurances. The Pa
rties agree to (i) furnish upon request to each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other such further information,
(ii) execute and deliver to each other such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other documents, and (iii) do su
ch other acts and things, all as the other Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may reasonably request for the p
urpose of carrying out the intent of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and the documents refe
rred to in this Agreement. Without limiting the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generality of the foregoing, the
TSP shall, at the Generator's expense, when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably requested to do so by
the Generator at any time after the execution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement, prepare and p
rovide such information in connection with this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement (including, if availab
le, resolutions, certificates, opinions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel or other documents relat
ing to the TSP's corporate authorization to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enter into this Agreement and to
undertake the obligations set out herein) as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be reasonably required by an
y potential lender to the Generator under a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed loan agreement. The TSP
will use commercially reasonable efforts to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtain any opinion of counsel re
asonably requested by Generator, but the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be in Default of any o
bligation under this Agreement if the TSP is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unable to provide an opinion of
counsel that will satisfy any potential lender
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Generator. Specifically,
upon the written request of one Party, the other
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall provide the requesti
ng Party with a letter stating whether or not,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql up to the date of the letter, th
at Party is satisfied with the performance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the requesting Party under this
Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.15 Indemnification and Liabil
ity. The indemnification and liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the PUCT Rule 25.2
02(b)(2) or its successor shall govern this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.16 Consequential Damages. IN
NO EVENT SHALL EITHER PARTY BE LIABLE UNDER ANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROVISION OF THIS AGREEMENT FOR

ANY LOSSES, DAMAGES, COSTS OR EXPENSES FOR ANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIAL, INDIRECT, INCIDENTAL, C
ONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING BUT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOT LIMITED TO LOSS OF PROFIT OR
REVENUE, LOSS OF THE USE OF EQUIPMENT, COST OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CAPITAL, COST OF TEMPORARY EQUIP
MENT OR SERVICES, WHETHER BASED IN WHOLE OR IN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PART IN CONTRACT, IN TORT, INCLU
DING NEGLIGENCE, STRICT LIABILITY, OR ANY OTHER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THEORY OF LIABILITY; PROVIDED, H
OWEVER, THAT DAMAGES FOR WHICH A PARTY MAY BE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIABLE TO THE OTHER PARTY UNDER
ANOTHER AGREEMENT WILL NOT BE CONSIDERED TO BE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIAL, INDIRECT, INCIDENTAL, O
R CONSEQUENTIAL DAMAGES HEREUNDER.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.17 Assignment. This Agreement
may be assigned by either Party only with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written consent of the other; pr
ovided that either Party may assign this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement without the consent of
the other Party to any affiliate of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigning Party with an equal or
greater credit rating and with the legal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority and operational abilit
y to satisfy the obligations of the assigning
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party under this Agreement. Any
attempted assignment that violates this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is void and ineffective. Any ass
ignment under this Agreement shall not relieve a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party of its obligations, nor sh
all a Party's obligations be enlarged, in whole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in part, by reason thereof. W
here required, consent to assignment will not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unreasonably withheld, condition
ed, or delayed.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.18 Severability. If any provi
sion in this Agreement is finally determined to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be invalid, void, or unenforceab
le by any court having jurisdiction, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination shall not invalida
te, void, or make unenforceable any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision, agreement or covenant
of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.19 Comparability. The Parties
will comply with all applicable comparability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and code of conduct laws, rules,
and regulations, as amended from time to time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.20 Invoicing and Payment. Unl
ess the Parties otherwise agree, invoicing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment rights and obligations u
nder this Agreement shall be governed by PUCT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rules or applicable Governmental

Authority. Invoices shall be rendered to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paying Party at the address spec
ified on, and payments shall be made in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the requirements
of, Exhibit "C".
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.21 Confidentiality.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Subject to the exception in
Section 8.21.B, any information that a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party claims is competitively se
nsitive, commercial or financial information
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Agreement ("Confident
ial Information") shall not be disclosed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Party to any person not em
ployed or retained by the other Party, except to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent disclosure is (i) req
uired by law; (ii) reasonably deemed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosing Party to be required
to be disclosed in connection with a dispute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between or among the Parties, or
the defense of litigation or dispute; (iii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise permitted by consent o
f the other Party, such consent not to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unreasonably withheld; or (iv) n
ecessary to fulfill its obligations under this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or as a transmission s
ervice provider including disclosing the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential Information to ERCO
T. The Party asserting confidentiality shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notify the other Party in writin
g of the information it claims is confidential.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prior to any disclosures of the
other Party's Confidential Information under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this subsection, or if any third
party or Governmental Authority makes any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request or demand for any of the
information described in this subsection, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosing Party agrees to promp
tly notify the other Party in writing and agrees
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to assert confidentiality and co
operate with the other Party in seeking to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql protect the Confidential Informa
tion from public disclosure by confidentiality
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement, protective order or o
ther reasonable measures.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. This provision shall not ap
ply to any information that was or is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter in the public domain
(except as a result of a breach of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision).
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT "B"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SYSTEM PROTECTION REQUIREMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System Protection Equipment shal
l consist of such control and protective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql devices installed, tested, and m
aintained by the Parties in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable ERCOT Requirements, N
ERC standards, and regulations of a Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority, including but not lim
ited to, protective relaying systems and circuit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breakers, as are necessary to pr
otect personnel and equipment and to minimize
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deleterious effects to the GIF,
the TSP System, and other entities connected to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The TSP shall determine any chan
ges to requirements for protection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Point of Interconnection
and the zone of protection around the Point of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interconnection and shall specif
y and implement the System Protection Equipment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to meet such requireme
nts. The Generator shall have the right to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review and comment on the necess
ary protection requirements and the TSP shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consider the Generator's comment
s when determining such requirements. Upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP's determination of such requ
irements, the Generator shall, at its expense,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide corrections or additions
to its System Protection Equipment in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with such determinati
on. Prior to the Generator modifying any System
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Protection Equipment involving t
he Point of Interconnection, the Generator shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql submit the proposed changes to t
he TSP for review and approval. The TSP's review
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and approval shall be for the li
mited purpose of determining whether such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed changes are compatible
with the TSP System. The TSP shall coordinate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the relay system protection betw
een the GIF and the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the GIF operate to facilitate
the interconnection of any of the Plant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities to the Southwest Powe
r Pool (or any other regional transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql organization other than ERCOT),
the Generator will utilize open circuit breakers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and air-break switches (which pr
ovide visible open indication) as a means of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql isolating such Plant facilities
from ERCOT.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Generator will design, const
ruct, and operate its electrical
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities such that all Plant a
uxiliary power sources for each generating unit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will come from the same regional
transmission organization as the generating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unit's output is connected.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant specific system protection
requirements are set forth in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule where appropri
ate.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT "C"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTICE AND EFT INFORMATION OF TH
E GENERATION INTERCONNECTION AGREEMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a)
All notices of an operat
ional nature shall be in writing and/or may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sent between the Parties via ele
ctronic means including facsimile as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to Transmission Service Provi
der:
If to Generator:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Electric Delivery Company
TXU Generation Company LP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Transmission Grid Shift Su
pervisor
Attn: CPSES Shift Manager
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2233 B Mountain Creek Parkway
P.O. Box 1002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dallas, TX 75211
Glen Rose, TX 76043
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operational/Confirmation Fax:
Operational/Confirmation Fax:
254-897-5994
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24 Hour Telephone: (214) 743-689
7
24 Hour Telephone: (254)897-5450
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E-mail: N/A
E-mail: N/A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b)
Notices of an administra
tive nature:
der:
If to Generator:
Attn: Jeffrey J. LaMarca
P.O. Box 1002
Glen Rose, TX 76043
Fax: (254) 897-0972
Phone: (254) 897-6688
E-mail: jlamarc1@txu.com
billing purposes:
der:
If to Generator:
Attn: Mark Mangum
P.O. Box 1002
Glen Rose, TX 76043
Phone: 254-897-6046
E-mail: mmangum1@txu.com
lectronic Funds Transfers:
der:
If to Generator:
Bank Name: N/A
Address: N/A
ABA No. N/A
For credit to: N/A
Account No. N/A
\page
S
Attn: Jeff Herring

1601 Bryan Street
Dallas, Texas 75201-3411
Fax: (214) 812-2788
Phone: 214-812-8613
E-mail: jherring@txu.com
(c)
Notice for statement and
If to Transmission Service Provi

TXU Electric Delivery Company
Attn: Jeff Herring
1601 Bryan Street
Phone: 214-812-8613
E-mail: jherring@txu.com
(d)
Information concerning E
If to Transmission Service Provi

Bank Name: N/A
Address: N/A
ABA No. N/A
For credit to: N/A
Account No. N/A
22
EXHIBIT "D"
SUPPLEMENTAL TERMS AND CONDITION
A.
OWNERSHIP
rship of facilities at points where
es interconnect with TSP-Owned Support
e with the provisions of this Section A, unless
ity Schedule.
nership changes where one Party's wires
nel owned by the other Party or where one
ntrol/relaying panel owned by the other Party.
otherwise specified in the Facility
ern with respect to Annunciator Panels:
or panels located within the confines of
The Generator owns the wiring connecting
ls to the TSP System.
nels located within the confines of the
owns the wiring connecting TSP-owned
owned equipment.
)
ween a Generator-owned RTU and the TSP
iring from the TSP System to the point where it
RTU.
tween a TSP-owned RTU and Generator-owned
e wiring from the Generator-owned equipment to
he TSP-owned RTU.
ring Equipment ("EPS Metering Equipment")
Equipment, unless otherwise specified in the
will own any wiring connecting Generator-owned
uipment.
1. Ownership and change of owne

Generator-Owned Support Faciliti
Facilities shall be in accordanc
otherwise specified in the Facil
2. Control/Relaying Panels - Ow
connect to a control/relaying pa
Party's equipment mounts on a co
3. Annunciator Panels - Unless
Schedule, the following will gov
(i) The Generator owns annunciat
the Plant control room/building.
Generator-owned annunciator pane
(ii) The TSP owns annunciator pa
Common Switchyard. The Generator
annunciator panels to Generator4. Remote Terminal Units ("RTU"
(i) For all connections made bet
System, the Generator owns the w
connects to the Generator-owned
(ii) For all connections made be
equipment, the Generator owns th
the point where it connects to t
5. ERCOT Polled Settlement Mete
- The TSP owns all EPS Metering
Facility Schedule. The Generator
equipment to the EPS Metering Eq
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Digital Fault Recorders ("DF
R")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) For all connections made bet
ween a Generator-owned DFR and TSP System,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator owns the wiring fr
om the TSP System to the point where it connects
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Generator-owned DFR.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) For all connections made be
tween a TSP-owned DFR and Generator-owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment, the Generator owns th
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the point where it connects to t
he TSP-owned DFR.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Common Switchyard/Plant Inte
rface Wiring - The Generator owns all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control, relay, and data circuit
s installed between the Common Switchyard and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plant.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Grounding Grids - The TSP ow
ns the Common Switchyard grounding grid.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Generator owns the Plant gro
unding grid. The Generator owns all wiring and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connections (1) between the Comm
on Switchyard grounding grid and the Plant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grounding grid and (2) from Gene
rator-owned equipment to the Common Switchyard
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grounding grid.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B.
COMMON SWITCHYARD
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. To ensure that federal licen
sing requirements are recognized and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supported by ERCOT and the TSP,
the ERCOT Operating Guides provide that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT control area authority and
the TSP shall uphold a generating facility's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal licensing requirements.
In that the Plant is a Nuclear Power Plant under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the review and regulations of th
e Nuclear Regulatory Commission, the Parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agree that all TSP activities wi
thin the Common Switchyard, including access to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Common Switchyard, and certa
in responsibilities related to operating,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintaining, repairing, modifyin
g, replacing, removing, relocating, inspecting,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or testing TSP's Common Switchya
rd facilities shall be carried out in compliance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Comanche Peak Steam Ele
ctric Station - Station Administration Manual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Switchyard Control Procedure No.
STA-629, as the same may be revised from time

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to time ("STA-629"), the applica
ble easements, and this Agreement. The Parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledge and agree that STA-6
29 shall include TSP's right to use ancillary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities and resources, includ
ing reasonable use of Plant parking spaces,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bathrooms, and water. STA-629 sh
all be the most current revision of STA-629
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which has been mutually agreed t
o by the TSP and Generator. The Parties shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review STA-629 each calendar yea
r for the purpose of making any necessary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revisions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Generator shall reasonab
ly cooperate with and support the TSP in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its performance of the activitie
s referenced in Section B(1) above. The TSP may,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in its discretion, use third par
ty contractors and subcontractors to perform all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or part of such activities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Grounds - The TSP will maint
ain all Common Switchyard grounds in neat
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition, including gravel, and
pest and weed control.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Grounding Grid - The integri
ty of all wiring and connections to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Common Switchyard grounding grid
from the Plant grounding grid and from all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator-owned equipment locate
d in Common Switchyard will be the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibility of the Generator.
If the Generator proposes to make grounding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql design changes or additions, the
Generator shall provide written documentation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and design drawings to the TSP f
or approval. The TSP shall review the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's documentation and (i
) approve the proposed changes or (ii) provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comments to the Generator on suc
h changes within thirty (30) days of receipt.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For work activities in the Commo
n Switchyard that will require digging in areas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in which the grounding grid exis
ts and which is utilized by both Parties, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party responsible for the work a
ctivity will be responsible for maintaining the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrity of the grounding grid.
For any major additions, the Party responsible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the addition will ensure tha
t the design requirements of the grounding grid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are met.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C.
TSP-OWNED SUPPORT FACILITI
ES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Non-Interference By the TSP
- In connection with the TSP's use of the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP-Owned Support Facilities, TS
P shall make reasonable efforts to minimize
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interference with the Generator'
s operation of the Plant facilities.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Non-Interference by the Gene
rator - The Generator shall not use the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP-Owned Support Facilities or
undertake any activities on or pertaining to or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which may otherwise impact, the
TSP-Owned Support Facilities, which may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially impair, or otherwise
interfere with, the TSP's use of the TSP-Owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Facilities. The Generato
r shall not permit any third parties (including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its contractors or agents) to us
e the TSP-Owned Support Facilities, or undertake
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any activities on or pertaining
to the TSP-Owned Support Facilities, without the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior consent of the TSP. Except
to the limited extent expressly permitted in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement, the Generator sh
all not deny TSP personnel, or its contractors,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql access to the TSP-Owned Support
Facilities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Costs and Expenses - The TSP
hereby agrees that the Generator shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be obligated to pay TSP any
fees or charges, and TSP shall not impose or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attempt to seek payment of any f
ees or charges, for or relating to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's use of the TSP-Owned
Support Facilities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D.
TSP SUPPORT SERVICES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Provision and Cost - During t
he term of this Agreement, the Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall, at no cost to the TSP, pr
ovide the following TSP Support Services:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) The Generator will, upon req
uest of the TSP, operate TIF breakers via
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control handles located in the P
lant control room.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) The Generator will observe
all Generator-Owned Support Facilities in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the control room that provide in
dication, status, or alarms regarding TIF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities and will notify the T
SP, as soon as reasonably possible, of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql abnormal condition of any TIF de
tected by such observation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) The Generator will notify
the TSP, as soon as reasonably possible,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any abnormal condition of any
TIF or any abnormal situation affecting any TIF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it detects during its norm
al patrol of the GIF in the Common Switchyard or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it otherwise becomes aware
of.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Termination / Addition of TS
P Support Services - The TSP may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate, in whole or in part,
any TSP Support Services at any time by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing written notice of such
termination to the Generator. The notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination will specify the eff
ective date of any such termination, and the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Service(s) or any part t
hereof to be terminated. New TSP Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Services may be added to this Ag
reement by mutual agreement of the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E.
GENERATOR-OWNED SUPPORT FA
CILITIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Provision - The Generator wi
ll furnish electricity to the TSP at no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cost for use by the TSP as speci
fied in the Facility Schedule, in connection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with its activities on the land
or within those facilities included within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql easements executed between the T
SP and the Generator in connection with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant. The Parties further ackno
wledge and agree that: (i) such electricity will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be furnished to the TSP solely i
n its capacity as a tenant of the Generator as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an incident of tenancy; and (ii)
the TSP and its contractors or agents will not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql knowingly permit such electricit
y to be resold to or used by others.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Modification - The Generator
will notify the TSP immediately in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing if the Generator obtains
information that gives it good cause to believe
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that any provision of Section E
of Exhibit "D" will materially adversely affect
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator's (i) ability to r
etain its Exempt Wholesale Generator status; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) compliance with any Texas o
r federal statutory or regulatory requirements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governing the Generator. The Gen
erator's notice will include a detailed
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql explanation of the reasons for t

he Generator's concerns. The Parties agree to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql take such actions as may reasona
bly be required of each of them to avoid such a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result, while at the same time r
etaining for each Party to the fullest extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possible, the benefits of its ri
ghts under this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Non-Interference By the Gene
rator - In connection with the Generator's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use of the Generator-Owned Suppo
rt Facilities, Generator shall make reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql efforts to minimize interference
with the TSP's operation of the TIF.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Non-Interference by the TSP
- The TSP shall not use the Generator\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Owned Support Facilities or unde
rtake any activities on or pertaining to or
Generator-Owned Support Facilities, which may
interfere with, the Generator's use of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator-Owned Support Faciliti
es. The TSP shall not permit any third parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including its contractors or ag
ents) to use the Generator-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities, or undertake any act
ivities on or pertaining to the Generator-Owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Facilities, without the
prior consent of the Generator.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Costs and Expenses - The Gen
erator hereby agrees that the TSP shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be obligated to pay Generato
r any fees or charges, and Generator shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impose or attempt to seek paymen
t of any fees or charges, for or relating to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP's use of the Generator-Owned
Support Facilities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F.
CONDEMNATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Should any portions of the Gener
ator's real property that include any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP-Owned Support Facilities and
/or Generator-Owned Support Facilities be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriated or acquired by any
governmental agency or other party having the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power of eminent domain for publ
ic purpose or use, then those TSP-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities and/or Generator-Owne
d Support Facilities not condemned,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriated, or acquired by suc
h agency or other party shall, at the TSP's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option, be removed from the cond
emned or appropriated portion of the Plant and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GIF, at the TSP's cost, unless t
he TSP negotiates a separate arrangement with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the appropriate agency or other

party. The Generator shall not interfere with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP's right to negotiate wit
h the condemning authority or government agency
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other party. Further, to the
extent that all or any portion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's real property that c
ontain any TSP-Owned Support Facilities and/or
es become the subject of a condemnation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding, the Parties shall, a
t the TSP's request, pursue their best efforts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to sever the TSP's interest in t
he TSP-Owned Support Facilities and
es, and to have any condemnation awards
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically allocated between t
he respective rights and interest of the TSP and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator. The Generator sha
ll immediately notify the TSP of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condemnation action or proceedin
g which may be filed pertaining to the Plant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or GIF. The Generator shall
also notify the TSP of any such threatened
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condemnation and agrees not to s
ell the Plant or GIF, or any portions thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such acquiring agency or othe
r party, in lieu of condemnation, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing written notice to the
TSP, at least ninety (90) days prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed sale.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G.
ABANDONMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Notice - In the event the Ge
nerator proposes to abandon all or a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of any of the Plant and/
or GIF containing any TSP-Owned Support
d Support Facilities, the Generator shall give
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP prior written notice, at
least ninety (90) days before such proposed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql abandonment, and provide the TSP
an opportunity to purchase such abandoned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities or portions thereof (
subject to any applicable statutory or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory priorities) upon or w
ithin which such TSP-Owned Support Facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Generator-Owned Support F
acilities are located, such purchase to be at
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and for a price and upon terms a
s may be then agreed to between the Parties,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, neither such
notice nor such abandonment will relieve
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator of its obligations und
er this Agreement should TSP elect not to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase such facilities. The TS
P shall have a period of thirty (30) days from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of delivery of such not
ice within which to notify the Generator that it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intends to negotiate with the Ge
nerator in respect of its rights to purchase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such portions of the Plant and/o
r GIF. In the event that the TSP gives such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice, the Parties shall prompt
ly proceed to negotiate in good faith with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to TSP's prospective pur
chase of such portions of the Plant and/or GIF.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Generator shall not proceed
with or consummate its proposed abandonment for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a period of sixty (60) days from
its receipt of that notice, unless the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gives the Generator written noti
ce indicating that the TSP no longer wishes to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negotiate for the purpose of pur
chasing such portions of the Plant and/or GIF.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Rights of the TSP - In the ev
ent of any sale of all or a portion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant and/or GIF to another enti
ty, such sale shall be subject to the rights of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP under this Agreement, wi
th regard to access to and use of the TSP-Owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Facilities and Generator
-Owned Support Facilities. Any deed or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument of conveyance pertain
ing to TSP-Owned Support Facilities and/or
es from the Generator to another purchasing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entity must reference the TSP's
rights under this Agreement, and its related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights pursuant to the applicabl
e easement agreements, and clearly indicate that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP's easement rights, as pr
ovided for in the applicable easement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements, run with the transfe
rred portion of the Plant and/or GIF, and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related improvements or real pro
perty.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H.
LIENS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Discharge and Release - In th
e event that any portion of the TSP-Owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Facilities and/or Genera
tor-Owned Support Facilities becomes subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any mechanics', artisans' or mat
erialmen's lien, or other encumbrance chargeable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to or through the Generator, the
Generator shall promptly cause such lien or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encumbrance to be discharged and
released of record, without cost to the TSP,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall indemnify the TSP agai
nst all costs and expenses (including reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorney's fees) reasonably incu
rred in discharging and releasing such lien or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encumbrance; provided, that if a
ny such lien or encumbrance is not so discharged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and released after prior written
notice by the TSP to the Generator, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator fails to reasonably ob
tain such release or discharge, then the TSP may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay for or secure the release or
discharge thereof at the expense of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Exclusion of Facilities - In
the event the Generator grants a lien on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plant and/or GIF, the Genera
tor agrees that such lien shall not include the
Generator-Owned Support Facilities or, in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event that any mortgage granted
by the Generator must grant a lien on the
/or Generator-Owned Support Facilities under law
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in order to grant a lien on the
Plant and/or GIF, the Generator agrees that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to execution of any such m
ortgage the Generator shall cause the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's mortgagee(s) to exec
ute and deliver an agreement with the TSP to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reconvey the TSP-Owned Support F
acilities to the TSP and to subordinate its lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or encumbrance on the TSP-Owned
Support Facilities and Generator-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities to the rights of the
TSP. All rights of the TSP to use the TSP-Owned
-Owned Support Facilities as described in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement shall be senior to any
lien or encumbrance created by the Generator.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I.
DISCONTINUED USE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The TSP may upon reasonable noti
ce to the Generator, and in the TSP's sole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion, discontinue the TSP'
s use of any designated TSP-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities or Generator-Owned Su
pport Facilities. Upon giving such notice, the
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP shall reasonably cooperate w
ith the Generator for purposes of implementing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any measures that may be necessa
ry to prevent the discontinued use of such
Generator-Owned Support Facilities from becoming
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a safety hazard to the Generator
's personnel working at the Plant and GIF. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event the TSP desires to ins
tall its own facilities to deliver AC power to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP Support Facilities, whic
h previously derived AC power from
es, the Generator will allow the TSP to install
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such facilities in accordance wi
th the easement agreements referenced in Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 of "Exhibit A" of this Agree
ment. The TSP shall have no other obligation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the discontinued
use of such facilities, including, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, as pertains to their
maintenance, repair, appearance, removal, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alteration.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql J.
LABOR AGREEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The TSP and the Generator shall
cooperate and coordinate their activities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in an effort to ensure that acti
vities performed by either of the Parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Exhibit "D" do
not conflict with, and are not inconsistent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with, the duties and obligations
of the Generator under the Generator's present
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or future labor agreements. In t
he event, however, that any such activities are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alleged or found to constitute a
breach of such labor agreements, the TSP shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be liable for any such breac
h.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql K.
ENVIRONMENTAL ISSUES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to those activities
, which are to take place within a Plant,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Plant control room, or a Commo
n Switchyard, the Party performing the work or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise managing the asset or
operations therein shall be responsible for (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ensuring that its activities are
performed in compliance with all applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql environmental regulations, (ii)
remediating any spills or environmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contamination or concerns result
ing from or occurring in connection with its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql activities as required by and in
accordance with applicable regulations, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) removing and properly disp
osing of all waste materials. The Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performing the work or other act
ivities shall, prior to commencement thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communicate to the other Party t
he job scope and needs so that both Parties are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fully aware of their respective
environmental responsibilities. In the event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a spill or the discovery of envi
ronmental contamination that potentially may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impact the other Party's propert
y or operations, both Parties shall work
ted plan of action for responding to the spill
ESTIGATION
e occurrence of an incident in a Plant, a
Switchyard that affects or is capable of
r Plant reliability, safety, environmental
, such Party shall promptly report the incident
a brief but informative report that includes
ncident, conclusion, corrective action, and
tive action. If the seriousness of the incident
ticipate in a joint investigation and produce a
oth Parties shall have the right to declare the
nt a joint investigation.
\page
CIES
Changes to Equipment - Prior to either
es to the TIF, GIF or Plant equipment, or
ls, trip, alarms or other interlock devices
the Party making such changes shall inform the
may affect the operation of the other Party.
s such as those found in programmable
other programmable devices, as well as hard
\page
together to establish a coordina

or contamination.
L.
INCIDENT REPORTING AND INV
If one Party becomes aware of th

Plant control room, or a Common
affecting the TSP System, GIF, o
compliance, or equipment failure
to the other Party. This will be
background, description of the i
person(s) responsible for correc
warrants, both Parties shall par
formal report of the incident. B
incident serious enough to warra
28
M.
SAFETY PROCEDURES AND POLI
Interlock Defeated or Temporary

Party making any temporary chang
bypassing or defeating of contro
associated with the TIF or GIF,
other Party of the changes that
This includes software interlock
controllers (PLC), computers or
wired or mechanical interlocks.
29
EXHIBIT "E"
FACILITY SCHEDULE
1.
Name: Comanche Peak Steam
Electric Station (CPSES)

ocation: The points at which the GIF interface
in the attached one-line diagram (see
dule):
or's 345kV switches 7999, 8009, 8019,
hes connect with TSP's 345 kV buses,
or's connectors where TSP's jumpers
transmission line at TSP's deadend
tches 7031 and 7041,
or's connectors where TSP's jumpers
transmission line at TSP's deadend
tches 7971 and 7981, and
or's 25kV potheads for Generator's
rator's 25 kV feeders 9811, 9812,
condary sides of TSP's Distribution
38 kV and 25kV
ing Units: Two Units - 1,150 MW each
nit 1 and Unit 2: Westinghouse Pressure Water
Generator.
ipment:
"A" of the Agreement.
ll EPS Metering Equipment in accordance
roposal submitted to and approved by
d from time to time.
2.
Point of Interconnection l
with the TIF at CPSES, as shown

attachment to this Facility Sche
(a) at the terminals of Generat
8029, and 8079 where these switc
(b) at the terminals of Generat
connect with Generator's 138 kV
located between TSP's 138 kV swi
(c) at the terminals of Generat
connect with Generator's 345 kV
located between TSP's 345 kV swi
(d) at the terminals of Generat
underground exit cables for Gene
9821, and 9822 located on the se
Transformers 1 and 2.
3.
Delivery Voltage: 345kV, 1
4.
Number and size of Generat
5.
Type of Generating Unit: U
Nuclear Reactor, Siemens Turbine

6.
Metering and Telemetry Equ
(a)
See Section 4.4 of Exhibit
(b)
TSP shall design and insta
with TSP's EPS Metering Design P

ERCOT, as the same may be amende
ch install such metering and telemetry
satisfy the operational requirements
tively, and ERCOT's real-time data
nt" as used in Section 4.4(D) of Exhibit
EPS Metering Equipment.
\page
Facilities: The GIF includes the facilities
re not intended to be a complete
located in the Plant and/or Common
ing facilities:
n facilities as shown in the
work, conductor, connectors,
dations
to the TSP-owned Common Switchyard
rator-owned equipment located
) the Plant grounding grid.
e following table.
LOCATION
DESCRIPTION OF
GENERATOR
-----------------------------------------\par\pard\plain\fs16
345kV Control 345 kV Breaker
House
8080
(c)
TSP and Generator shall ea
equipment as may be required to

of the TIF and Plant/GIF, respec
requirements.
(d)
The term "metering equipme
"A" shall be interpreted to mean
30
7.
Generator Interconnection
listed below. These facilities a

representation of the GIF.
(a)
Generator-owned facilities
Switchyard, including the follow

(lot) Generator
interconnectio
attached one-line diagram

(lot) Associated structures, bus
conduit, control cable, and foun
(lot) All wiring and connections
grounding grid from (i) all Gene
in the Common Switchyard and (ii
(lot) Facilities specified in th
EQUIPMENT NAME/LABEL/
DESCRIPTION
EQUIPMENT SERVED
-------------------------------Panel 2P
Panel 2BU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Primary and Backup)

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Panel 6P
345kV Control 345 kV Breakers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Panel 6BU
House
8000 and 8010
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Panel 10P
345kV Control 345 kV Breakers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Panel 10BU
House
8020 and 8030
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note: The Generator owns all con
duit and cable associated with these
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql panels, including the conduit an
d cable runs to the 345 kV breakers listed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in this table.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Generator-Owned Support F
acilities located in the Plant, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following facilities:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (lot) The physical building whic
h houses Generator-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities. This includes the bu
ilding structures as well as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lighting, HVAC, fire detection,
fire suppression, and fire
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extinguishing equipment containe
d within the building
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql structure.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (lot) Perimeter fencing and peri
meter lighting
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (lot) The AC power system which
supplies power to the TIF, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the facilities specified in the
following table.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GENERATOR-OWNED SUPPORT FACILITI
ES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BREAKER # IN AC
AC DIS
TRIBUTION
AC DISTRIBUTION
DESCRIPTION OF TSP-OWNED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DISTRIBUTION CIRCUIT
CIRCUI
T BREAKER
CIRCUIT BREAKER
FACILITIES SERVED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BREAKER PANEL
PANEL
LABEL
PANEL LOCATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Breaker is labeled:
480V A
C MCC
Unit One Normal
Panel #CPX-SYPPGS-02
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ckt Bkr #SWYDFDR1
Panel
1B1
Switchgear
(Located in 345 kV
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1B1/2D/Comp
Room #1031 Elev.
Control House)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 810 Unit One TB
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Breaker is labeled:
480V A
C MCC
Unit Two Normal
Panel #CPX-SYPPGS-03
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ckt Bkr
Panel
2B1
Switchgear Room
(Located in 345 kV
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql #SWYDFDR2
2B1/2D
/Comp
#2-287 Elev. 810
Control House)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unit Two TB
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Generator owns the AC dis
tribution circuit breaker panels listed in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this table (including all AC cir
cuit breakers) as well as all wiring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and facilities on the source sid
e of these distribution circuit breaker
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql panels for AC power supplied by
the Generator to the TSP. The Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owns all wiring and facilities f
rom the load side of the AC circuit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breakers listed in this table to
the point where the Generator's wiring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connects with TSP-owned faciliti
es.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Generator-Owned Support F
acilities listed in this table include
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's 480V - 480V isolatio
n transformers #2 labeled TRGS-2
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CPX-SYTRGS-02 and #3 labeled TRG
S-3 CPX-SYTRGS-03, served by Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuit breakers # SWYDFDR1 and
#SWYDFDR2, respectively. Isolation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transformers #2 and #3 are locat
ed in the 345 kV Common Switchyard and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supply 480V AC power to the TSP.
The change in ownership is where the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP-owned wiring from TSP's Pane
ls # CPX-SYPPGS-02 and CPX-SYPPGS-03
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connect to the secondary termina
ls of these isolation transformers.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (lot) Facilities specified in th
e following table:
-----------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
OCATION
DESCRIPTION OF TSP
-----------------------------------------\par\pard\plain\fs16
ontrol Room
Switchyard Control
-----------------------------------------\par\pard\plain\fs16
ontrol Room
Annunciator for
ontrol Room
Port for Transmission
lant
Control, relay, and
data circuits for TIF
equipment.
-----------------------------------------\par\pard\plain\fs16
A, for a detailed description of the
tween the Generator-Owned Support
ilities.
\page
cilities located in the Common Switchyard,
es:
e following table.
GENERATOR-OWNED SUPPORT
FACILITIES
-------------------------------NAME/LABEL/DESCRIPTION
EQUIPMENT SERVED BY OR
MOUNTED ON GENERATOR
EQUIPMENT
-------------------------------Panel CB-12
Panel
-------------------------------CB12 Annunciator Panel
switchyard alarms
RTU
-------------------------------Interconnect cable/wire
running from the Plant to

the Common Switchyard
-------------------------------Note: See Exhibit "D", Section
ownership/change in ownership be
Facilities and the TSP-owned fac
32
(c)
Generator-Owned Support Fa
including the following faciliti

(lot) Perimeter lighting
(lot) facilities specified in th
GENERATOR-OWNED SUPPORT
FACILITIES
----------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
OCATION
DESCRIPTION OF TSP
45kV Control Fire response to a
ouse
fire within the
345kV Control House
38kV Control Fire response to a
ouse
fire within the
138kV Control House
38 kV
138 kV and 345 kV
38 kV and 345 Communications
ommon
Control, relay,
witchyard
and data circuits
for TIF equipment.
-----------------------------------------\par\pard\plain\fs16
A, for a detailed description of the
tween the Generator-Owned Support
ilities.
der Interconnection Facilities: The TIF
elow. These facilities are not
entation of the TIF.
-------------------------------NAME/LABEL/DESCRIPTION
EQUIPMENT SERVED
BY OR MOUNTED ON
GENERATOR EQUIPMENT
-------------------------------Fire alarm circuits to fire
panels in the Turbine
Building
-------------------------------Fire alarm circuits to fire
panels in the Turbine
Building
-------------------------------Portable diesel generator
switchyard
Breakers
-------------------------------GAI-Tronics paging system
kV switchyards between Common

Switchyard and
Plant Control Room
-------------------------------Interconnect cable/wire
running from the Common
Switchyard to the Plant

-------------------------------Note: See Exhibit "D", Section
ownership/change in ownership be
Facilities and the TSP-owned fac
8.
Transmission Service Provi
includes the facilities listed b

intended to be a complete repres
ed in the Common Switchyard, including the
ties as shown in the attached
s, including transmission line
nds, metering structures,
ports, CT supports, line trap
it, control cable, foundations
\page
es located in the Common Switchyard,
es:
ng, except as specified in Item
g grid
supplies power to the GIF, including
following table.
DC DISTRIBUTION DESCRIPTION OF
CIRCUIT BREAKER GENERATOR-OWNED
PANEL LOCATION FACILITIES SERVED
345kV Control
345kV Breaker
(a)
TSP-owned facilities locat
following facilities:
(lot) TSP interconnection facili
one-line diagram
(lot) Galvanized steel structure
structures, deadends, switch sta
surge, arrester supports, PT sup
supports, and bus supports
(lot) Buswork, connectors, condu
33
(b)
TSP-Owned Support Faciliti
including the following faciliti

(lot) EPS Metering Equipment
(lot) Common Switchyard lighti
7(d) above
(lot) Common Switchyard groundin
(lot) The DC power system which
the facilities specified in the
TSP-OWNED SUPPORT FACILITIES
-------------------------------BREAKER # IN
DC
DC
DISTRIBUTION
DISTRIBUTION
CIRCUIT
CIRCUIT
BREAKER PANEL
BREAKER PANEL LABEL
-------------------------------Breaker No. 3
House
CPX-SYDPPR-01
8000
345kV Control
345kV Breaker
345kV Control
345kV Breaker
345kV Control
345kV Breaker
345kV Control
Panel CB-12 See
345kV Control
345kV Breaker
345kV Control
345kV Breaker
345kV Control
345kV Breaker
345kV Control
345kV Breaker
345kV Control
345kV Breaker
345kV Control
Panel CB-12 See
345kV Control
345kV Breaker
ion circuit breaker panels listed in this
breakers) as well as all wiring and
these distribution circuit breaker
the TSP to Generator facilities. The
cilities from the load side of the DC
table to the point where such Generator
wned facilities.
Breaker No. 4
House
CPX-SYDPPR-01
8010
Breaker No. 11 CPX-SYDPPR-01

House
8020

House
8030

House
Note2

House
Breaker No. 3
House
Breaker No. 4
House
8080
CPX-SYDPBU-01
8000
CPX-SYDPBU-01
8010
Breaker No. 11 CPX-SYDPBU-01

House
8020

House
8030

House
Note2

House
8080
Note:
1. The TSP owns the DC distribut
table (including all DC circuit
facilities on the source side of
panels for DC power supplied by
Generator owns all wiring and fa
circuit breakers listed in this
wiring connects with Generator-o
CPSES Control Room and is the Local
chyard. It provides the control and
rs.
\page
supplies power to the GIF, including
following table.
C DISTRIBUTION DESCRIPTION OF
IRCUIT BREAKER GENERATOR-OWNED
ANEL LOCATION
FACILITIES SERVED
45kV Control
345kV Breaker
45kV Control
Perimeter
45kV Control
Perimeter
45kV Control
Perimeter
45kV Control
Perimeter
2. Panel CB-12 is located in the

Control Panel for the 345kV Swit
indications for the 345kV Breake
34
(lot) The AC power system which
the facilities specified in the
TSP-OWNED SUPPORT FACILITIES
-------------------------------BREAKER # IN
AC
AC
DISTRIBUTION
DISTRIBUTION
CIRCUIT
CIRCUIT
BREAKER PANEL
BREAKER PANEL LABEL
-------------------------------Breaker No. 10 CPX-SYPPGS-01A 3
House
8080
-------------------------------Breaker No. 1
House
CPX-SYPPGS-02 3
Lighting
-------------------------------Breaker No. 2
House
CPX-SYPPGS-02 3
Lighting
-------------------------------Breaker No. 3
House
CPX-SYPPGS-02 3
Lighting
-------------------------------Breaker No. 4
House
CPX-SYPPGS-02 3
Lighting
-------------------------------Breaker No. 5
CPX-SYPPGS-02 3
45kV Control
Perimeter
45kV Control
Perimeter
45kV Control
345kV Breaker
45kV Control
345kV Breaker
45kV Control
345kV Breaker
45kV Control
345kV Breaker
45kV Control
345kV Breaker
45kV Control
Receptacles in
45kV Control
345kV Breaker
45kV Control
345kV Breaker
45kV Control
345kV Breaker
House
Lighting
-------------------------------Breaker No. 6
House
CPX-SYPPGS-02 3
Lighting
-------------------------------Breaker No. 8
CPX-SYPPGS-02 3
House
8000
-------------------------------Breaker No. 12 CPX-SYPPGS-02 3
House
8020
House
8010
House
8030
House
8080
House
345 kV Breaker
Bay #3
House
8020 &
receptacles in
345 kV Breaker
Bay #10
House
8000 &
receptacles in
345 kV Breaker
Bay #3
45kV Control
345kV Breaker
45kV Control
345kV Breaker
ion circuit breaker panels listed in this
breakers) as well as all wiring and
these distribution circuit breaker
the TSP to Generator facilities. Except
te 2, the Generator owns all wiring and
the AC circuit breakers listed in this
nerator wiring connects with
acles served by Breakers No 41, 42, 43,
\page
e with ERCOT Requirements and Good Utility
facilities that are, or may in the future
rconnected operation of the Generator's
em. Generator will directly make
bear the procurement, installation and
House
8020 &
receptacles in
345 kV Breaker
Bay #10
House
8010 &
receptacles in
345 kV Breaker
Bay #3
House
8030 &
receptacles in
345 kV Breaker
Bay #10
-------------------------------Notes:
1. The TSP owns the AC distribut
table (including all AC circuit
facilities on the source side of
panels for AC power supplied by
as specified in the following No
facilities from the load side of
table to the point where such Ge
Generator-owned facilities.
2. TSP owns all cable and recept
44, 45, and 46.
35
9.
Communications Facilities:
A. Generator shall, in accordanc

Practice, provide communications
be, necessary for effective inte
Plant with the transmission syst
arrangements to procure and will
. The communications facilities will at a
ted to:
one in each of the Generator's Plant
tension for TSP's PBX);
n Generator and TSP
cuit in the Plant Control Room
Plant control room
dard Type 420, or equivalent data circuit
ort in Generator's RTU to a location
cceptable to TSP, installed between
ent acceptable to TSP) and TSP's
ERCOT Requirements and Good Utility
facilities that are, or may in the future
rconnected operation of the Generator's
em. TSP will directly make arrangements to
ement, installation and ongoing costs of
ons facilities will at a minimum include,
en TSP and Generator
t:
"B" of the Agreement
, and maintain its protective relay and
t includes the current transformers,
ring, and relays associated with the
ongoing costs of such facilities

minimum include, but not be limi
(a) Two private voice circuits,
control rooms (an off-premise ex
(b) Radio communications betwee
(c) One full business voice cir
(d) A facsimile machine in the
(e) (i) One four-wire Bell Stan
installed from a communication p
designated by TSP; or
(ii) data communications link, a
Generator's RTU (or other equipm
RTU.
B. TSP shall, in accordance with
Practice, provide communications
be, necessary for effective inte
Plant with the transmission syst
procure and will bear the procur
such facilities. The communicati
but not be limited to:
(a)
Radio communications betwe
10.
System Protection Equipmen
(a) See Section 4.5 and Exhibit

(b) Generator shall own, operate
control equipment. This equipmen
voltage transformers, control wi
s to the main power transformer(s),
-up standby transformer(s), unit
tor protection, generator
systems, and diesel generators
y).
\page
maintain its protective relay and control
es the current transformers, voltage
d relays associated with all
built as an integrated facility, the
tive schemes are likewise integrated.
r associated with the generator
primarily protects the generator and
enerator is responsible for providing
he TIF for bus differential relaying
e-signal" to the TIF for conditions
equired to trip but fails to do so.
tains all other equipment associated
eaker failure relay protection
trip signal to the generator breaker
re TIF bus is required to trip.
ible for tripping all TIF breakers
erator breaker if the generator
a breaker-failure-signal to the TIF
esponsible for providing a voltage
ystem use, e.g. synchronizing.
, and maintains circuit breaker 8080 which
leads from the generator breaker

main power transformer(s), start
auxiliary transformer(s), genera
synchronization, plant auxiliary
associated with the plant (if an
36
(c) TSP shall own, operate, and
equipment. This equipment includ
transformers, control wiring, an
transmission line terminals.
(d) Because the GIF and TIF were
control schemes and relay protec
Although the high voltage breake
protects some TIF facilities, it
is owned by the Generator. The G
current transformer signals to t
and to provide a "breaker-failur
where the generator breaker is r
The TSP owns, operates, and main
with the bus differential and br
schemes. The TSP will provide a
for any condition where the enti
Additionally, the TSP is respons
electrically adjacent to the gen
breaker fails to trip and sends
protective schemes. The TSP is r
signal for the Plant's control s
(e) The Generator owns, operates
2ST and will provide current
failure signals to the TSP for the
eaker failure schemes. The TSP will
rator for transmission system faults
mes to trip circuit breaker 8080. The
intains the protective relaying
T, #XST1/2, and #XST2. In the event
lays activate, the Generator will (i)
to trip 345 kV breakers 7970 and
12, 8032, or 8052, and (iii) allow the
7970 and 7980. The TSP owns, operates
aying associated with the 345 kV high
Breaker 7970, Breaker 7980,
T1/2, and Transformer # XST2. For a
otection the TSP protective relays
7980, (ii) initiate a trip signal to
012, 8032, and 8052, and (iii)
970 and 7980. The Generator owns,
\page
tage air switch #8085 associated with
that the #XST1 transformer relays
provide a transfer trip signal to the
and 7040, (ii) close the high speed
h 8083, (iii) open switch 8085, and
ip signal to allow the closing of
040.
ent: Generator shall supply the following data
is associated with transformer #

transformer signals and breaker
existing bus differential and br
provide trip signals to the Gene
as required by the existing sche
Generator owns, operates, and ma
associated with transformers #1S
that any of these transformer re
provide a trip signal to the TSP
7980, (ii) open 345 kV switch 80
closing of transmission breakers
and maintains the protective rel
voltage conductor that connects
Transformer #1ST Transformer #XS
faults in this 345 kV zone of pr
will (i) open Breakers 7970 and
the plant to open air switches 8
automatically reclose breakers 7
37
operates, and maintains high vol
Transformer #XST1. In the event
activate, the Generator will (i)
TSP to trip 138 kV breakers 7030
138 kV single-phase ground switc
(iv) discontinue the transfer tr
transmission breakers 7030 and 7
11.
Inputs to Telemetry Equipm
to TSP's RTU.
ree phase megawatts and three phase
n GIF: Status indication, three phase
ars
F: A, B, and C phase voltages
e required for status indication and
required for megawatt, magavar, and
ditions:
D".
ovisions in this Agreement or the PUCT's
y, to the fullest extent permitted by
PROTECT, INDEMNIFY, AND HOLD HARMLESS
each of its affiliates (except the
spective officers, directors, agents,
and assigns, from, against, for, and
s, punitive damages, losses,
, liabilities, liens, demands,
s, causes of action, encumbrances,
nd expenses (including, without
rt costs, litigation expenses,
kind or character whatsoever,
SAME RESULT IN SOLE OR IN PART FROM
E, GROSS NEGLIGENCE, FAULT, STRICT
R OMISSIONS OF ANY KIND OR NATURE
te to, arise out of, or in connection
sponse, of the TSP System and/or TSP
, or in connection with, the following
(a) For each generating unit: th

megavars
(b) For each Generator breaker i
megawatts, and three phase megav
(c) For each Generator bus in GI
Dry type breaker "A" contacts ar
0-1 milliamp analog signals are
voltage data.
12.
Supplemental Terms and Con
(a) See Exhibits "B", "C", and "

(b) Notwithstanding any other pr
Substantive Rules to the contrar
law, the Generator shall DEFEND,
the TSP, its parent company and
Generator), and each of their re
employees, attorneys, successors
in respect of any and all damage
settlement payments, obligations
judgments, suits, claims, action
fines, penalties, costs, fees, a
limitation, attorney's fees, cou
interest, and penalties) of any
REGARDLESS OF WHETHER OR NOT THE
THE SOLE OR CONCURRENT NEGLIGENC
LIABILITY, OR INTENTIONAL ACTS O
WHATSOEVER OF THE TSP, that rela
with the response, or lack of re
personnel to faults occurring on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GIF facilities: (i) Standby Auxi

liary Transformer (Start-up #XST1),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) Standby Auxiliary Transform
ers (Start-up #1ST, #XST1/2, & #XST2),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (iii) 25 kV potheads and und
erground exit cables for Generator's
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25 kV feeders 9811, 9812, 9821,
and 9822 located on the secondary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sides of TSP's Distribution Tran
sformers 1 and 2, and all associated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql buswork, switches, switchgear an
d other associated equipment (see
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached one-line diagram).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. Special Operating Conditio
ns, if any, attached: A special ISO-approved
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operating arrangement such as a
Remedial Action Plan or Special
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Protection System may be require
d in the future. The terms "Remedial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Action Plan" and "Special Protec
tion System" shall have the meanings
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as set forth in the ERCOT Requir
ements. TSP and the ISO will examine
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the need and feasibility of thes
e arrangements in cooperation with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator. In the event that the
ISO determines that such an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement is required, then TS
P, the ISO, and Generator will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cooperate to design and install
the necessary facilities, and this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement will be amended to doc
ument such arrangement.
d\plain\cf1\f50\fs16\ql Exhibit 10(d)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GENERATION
\page
ONNECTION AGREEMENT........................3
of the ERCOT
ion Agreement..............................5
.........................................5
.........................................6
.........................................7
MENT.....................................7
ANCE....................................10
........................................12
........................................13
........................................15
quirements................................20
mation of the
ment......................................24
nd Conditions...........................22
rown
n
dova
Mountain
m
Creek
Hubbard
n Lake
cello
Creek
INTERCONNECTION AGREEMENT
TABLE OF CONTENTS
ERCOT STANDARD GENERATION INTERC
Exhibit "A" Terms and Conditions
Standard Generation Interconnect
ARTICLE 1. DEFINITIONS.........
ARTICLE 2. TERMINATION..........
ARTICLE 3. REGULATORY FILINGS..
ARTICLE 4. FACILITIES AND EQUIP
ARTICLE 5 OPERATION AND MAINTEN
ARTICLE 6. DATA REQUIREMENTS...
ARTICLE 7. INSURANCE...........
ARTICLE 8. MISCELLANEOUS.......
Exhibit "B" System Protection Re
Exhibit "C" Notice and EFT Infor
Generation Interconnection Agree
Exhibit "D" Supplemental Terms a
Facility Schedule No. 1 - Big B
Facility Schedule No. 2 - Colli
Facility Schedule No. 3 - DeCor
Facility Schedule No. 4 - Eagle
Facility Schedule No. 5 - Graha
Facility Schedule No. 6 - Lake
Facility Schedule No. 7 - Lake
Facility Schedule No. 8 - Marti
Facility Schedule No. 9 - Monti
Facility Schedule No.10 - Morgan
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.11 - North

Lake
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.12 - North
Main
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.13 - Parkda
le
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.14 - Permia
n Basin
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.15 - Riverc
rest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.16 - Stryke
r Creek
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.17 - Tradin
ghouse
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.18 - Trinid
ad
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No.19 - Valley
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No. 20 - Handl
ey
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedule No. 21 - Mount
ain Creek
\page
MENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Generation Interconnection
Agreement is made and entered into this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14th day of December, 2001, betw
een TXU Electric Delivery Company, a Texas
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation ("Transmission Servi
ce Provider") and TXU Generation Company LP, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas limited partnership, for i
tself and as agent for TXU Big Brown Company LP,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU Mountain Creek Company LP, T
XU Handley Company LP, TXU Tradinghouse Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LP, and TXU DeCordova Company LP
, each a Texas limited partnership (collectively
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the "Generator"), hereinafter in
dividually referred to as "Party," and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collectively referred to as "Par
ties." In consideration of the mutual covenants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and agreements herein contained,
the Parties hereto agree as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmission Service Provider re
presents that it is a public utility that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owns and operates facilities for
the transmission and distribution of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electricity. Generator represent
s that it will own and operate the Plants.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the terms and condit
ions of this Agreement, Transmission Service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Provider shall maintain an inter
connection between Generator's Plants and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmission Service Provider's

System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement applies only to t
he Plants and the Parties' interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities as identified in the
Facility Schedules attached hereto ("Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement shall become effe
ctive on January 1, 2002 and shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue in full force and effec
t until terminated in accordance with Exhibit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "A."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement will be subject t
o the following, all of which are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated herein:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. The "Terms and Conditions of
the Generation Interconnection Agreement"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached hereto as Exhibit "A";
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The ERCOT Requirements (unles
s expressly stated herein, where the ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements are in conflict wit
h this Agreement, the ERCOT Requirements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall prevail);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The PUCT Rules (where the PUC
T Rules are in conflict with this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the PUCT Rules shall prevail);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. The "System Protection Requir
ements" attached hereto as Exhibit "B";
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. The "Notice and EFT Informati
on of the Generation Interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement" attached hereto as Ex
hibit "C";
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. The "Supplemental Terms and C
onditions Specific to TSP-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities, Generator-Owned Supp
ort Facilities, TSP Support Services, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Areas of Common Switchyards" att
ached hereto as Exhibit "D"; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. The "Interconnection Details"
attached hereto as Facility Schedules.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the Parties
have executed this Agreement in duplicate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originals, each of which shall c
onstitute and be an original effective Agreement
between the Parties.
Company LLC
\page
RATION INTERCONNECTION AGREEMENT
meanings as set forth below, except as
ment:
TXU DeCordova Company LP
TXU ELECTRIC DELIVERY COMPANY

By: /s/ Thomas L. Baker
-----------------------------Name:
Thomas L. Baker
-----------------------------Title:
President
-----------------------------Date:
12/14/01
------------------------------
TXU
for
TXU
TXU
TXU
TXU
By:
GENERATION COMPANY LP
Itself and as Agent for
Big Brown Company LP,
Mountain Creek Company LP,
Handley Company LP,
Tradinghouse Company LP, and
TXU Generation Management
Its General Partner

By:
/s/ W.M. Taylor
------------------------------Name:
W. M. Taylor
------------------------------Title:
President
------------------------------Date:
12/14/01
------------------------------4
EXHIBIT "A"
TERMS AND CONDITIONS OF THE GENE
ARTICLE 1. DEFINITIONS
Capitalized terms shall have the
otherwise specified in the Agree
an a switchyard in which both GIF and TIF
Generator-owned geographical area, which may or
fence.
ric Reliability Council of Texas, Inc.
he ERCOT Operating Guides, ERCOT Generation
ll as any other documents adopted by ERCOT
and operation of generators and transmission
time to time, and any successors thereto. Any
uments imposed upon generation entities or
me the responsibility of the Generator, and any
sion providers or transmission facilities shall
TSP.
ilities" shall mean those Generator-owned
ant and/or GIF which provide essential support
the TIF. These facilities are more specifically
Facility Schedules.
or's interconnection facilities as described in
l have the meaning described in PUCT
" shall mean any federal, state, local, or
on over a Party.
\page
idual electric generation facility(ies) owned
s specified in the Facility Schedules.
1.1 "Common Switchyard" shall me

facilities are located within a
may not be enclosed by a common
1.2 "ERCOT" shall mean the Elect
1.3 "ERCOT Requirements" means t
Interconnection Procedures as we
relating to the interconnection
systems in ERCOT as amended from
requirement in the foregoing doc
generation facilities shall beco
requirements imposed on transmis
become the responsibility of the
1.4 "Generator-Owned Support Fac
facilities located within the Pl
to the TSP for the operation of
described in Exhibit "D" and the
1.5 "GIF" shall mean the Generat
the Facility Schedules.
1.6 "Good Utility Practice" shal
Rule 25.5(23) or its successor.
1.7 "Governmental Authority(ies)
municipal body having jurisdicti
1.8 "Plant" shall mean the indiv

and operated by the Generator, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.9 "Point of Interconnection" s

hall mean the location(s) where the GIF connects
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the TIF as negotiated and def
ined by the Parties and as shown in the Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.10 "PUCT" shall mean the Publi
c Utility Commission of Texas.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.11 "PUCT Rules" shall mean th
e Substantive Rules of the PUCT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.12 "System Protection Equipmen
t" shall mean those facilities located within
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TIF and the GIF as described
in Section 4.5 and Exhibit "B". 1.13 "TIF"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean the TSP's interconnec
tion facilities as described in the Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.14 "TSP" shall mean the Trans
mission Service Provider.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.15 "TSP-Owned Support Faciliti
es" shall mean those TSP-owned facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql located within the Plant and/or
GIF that provide essential support to the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the operation of the TIF and
those TSP-owned facilities located within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TIF that provide essential suppo
rt to the Generator for the operation of the GIF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Plant. These facilities a
re more specifically described in Exhibit "D"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Facility Schedules.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.16 "TSP Support Services" shal
l mean those services provided by the Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the TSP to support the operat
ion of the TIF. Such services are described in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit "D" and the applicable F
acility Schedules.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.17 "TSP System" shall mean the
electric transmission facilities, including the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TIF, and all associated equipmen
t and facilities owned and/or operated by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 2. TERMINATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 Termination Procedures. This
Agreement may be terminated in its entirety, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to an individual Fa
cility Schedule, if one of the following
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions are met:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. the Generator provides the
TSP with twenty-four (24) months advance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notice;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. this Agreement has been sup
erseded by a comparable new Generation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interconnection Agreement;
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. all of the necessary facili
ties are in place, in the sole discretion of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP, for the TSP to operate
the TSP System without the TSP-owned
-Owned Support Facilities upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disconnection of the GIF from th
e TIF and the Generator has provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP with at least thirty (30
) days advance written notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination (which notice may be
the notice provided for in Part A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. mutually agreed to by the P
arties; or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. terminated in accordance wi
th Section 8.6.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.2 Disconnection. Upon terminat
ion of this Agreement, or an individual Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule, the Parties will disco
nnect the relevant GIF from the TIF.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 3. REGULATORY FILINGS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Filing. The TSP shall file t
his executed Agreement with the appropriate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authority, if requi
red. Any portions of this Agreement asserted by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator to contain competi
tively sensitive commercial or financial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information shall be filed by th
e TSP identified as "confidential" under seal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stating, for the TSP's showing o
f good cause, that the Generator asserts such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information is confidential info
rmation and has requested such filing under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seal. If requested by the TSP, t
he Generator shall provide the TSP, in writing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Generator's basis for a
sserting that the information referred to in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 3.1 is competitivel
y sensitive information, and the TSP may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclose such writing to the app
ropriate Governmental Authority.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Regulatory Approvals. Unless
exempt, the TSP shall timely request ERCOT and

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all regulatory approvals necessa
ry for it to carry out its responsibilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 4. FACILITIES AND EQUIPM
ENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Ownership of Facilities. The
ownership of facilities by each respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall be as provided in th
e Facility Schedules attached to this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such Facility Schedules shall al
so define the Points of Interconnection at which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the facilities of the Parties in
terconnect.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Information Exchange. The Pa
rties shall exchange information and mutually
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agree upon the design and compat
ibility of the Parties' interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities. The Parties shall wo
rk diligently and in good faith to make any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary design changes to ensu
re compatibility of the GIF to the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.3 Equipment Changes. For facil
ities not described in the Facility Schedules,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if either Party makes equipment
changes to the Plant, the GIF, the TIF or the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP System that it knows will af
fect the operation or performance of the other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party's interconnection faciliti
es, the Parties agree to notify the other Party,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing, of such changes. Suc
h changes shall be made in accordance with ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements and coordinated bet
ween the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.4 Metering, Telemetry, and Com
munications Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Metering and telemetry of dat
a will be accomplished in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT Requirements. The specific
metering, telemetry, and communications
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment and data to be telemet
ered are described in the Facility Schedules.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The TSP shall, at its own cos
t and expense, and in accordance with ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements, furnish, own, oper
ate, inspect, test, and maintain metering and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telemetry equipment at the Point
of Interconnection, unless otherwise specified

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the applicable Facility Sched
ule. However, the TSP shall provide the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator with metering and tele
metry values in accordance with ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The Generator shall, at its o
wn cost and expense, and in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT Requirements, furnish, own
, operate, inspect, test, and maintain equipment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to supply the TSP with
the data specified in each Facility Schedule. A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minimum set of inputs to the tel
emetry equipment are specified in the Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules. Additional sets of in
puts may be subsequently mutually agreed upon.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. The TSP will notify the Gener
ator at least five (5) working days in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advance of any planned maintenan
ce, inspection, testing, or calibration of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metering equipment, unless other
wise agreed to in writing. The Generator, or its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated representative, shall
have the right to be present for these
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql activities and to receive copies
of any documents related to the procedures and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. The Parties shall ensure the
proper functioning of all metering,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telemetry, and communications eq
uipment associated with the Point of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interconnection and both Parties
' interconnection facilities, and verify the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accuracy of data being received
by the TSP and the Generator. All tests will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performed consistent with ERCOT
Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. The TSP shall, in accordance
with Good Utility Practice and ERCOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements, specify communicat
ions facilities, including those necessary to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmit data from the metering
equipment to the TSP, that are necessary for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective operation of the Plant
and the GIF with the TSP System. Such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communication facilities shall b
e included in the Facility Schedules. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator shall make arrangement
s to procure and bear the cost of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities, unless otherwise spe
cified in the applicable Facility Schedule.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. Any changes to the meters, te
lemetry equipment, voltage transformers,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current transformers, and associ
ated panels, hardware, conduit, and cable, which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will affect the data being recei
ved by the other Party must be mutually agreed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to by the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. Each Party will promptly advi
se the other Party if it detects or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise learns of any metering
, telemetry or communications equipment errors
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or malfunctions that require the
attention and/or correction by the other Party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Party owning such equipment
shall correct such error or malfunction as soon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as reasonably feasible in accord
ance with ERCOT Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.5 System Protection and Othe
r Controls Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Each Party's facilities shall
isolate any fault, or correct or isolate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any abnormality, which would neg
atively affect the other Party's system or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entities connected to the TSP Sy
stem.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The Generator shall be respon
sible for protection of its facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consistent with ERCOT Requiremen
ts.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Each Party's protective relay
design shall incorporate the necessary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql test switches to perform the tes
ts required in Section 4.5 F. The required test
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql switches will be placed such tha
t they allow operation of lockout relays while
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preventing breaker failure schem
es from operating and causing unnecessary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breaker operations and tripping
the Generator's units.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Recording equipment shall be
installed to analyze all system
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disturbances in accordance with
ERCOT Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Each Party will test, operate

, and maintain System Protection Equipment
ments and Exhibit "B". Each Party will provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable notice to the other P
arty of any testing of its System Protection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment allowing such other Pa
rty the opportunity to have representatives
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present during testing of its Sy
stem Protection Equipment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. At intervals suggested by Goo
d Utility Practice or at intervals
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in the ERCOT Requireme
nts if so defined therein, and following any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql apparent malfunction of the Syst
em Protection Equipment, each Party shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform both calibration and fun
ctional trip tests of its System Protection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment. These tests do not re
quire the tripping of any in-service generation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unit. These tests do, however, r
equire that all protective relays and lockout
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contacts be activated.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.6 No Annexation. Any and all e
quipment placed on the premises of a Party shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be and remain the property of th
e Party providing such equipment regardless of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the mode and manner of annexatio
n or attachment to real property, unless
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise mutually agreed by the
Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 5. OPERATION AND MAINTEN
ANCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1 Operation and Maintenance of
Interconnection Facilities. The Parties agree
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to operate and maintain their sy
stems in accordance with Good Utility Practice,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the National Electrical Safety C
ode, the ERCOT Requirements, the PUCT Rules, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all applicable laws and regulati
ons. Subject to any necessary ERCOT approval,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Party shall provide necessa
ry equipment outages to allow the other Party to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform periodic maintenance, re
pair, or replacement of its facilities. Such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outages shall be scheduled at mu
tually agreeable times, unless conditions exist
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which a Party believes, in accor
dance with Good Utility Practice, may endanger
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons or property. No changes
will be made in the normal operation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Point of Interconnection without
the mutual agreement of the Parties except as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise provided herein. All t
esting of the Plant, the GIF, or the TIF that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affects the operation of the Poi
nt of Interconnection shall be coordinated

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the TSP and the Generato
r and will be conducted in accordance with ERCOT
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 Land Rights and Easements. T
erms and conditions addressing the rights of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP and the Generator regarding
any facilities located on the other Party's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property shall be addressed in a
separate, duly executed and recorded easement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement between the Parties. T
he Parties will mutually agree upon procedures
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to govern access to each other's
property as necessary for the Parties to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fulfill their obligations hereun
der.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.3 Service Interruption. The Pa
rties recognize that the interruption of service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the PUCT Rules giv
e the TSP the right to disconnect the TSP System
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from a Plant under the condition
s specified therein. The Generator will promptly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disconnect a Plant from the TSP
System when required by and in accordance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the PUCT Rules and ERCOT Require
ments.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.4 Switching and Clearance.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Any switching or clearances n
eeded on the TIF or the GIF will be done in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with ERCOT Requiremen
ts.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Any switching and clearance p
rocedure necessary to comply with Good
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Utility Practice or ERCOT Requir
ements that may have specific application to a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant shall be addressed in the
applicable Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.5 Start-Up and Synchronization
. Consistent with ERCOT Requirements and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties' mutually acceptable pro
cedure, the Generator is responsible for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proper synchronization of each P
lant to the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.6 Routine Operational Communic
ations. On a timely basis, the Parties shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange all information necessa
ry to comply with ERCOT Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.7 Blackstart Operations. If a
Plant is capable of blackstart operations, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator will coordinate indivi
dual Plant start-up procedures consistent with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERCOT Requirements. Any blacksta
rt operations shall be conducted in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the blackstart criteria inc
luded in the ERCOT Requirements and the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Blackstart Plan on file withERCO
T. Notwithstanding this section, the Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is not required to have blacksta
rt capability by virtue of this Agreement. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator will have blacksta
rt capability, then the Generator shall provide
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and maintain an emergency commun
ication system that will interface with the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during a blackstart condition.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.8 Power System Stabilizers. Th
e Generator shall procure, install, maintain,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operate power system stabili
zers if required to meet ERCOT Requirements and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as described in the Facility Sch
edules.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 6. DATA REQUIREMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.1 Data Acquisition. The acquis
ition of data to realistically simulate the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electrical behavior of system co
mponents is a fundamental requirement for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development of a reliable interc
onnected transmission system. Therefore, the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Generator shall be requi
red to submit specific information regarding the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electrical characteristics of th
eir respective facilities to each other as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described below in accordance wi
th ERCOT Requirements.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.2 Data Submission by TSP. Upon
request, the TSP shall provide transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql system data necessary to allow t
he Generator to meet any system protection and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stability requirements within a
reasonable period of time.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.3 Data Submission by Generator
. Upon request, the Generator shall provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant data to the TSP within a r
easonable period of time, including a completed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy of the following forms cont
ained in ERCOT's Generation Interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Procedure: (1) Plant Description

/Data and (2) Generation Stability Data. Upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator's request, the TSP
shall supply the Generator with any data for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator's Plant(s) in the
possession of the TSP, and the Generator shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review, revise, and supplement s
uch data as necessary to accurately model the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's Plant(s) in electric
al studies, and shall provide such revisions and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplements to the TSP and ERCOT
. Data submissions shall be "as-built" data or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "as-tested" performance data. Da
ta submitted for stability models shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compatible with the ERCOT standa
rd models. If there is no compatible model, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator will work with an ERCO
T designated consultant to develop and supply a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standard model and associated da
ta. Data submissions by the Generator shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made to both the TSP and ERCOT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.4 Data Supplementation. The Ge
nerator shall provide the TSP and ERCOT any data
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changes due to equipment replace
ment, repair, or adjustment. The TSP shall
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide the Generator any data c
hanges due to equipment replacement, repair, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment in the directly conne
cted substation or any adjacent TSP-owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substation that may affect the G
IF equipment ratings, protection, or operating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements. The Parties shall
provide such data no later than thirty (30) days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the date of the actual cha
nge in equipment characteristics. Also, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties shall provide to each ot
her a copy of any additional data later required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by ERCOT concerning these facili
ties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.5 Data Exchange. Each Party sh
all furnish to the other Party real-time and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forecasted data as required by E
RCOT Requirements. The Parties will cooperate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with one another in the analysis
of disturbances to either the Plant or the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System by gathering and providin
g access to any information relating to any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disturbance, including informati
on from oscillography, protective relay targets,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breaker operations, and sequence
of events records.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 7. INSURANCE

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.1 Each Party shall, at its own
expense, maintain in force throughout the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of this Agreement and unt
il released by the other Party the following
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minimum insurance coverages, wit
h insurers authorized to do business in Texas:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Employers Liability and Worke
r's Compensation Insurance providing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statutory benefits in accordance
with the laws and regulations of the State of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas. The minimum limits for th
e Employer's Liability insurance shall be One
h accident bodily injury by accident, One
h employee bodily injury by disease, and One
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Million Dollars ($1,000,000) pol
icy limit bodily injury by disease.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Commercial General Liability
Insurance including premises and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations, personal injury, bro
ad form property damage, broad form blanket
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contractual liability coverage (
including coverage for the contractual
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnification) products and co
mpleted operations coverage, coverage for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql explosion, collapse and undergro
und hazards, independent contractors coverage,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql coverage for pollution to the ex
tent normally available and punitive damages to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent normally available, a
nd a cross liability endorsement, with minimum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limits of One Million Dollars ($
1,000,000) per occurrence/One Million Dollars
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ($1,000,000) aggregate combined
single limit for personal injury, bodily injury,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including death and property dam
age.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Comprehensive Automobile Liab
ility Insurance for coverage of owned,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-owned, and hired vehicles, t
railers or semi-trailers designed for travel on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public roads, with a minimum com
bined single limit of One Million Dollars
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ($1,000,000) per occurrence for
bodily injury, including death, and property
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damage.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Excess Public Liability Insur
ance over and above the Employer's

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liability, Commercial General Li
ability, and Comprehensive Automobile Liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Insurance coverage, with a minim
um combined single limit of Twenty Million
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dollars ($20,000,000) per occurr
ence/Twenty Million Dollars ($20,000,000)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. The Commercial General Liabil
Public Liability Insurance polices shall name
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other Party, its parent, ass
ociated and affiliated companies, and their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective directors, officers,
agents, servants, and employees ("Other Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group") as additional insured. A
ll policies shall contain provisions whereby the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurers waive all rights of sub
rogation in accordance with the provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement against the Other
Party Group and provide thirty (30) days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advance written notice to Other
Party Group prior to anniversary date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation or any material cha
nge in coverage or condition.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. The Commercial General Liabil
Public Liability Insurance policies shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contain provisions that specify
that the policies are primary and shall apply to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such extent without consideratio
n for other policies separately carried and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall state that each insured is
provided coverage as though a separate policy
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql had been issued to each, except
the insurer's liability shall not be increased
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beyond the amount for which the
insurer would have been liable had only one
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insured been covered. Each Party
shall be responsible for its respective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deductibles or retentions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. The Commercial General Liabil
Public Liability Insurance policies, if written
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on a Claims First Made basis, sh
all be maintained in full force and effect for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql two (2) years after termination
of this Agreement, which coverage may be in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form of tail coverage or extende

d reporting period coverage if agreed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. The requirements contained he
rein as to the types and limits of all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance to be maintained by th
e Parties are not intended to and shall not in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any manner, limit or qualify the
liabilities and obligations assumed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties under this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. Within ten (10) days followin
g execution of this Agreement, and as soon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as practicable after the end of
each fiscal year or at the renewal of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance policy and in any even
t within ninety (90) days thereafter, each Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall provide certification of a
ll insurance required in this Agreement,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by each insurer or by a
n authorized representative of each insurer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql J. Notwithstanding the foregoing
, each Party may self-insure to the extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it maintains a self-insurance pr
ogram; provided that, such Party's senior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured debt is rated at investm
ent grade, or better, by Standard & Poor's. For
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any period of time that a Party'
s senior secured debt is unrated by Standard &
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Poor's or is rated at less than
investment grade by Standard & Poor's, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall comply with the insu
rance requirements applicable to it under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 7.1.A through 7.1.I. In
the event that a Party is permitted to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql self-insure pursuant to this Sec
tion 7.1.J, it shall not be required to comply
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the insurance requirements
applicable to it under Sections 7.1.A through
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.1.I.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql K. The Parties agree to report t
o each other in writing as soon as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practical all accidents or occur
rences resulting in injuries to any person,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including death, and any propert
y damage arising out of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE 8. MISCELLANEOUS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.1 Governing Law and Applicab
le Tariffs.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A.
THIS AGREEMENT FOR ALL PUR
POSES SHALL BE CONSTRUED IN ACCORDANCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS, EXCLUDING
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONFLICTS OF LAW PRINCIPLES THAT
WOULD REFER TO THE LAWS OF ANOTHER

\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JURISDICTION. THE PARTIES SUBMIT
TO THE JURISDICTION OF THE FEDERAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND STATE COURTS IN THE STATE OF
TEXAS.
This Agreement is subject
to all valid, applicable rules,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations, and orders of, and
tariffs approved by, duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constituted Governmental Authori
ties.
Each Party expressly reser
ves the right to seek changes in, appeal,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or otherwise contest any laws, o
rders, rules, or regulations of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authority.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.2 No Other Services. This Agre
ement is applicable only to the interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plant to the TSP System a
t the Point of Interconnection and does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligate either Party to provide
, or entitle either Party to receive, any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service not expressly provided f
or herein. Each Party is responsible for making
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the arrangements necessary for i
t to receive any other service that it may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desire from the other Party or a
ny third party. This Agreement does not address
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sale or purchase of any elec
tric energy, transmission service, or ancillary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services by either Party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.3 Entire Agreement. This Agree
ment, including all Exhibits, Attachments, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules attached hereto, const
itutes the entire agreement between the Parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with reference to the subject ma
tter hereof, and supersedes all prior and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemporaneous understandings o
r agreements, oral or written, between the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties with respect to the subj
ect matter of this Agreement. There are no other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements, representations, war
ranties, or covenants that constitute any part
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the consideration for, or any
condition to, either Party's compliance with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its obligations under this Agree
ment.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.4 Notices. Except as otherwise
provided in Exhibit "C", any formal notice,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand or request provided for i

n this Agreement shall be in writing and shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deemed properly served, given
or made if delivered in person, or sent by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either registered or certified m
ail, postage prepaid, overnight mail or fax to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the address or number identified
on Exhibit "C" attached to this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Either Party may change the noti
ce information on Exhibit "C" by giving five (5)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business days written notice pri
or to the effective date of the change.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.5 Force Majeure.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. The term "Force Majeure" as u
sed herein shall mean any cause beyond the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable control of the Party
claiming Force Majeure, and without the fault or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negligence of such Party, which
materially prevents or impairs the performance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Party's obligations here
under, including but not limited to, storm,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flood, lightning, earthquake, fi
re, explosion, failure or imminent threat of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql failure of facilities, civil dis
turbance, strike or other labor disturbance,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sabotage, war, national emergenc
y, or restraint by any Governmental Authority.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Neither Party shall be consid
ered to be in Default (as hereinafter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined) with respect to any obl
igation hereunder other than the obligation to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay money when due, if prevented
from fulfilling such obligation by Force
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Majeure. A Party unable to fulfi
ll any obligation hereunder (other than an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to pay money when due
) by reason of Force Majeure shall give notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the full particulars of such
Force Majeure to the other Party in writing or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by telephone as soon as reasonab
ly possible after the occurrence of the cause
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relied upon. Telephone notices g
iven pursuant to this Section shall be confirmed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing as soon as reasonably
possible and shall specifically state full
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particulars of the Force Majeure
, the time and date when the Force Majeure
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred and when the Force Maje
ure is reasonably expected to cease. The Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected shall exercise due dili
gence to remove such disability with reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispatch, but shall not be requi
red to accede or agree to any provision not

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory to it in order to s
ettle and terminate a strike or other labor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disturbance.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.6 Default.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. The term "Default" shall mean
the failure of either Party to perform any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation in the time or manner
provided in this Agreement. No Default shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exist where such failure to disc
harge an obligation (other than the payment of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql money) is the result of Force Ma
jeure as defined in this Agreement or the result
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of an act or omission of the oth
er Party. Upon a Default, the non-defaulting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall give written notice
of such Default to the defaulting Party. Except
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided in Section 8.6 B, th
e defaulting Party shall have thirty (30) days
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from receipt of the Default noti
ce within which to cure such Default; provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, if such Default is not
capable of cure within thirty (30) days, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defaulting Party shall commence
such cure within thirty (30) days after notice
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and continuously and diligently
complete such cure within ninety (90) days from
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of the Default notice; a
nd, if cured within such time, the Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in such notice shall c
ease to exist.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. If a Default is not cured as
provided in this Section, or if a Default
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is not capable of being cured wi
thin the period provided for herein, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-defaulting Party shall have
the right to terminate this Agreement by written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice at any time until cure oc
curs, and be relieved of any further obligation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder and, whether or not th
at Party terminates this Agreement, to recover
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the defaulting Party all am
ounts due hereunder, plus all other damages and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedies to which it is entitled
at law or in equity. The provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section will survive termination
of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.7 Intrastate Operation. The op
eration of the Plant by Generator shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause there to be a synchronous
or an asynchronous interconnection between ERCOT

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any other transmission facil
ities operated outside of ERCOT unless ordered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Federal Energy Regulatory
Commission under Section 210 of the Federal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Power Act. The Parties recognize
and agree that any such interconnection will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute an adverse condition
giving the TSP the right to immediately
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disconnect the TIF from the GIF,
until such interconnection has been
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disconnected. The Generator will
not be prohibited by this Section from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interconnecting the Plant with f
acilities operated by the Comision Federal de
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electricidad of Mexico, unless s
uch interconnection would cause ERCOT utilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that are not "public utilities"
under the Federal Power Act to become subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the plenary jurisdiction of the
Federal Energy Regulatory Commission.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.8 No Third Party Beneficiaries
. This Agreement is not intended to and does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql create rights, remedies, or bene
fits of any character whatsoever in favor of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons, corporations, associati
ons, or entities other than the Parties, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations herein assumed are s
olely for the use and benefit of the Parties,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their successors in interest and
, where permitted, their assigns.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.9 No Waiver. The failure of a
Party to this Agreement to insist, on any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occasion, upon strict performanc
e of any provision of this Agreement will not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql considered a waiver of obligatio
ns, rights, or duties imposed upon the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination or Default of this A
greement for any reason by the Generator shall
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not constitute a waiver of the G
enerator's legal rights to obtain an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interconnection from the TSP und
er a new interconnection agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.10 Headings. The descriptive h
eadings of the various articles and sections of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement have been inserte
d for convenience of reference only and are of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no significance in the interpret
ation or construction of this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.11 Multiple Counterparts. This
Agreement may be executed in two or more

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterparts, each of which is d
eemed an original but all constitute one and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same instrument.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.12 Amendment. This Agreement m
ay be amended only upon mutual agreement of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parties, which amendment will no
t be effective until reduced to writing and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.13 No Partnership. This Agreem
ent shall not be interpreted or construed to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql create an association, joint ven
ture, agency relationship, or partnership
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the Parties or to impose
any partnership obligation or liability upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either Party. Neither Party shal
l have any right, power or authority to enter
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into any agreement or undertakin
g for, or act on behalf of, or to act as or be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an agent or representative of, o
r to otherwise bind, the other Party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.14 Further Assurances. The Par
ties agree to (i) furnish upon request to each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other such further information,
(ii) execute and deliver to each other such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other documents, and (iii) do su
ch other acts and things, all as the other Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may reasonably request for the p
urpose of carrying out the intent of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and the documents refe
rred to in this Agreement. Without limiting the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generality of the foregoing, the
TSP shall, at the Generator's expense, when
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably requested to do so by
the Generator at any time after the execution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement, prepare and p
rovide such information in connection with this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement (including, if availab
le, resolutions, certificates, opinions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel or other documents relat
ing to the TSP's corporate authorization to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enter into this Agreement and to
undertake the obligations set out herein) as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be reasonably required by an
y potential lender to the Generator under a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed loan agreement. The TSP
will use commercially reasonable efforts to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtain any opinion of counsel re
asonably requested by Generator, but the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be in Default of any o
bligation under this Agreement if the TSP is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unable to provide an opinion of
counsel that will satisfy any potential lender
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Generator. Specifically,
upon the written request of one Party, the other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party shall provide the requesti
ng Party with a letter stating whether or not,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql up to the date of the letter, th
at Party is satisfied with the performance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the requesting Party under this
Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.15 Indemnification and Liabili
ty. The indemnification and liability provisions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the PUCT Rule 25.202(b)(2) or
its successor shall govern this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.16 Consequential Damages. IN N
O EVENT SHALL EITHER PARTY BE LIABLE UNDER ANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROVISION OF THIS AGREEMENT FOR
ANY LOSSES, DAMAGES, COSTS OR EXPENSES FOR ANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIAL, INDIRECT, INCIDENTAL, C
ONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING BUT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOT LIMITED TO LOSS OF PROFIT OR
REVENUE, LOSS OF THE USE OF EQUIPMENT, COST OF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CAPITAL, COST OF TEMPORARY EQUIP
MENT OR SERVICES, WHETHER BASED IN WHOLE OR IN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PART IN CONTRACT, IN TORT, INCLU
DING NEGLIGENCE, STRICT LIABILITY, OR ANY OTHER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THEORY OF LIABILITY; PROVIDED, H
OWEVER, THAT DAMAGES FOR WHICH A PARTY MAY BE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIABLE TO THE OTHER PARTY UNDER
ANOTHER AGREEMENT WILL NOT BE CONSIDERED TO BE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIAL, INDIRECT, INCIDENTAL, O
R CONSEQUENTIAL DAMAGES HEREUNDER.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.17 Assignment. This Agreement
may be assigned by either Party only with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written consent of the other; pr
ovided that either Party may assign this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement without the consent of
the other Party to any affiliate of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigning Party with an equal or
greater credit rating and with the legal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority and operational abilit
y to satisfy the obligations of the assigning
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party under this Agreement. Any
attempted assignment that violates this Section
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is void and ineffective. Any ass
ignment under this Agreement shall not relieve a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party of its obligations, nor sh
all a Party's obligations be enlarged, in whole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in part, by reason thereof. W
here required, consent to assignment will not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unreasonably withheld, condition
ed, or delayed.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.18 Severability. If any provis
ion in this Agreement is finally determined to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be invalid, void, or unenforceab
le by any court having jurisdiction, such
te, void, or make unenforceable any other
of this Agreement.
\page
will comply with all applicable comparability
and regulations, as amended from time to time.
ss the Parties otherwise agree, invoicing and
nder this Agreement shall be governed by PUCT
Authority. Invoices shall be rendered to the
ified on, and payments shall be made in
of, Exhibit "C".
ection 8.21.B, any information that a Party
e, commercial or financial information under
formation") shall not be disclosed by the other
or retained by the other Party, except to the
d by law; (ii) reasonably deemed by the
to be disclosed in connection with a dispute
the defense of litigation or dispute; (iii)
f the other Party, such consent not to be
ecessary to fulfill its obligations under this
ervice provider including disclosing the
T. The Party asserting confidentiality shall
g of the information it claims is confidential.
other Party's Confidential Information under
party or Governmental Authority makes any
information described in this subsection, the
determination shall not invalida

provision, agreement or covenant
20
8.19 Comparability. The Parties

and code of conduct laws, rules,
8.20 Invoicing and Payment. Unle
payment rights and obligations u
Rules or applicable Governmental
paying Party at the address spec
accordance with the requirements
8.21 Confidentiality.
A. Subject to the exception in S
claims is competitively sensitiv
this Agreement ("Confidential In
Party to any person not employed
extent disclosure is (i) require
disclosing Party to be required
between or among the Parties, or
otherwise permitted by consent o
unreasonably withheld; or (iv) n
Agreement or as a transmission s
Confidential Information to ERCO
notify the other Party in writin
Prior to any disclosures of the
this subsection, or if any third
request or demand for any of the
disclosing Party agrees to promp
tly notify the other Party in writing and agrees

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to assert confidentiality and co
operate with the other Party in seeking to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql protect the Confidential Informa
tion from public disclosure by confidentiality
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement, protective order or o
ther reasonable measures.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. This provision shall not appl
y to any information that was or is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter in the public domain (
except as a result of a breach of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision).
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT "B"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SYSTEM PROTECTION REQUIREMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System Protection Equipment shal
l consist of such control and protective
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql devices installed, tested, and m
aintained by the Parties in accordance with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable ERCOT Requirements, N
ERC standards, and regulations of a Governmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authority, including but not lim
ited to, protective relaying systems and circuit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breakers, as are necessary to pr
otect personnel and equipment and to minimize
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deleterious effects to the GIF,
the TSP System, and other entities connected to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The TSP shall determine any chan
ges to requirements for protection of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Point of Interconnection and the
zone of protection around the Point of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interconnection and shall specif
y and implement the System Protection Equipment
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to meet such requireme
nts. The Generator shall have the right to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review and comment on the necess
ary protection requirements and the TSP shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consider the Generator's comment
s when determining such requirements. Upon the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP's determination of such requ
irements, the Generator shall, at its expense,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide corrections or additions
to its System Protection Equipment in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with such determinati
on. Prior to the Generator modifying any System
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Protection Equipment involving t
he Point of Interconnection, the Generator shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql submit the proposed changes to t
he TSP for review and approval. The TSP's review
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and approval shall be for the li
mited purpose of determining whether such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed changes are compatible

with the TSP System. The TSP shall coordinate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the relay system protection betw
een the GIF and the TSP System.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the GIF operate to facilitate
the interconnection of any of the Plant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities to the Southwest Powe
r Pool (or any other regional transmission
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql organization other than ERCOT),
the Generator will utilize open circuit breakers
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and air-break switches (which pr
ovide visible open indication) as a means of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql isolating such Plant facilities
from ERCOT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Generator will design, const
ruct, and operate its electrical facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such that all Plant auxiliary po
wer sources for each generating unit will come
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the same regional transmiss
ion organization as the generating unit's output
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is connected.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant specific system protection
requirements are set forth in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individual Facility Schedules wh
ere appropriate.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT "C"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTICE AND EFT INFORMATION OF TH
E GENERATION INTERCONNECTION AGREEMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) All notices of an operationa
l nature shall be in writing and/or may be sent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the Parties via electron
ic means including facsimile as follows:
der:
If to Generator:
TXU Generation Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Attn: Transmission Grid Shift Su
pervisor
Attn: Generation Controller
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 2233 B Mountain Creek Parkway

1717 N. Main St., Suite 19-181
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Operational/Confirmation Fax:
Operational/Confirmation Fax: (214) 875-9069
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 24 Hour Telephone: (214) 743-689
7
24 Hour Telephone: (214) 875-9779
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql E-mail: N/A
E-mail: psogen@txu.com
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (b) Notices of an administrative
nature:
der:
If to Generator:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Attn: Jeff Herring
Attn: Greg Karlik
1601 Bryan Street
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Dallas, Texas 75201-3411
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Fax: (214) 812-2788
Fax: (214) 812-8820
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Phone: 214-812-8613
Phone: (214) 812-8586
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql E-mail: jherring@txu.com
E-mail:
greg.karlik@txu.com
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (c) Notice for statement and bil
ling purposes:
der:
If to Generator:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Attn: Jeff Herring
Attn: Greg Karlik
1601 Bryan Street
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Dallas, Texas 75201-3411
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Phone: 214-812-8613
Phone: (214) 812-8586
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql E-mail: jherring@txu.com
E-mail: greg.karlik@txu.com
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql (d) Information concerning Elect
ronic Funds Transfers:
der:
If to Generator:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Bank Name: N/A
Bank Name: N/A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Address: N/A
Address: N/A
ABA No. N/A
For credit to: N/A
Account No. N/A
\page
S SPECIFIC TO
NERATOR-OWNED SUPPORT FACILITIES,
OF COMMON SWITCHYARDS
ship of facilities at points where
es interconnect with TSP-Owned Support
e with the provisions of this Section A, unless
ity Schedules.
ipment
Generator-Owned Support Facilities to the
and DC distribution circuit breaker panels
breakers) as well as all wiring and facilities
tor's AC and DC distribution circuit breaker
ied by the Generator to the TSP System, as
les. The TSP owns all wiring and facilities on
wned AC and DC distribution circuit breaker
TSP's wiring connects with the Generator-owned
ibed herein, as specified in the Facility
TSP-Owned Support Facilities to the
and DC distribution circuit breaker panels
ABA No. N/A

For credit to: N/A
Account No. N/A
24
EXHIBIT "D"
SUPPLEMENTAL TERMS AND CONDITION
TSP-OWNED SUPPORT FACILITIES, GE
TSP SUPPORT SERVICES, AND AREAS
A.
OWNERSHIP
1. Ownership and change of owner

Generator-Owned Support Faciliti
Facilities shall be in accordanc
otherwise specified in the Facil
2.
AC and DC Power Supply Equ
(i) AC and DC Power Supply from

TSP - The Generator owns the AC
(including all AC and DC circuit
on the source side of the Genera
panels for AC and DC power suppl
specified in the Facility Schedu
the load side of the Generator-o
panels up to the point where the
AC and DC circuit breakers descr
Schedules.
(ii) AC and DC Power Supply from
Generator - The TSP owns the AC
breakers) as well as all wiring and facilities
AC and DC distribution circuit breaker panels
the TSP to the Generator facilities, as
les. The Generator owns all wiring and
he TSP-owned AC and DC distribution circuit
here the Generator's wiring connects with the
kers described herein, as specified in the
ership changes where one Party's wires
nel owned by the other Party or where one
ntrol/relaying panel owned by the other Party.
therwise specified in a Facility Schedule,
espect to Annunciator Panels:
or panels located within the confines of
The TSP owns the wiring connecting
ls to the TSP System.
nels located within the confines of the
The Generator owns the wiring connecting
Generator-owned equipment.
U")
ween a Generator-owned RTU and the TSP
from the TSP System to the point where it
RTU.
\page
tween a TSP-owned RTU and Generator-owned
(including all AC and DC circuit

on the source side of the TSP's
for AC and DC power supplied by
specified in the Facility Schedu
facilities on the load side of t
breaker panels up to the point w
TSP-owned AC and DC circuit brea
Facility Schedules.
3. Control/Relaying Panels - Own
connect to a control/relaying pa
Party's equipment mounts on a co
4. Annunciator Panels - Unless o
the following will govern with r
(i) The Generator owns annunciat
the Plant control room/building.
Generator-owned annunciator pane
(ii) The TSP owns annunciator pa
Common Switchyard control house.
TSP-owned annunciator panels to
5.
Remote Terminal Units ("RT
(i) For all connections made bet

System, the TSP owns the wiring
connects to the Generator-owned
25
(ii) For all connections made be

he TSP-owned RTU.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. ERCOT Polled Settlement Meter
ing Equipment ("EPS Metering Equipment") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The TSP owns all EPS Metering Eq
uipment, unless otherwise specified in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facility Schedules. The Generato
r owns any wiring connecting Generator-owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment to the EPS Metering Eq
uipment.
Digital Fault Recorders ("
DFR")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) For all connections made bet
ween a Generator-owned DFR and TSP System,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP owns the wiring from the
TSP System to the point where it connects to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator-owned DFR.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) For all connections made be
tween a TSP-owned DFR and Generator-owned
he TSP-owned DFR.
COMMON SWITCHYARDS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Grounds - The TSP will mainta
in all Common Switchyard grounds in neat
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition, including gravel, and
pest and weed control.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Grounding Grid - The integrit
y of all connections to the ground grid
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from all Generator-owned equipme
nt located in Common Switchyards will be the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibility of the Generator.
If the Generator proposes to make grounding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql design changes or additions, the
Generator shall provide written documentation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and design drawings to the TSP f
or approval. The TSP shall review the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's documentation and (i
) approve the proposed changes or (ii) provide
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comments to the Generator on suc
h changes within thirty (30) days of receipt.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For work activities in Common Sw
itchyards that will require digging in areas in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the ground grid exists and
which is utilized by both Parties, the Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsible for the work activit
y will be responsible for maintaining the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrity of the ground grid. Fo
r any major additions, the Party responsible for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the addition will ensure that th
e design requirements of the ground grid are

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql met.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Drawing Updates - Each Party
shall maintain up-to-date drawings of its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Common Switchyard facilities. Co
pies of such drawings shall be made available
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when requested by the other Part
y.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Breakers - The Generator shal
l notify the TSP in advance of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql testing, maintenance, or repair
of Common Switchyard breakers and will allow the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP to be present during such ev
ent. If possible, such advance notice shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at least five (5) days in advanc
e of any testing, maintenance, or repair. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator shall document all tes
ting, maintenance, and repair and provide the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP a copy of such documentation
within a reasonable period of time after such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event.
TSP-OWNED SUPPORT FACILITI
ES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The TSP's Rights of Access an
d Use - Subject to, but to the fullest
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent permitted under the appli
cable easements, the TSP shall have the right,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through its authorized agents an
d employees, to enter into areas of the Plant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the GIF, for purposes of ope
rating, maintaining, repairing, modifying,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacing, removing, inspecting,
or obtaining measurements or recordings from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP-Owned Support Facilities
. The Parties acknowledge and agree that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights include the use of ancill
ary facilities and resources, including
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable use of parking space,
bathrooms, and water, as may be necessary or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desirable in furtherance of the
TSP's authorized use of the TSP-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Notification of TSP Access an
d Use - Prior to TSP personnel, or its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contractors, entering a Plant, a
Plant control room, or a Common Switchyard,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such personnel shall verbally co
mmunicate to the Plant control room personnel
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) their intent to enter the Pl
ant, Plant Control Room, or Common Switchyard,

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (ii) the scope of activities
they plan to perform in such Plant, Plant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control room, or Common Switchya
rd.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Non-Interference By the TSP In connection with the TSP's use of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP-Owned Support Facilities in
the manner described in subsection 1 above, (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP shall make reasonable effort
s to minimize interference with the Generator's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation of the Plant facilitie
s and the TSP shall not use the Plant facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or undertake any activities on o
r pertaining to or which may otherwise impact,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plant facilities, which may
materially impair, or otherwise interfere with,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator's use of the Plant
facilities, as more fully described in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection 1 above, and (ii) the
TSP shall not permit any third parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including its contractors or ag
ents) to use the Plant facilities, or undertake
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any activities on or pertaining
to the Plant facilities, without the prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent of the Generator. Except
to the limited extent expressly permitted in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement, the TSP shall no
t deny Generator personnel, or its contractors,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql access to the Plant facilities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Non-Interference by the Gener
ator - The Generator shall not use the
undertake any activities on or pertaining to or
TSP-Owned Support Facilities, which may
interfere with, the TSP's use of the TSP-Owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Facilities, as more full
y described in subsection 1 above. The Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not permit any third parti
es (including its contractors or agents) to use
, or undertake any activities on or pertaining
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the TSP-Owned Support Facilit
ies, without the prior consent of the TSP.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except to the limited extent exp
ressly permitted in this Agreement, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator shall not deny TSP per
sonnel, or its contractors, access to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP-Owned Support Facilities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Costs and Expenses - The Gene
rator hereby agrees that the TSP shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be obligated to pay Generator an
y fees or charges, and Generator shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impose or attempt to seek paymen
t of any fees or charges, for or relating to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP's use of the TSP-Owned Suppo

rt Facilities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Construction Activities - App
roval of Construction Plan - The TSP may,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at any time and at its sole cost
and expense, prepare a construction plan
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql describing and addressing the pr
oposed alteration, removal, or relocation of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP-Owned Support Facilities (he
reinafter "Construction Plan"). Unless different
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timeframes are agreed to between
the TSP and the Generator, the TSP shall submit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Construction Plan to Generat
or at least sixty (60) days prior to the date on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the TSP proposes to commen
ce the construction activities described in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction Plan. Within thirty
(30) days following its receipt of that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction Plan, the Generator
shall either approve or disapprove, in writing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the proposed Construction Plan;
provided, however, that the Generator shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withhold its approval of the Con
struction Plan, unless the Generator reasonably
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determines that the Construction
Plan would, if implemented in the specific
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner proposed, substantially i
mpair or interfere with the Generator's use of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plant and/or GIF, for purpos
es of generating electricity, and proposes a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercially reasonable alternat
ive construction plan.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Construction and Relocation A
ctivities - Performance of Work - Upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the Construction Pla
n, as provided for in subsection 6 above, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP shall proceed to perform the
construction activities and related work
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (hereinafter "Work") described o
r provided for in such Construction Plan. All
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Work will be performed at the TS
P's sole cost and expense. The TSP may, in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion, use third party cont
ractors and subcontractors to perform all or
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part of the Work. The Work shall
be performed and completed in substantial
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with the approved Con
struction Plan pertaining to that Work. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, the TSP will, in perfo
rming such Work, substantially comply with such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql work site practices or procedure
s as the Generator may propose and provide to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP, provided that such prac

tices and procedures are no more stringent than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those commonly imposed, consiste
nt with established construction industry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standards on contractors perform
ing similar types of construction activities and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql work. The Generator shall reason
ably cooperate with and support the TSP in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completion of Work, in accordanc
e with subsection 4 above. Subject to and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contingent upon obtaining such c
ooperation from the Generator, the TSP shall use
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable efforts to complete t
he Work in accordance with any construction
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedule or milestone dates, des
ignated as part of, or in connection with, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved Construction Plan, for
or pertaining to the Work.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Identification of Certain Spe
cified Facilities - The TSP may, upon
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable notice to the Generat
or, and in a manner reasonably acceptable to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator, mark or label certain
of the TSP-Owned Support Facilities. Such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql marking efforts may include, wit
hout limitation, painting such TSP-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities, or portions thereof,
a distinctive color.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D.
TSP SUPPORT SERVICES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Provision and Cost - During t
he term of this Agreement, the Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall, at no cost to the TSP, pr
ovide the following TSP Support Services:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) The Generator will, upon req
uest of the TSP, operate TIF breakers via
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control handles located in the P
lant control room, to the extent on-site,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adequately trained, Generator pe
rsonnel are available.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) The Generator will use reas
onable efforts to observe all TSP-Owned
-Owned Support Facilities in the control room
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that provide indication, status,
or alarms regarding TIF facilities and will use
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable efforts to notify the
TSP, as soon as reasonably possible, of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql abnormal condition of any TIF de
tected by such an observation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) The Generator will notify
the TSP, as soon as reasonably possible,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any abnormal condition of any
TIF or any abnormal situation affecting any TIF
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it detects during its norm
al patrol of the GIF in the Common Switchyard or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it otherwise becomes aware
of.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Default - If, after giving th
e requisite advance written notice, but
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the effective date of t
ermination of the Agreement or a Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule (as the case may be), t
he Generator fails to perform its obligation to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide TSP Support Services, in
addition to, and notwithstanding any contrary
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions in Section 8.6 of Exh
ibit A, the TSP shall have the right to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately perform the TSP Supp
ort Services, as necessary, without any prior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notification to the Gene
rator.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Termination / Addition of TSP
Support Services - The TSP may terminate,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in whole or in part, any TSP Sup
port Services at any time by providing written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice of such termination to th
e Generator. The notice of termination will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specify the effective date of an
y such termination, and the TSP Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service(s) or any part thereof t
o be terminated. New TSP Support Services may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql added to this Agreement by mutua
l agreement of the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E.
GENERATOR-OWNED SUPPORT FA
CILITIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Provision - The Generator wil
l furnish electricity to the TSP at no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cost for use by the TSP as speci
fied in the Facility Schedules, in connection
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with its activities on the land
or within those facilities included within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql easements executed between the T
SP and the Generator in connection with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plants. The Parties further ackn
owledge and agree that: (i) such electricity
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be furnished to the TSP sol
ely in its capacity as a tenant of the Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as an incident of tenancy; and (
ii) the TSP will not knowingly permit such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electricity to be resold to or u
sed by others.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Default - Notwithstanding any
contrary provisions in Section 8.6 of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A, if the Generator fail

s to maintain the Generator-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities in proper working ord
er so as to create a serious threat to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reliability of the TSP System, T
SP shall have the right to take any action the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP reasonably deems necessary t
o restore the reliability of the TSP System,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including, but not limited to, r
epair or replacement of the Generator-Owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Facilities. The TSP shal
l be responsible for all costs incurred by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP in connection with the TSP's
actions under this Section.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Modification - The Generator
will notify the TSP immediately in writing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if the Generator obtains informa
tion that gives it good cause to believe that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any provision of Section E of Ex
hibit "D" will materially adversely affect the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's (i) ability to retai
n its Exempt Wholesale Generator status; or (ii)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with any Texas or fed
eral statutory or regulatory requirements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governing the Generator. The Gen
erator's notice will include a detailed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql explanation of the reasons for t
he Generator's concerns. The Parties agree to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql take such actions as may reasona
bly be required of each of them to avoid such a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result, while at the same time r
etaining for each Party to the fullest extent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possible, the benefits of its ri
ghts under this Agreement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F.
CONDEMNATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Should any portions of the Gener
ator's real property that include any
/or Generator-Owned Support Facilities be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriated or acquired by any
governmental agency or other party having the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power of eminent domain for publ
ic purpose or use, then those TSP-Owned Support
d Support Facilities not condemned,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriated, or acquired by suc
h agency or other party shall, at the TSP's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option, be removed from the cond
emned or appropriated portion of the Plant and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GIF, at the TSP's cost, unless t
he TSP negotiates a separate arrangement with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the appropriate agency or other
party. The Generator shall not interfere with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP's right to negotiate wit
h the condemning authority or government agency
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other party. Further, to the
extent that all or any portion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's real property that c

ontain any TSP-Owned Support Facilities and/or
es become the subject of a condemnation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding, the Parties shall, a
t the TSP's request, pursue their best efforts
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to sever the TSP's interest in t
he TSP-Owned Support Facilities and
es, and to have any condemnation awards
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically allocated between t
he respective rights and interest of the TSP and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Generator. The Generator sha
ll immediately notify the TSP of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condemnation action or proceedin
g which may be filed pertaining to the Plant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or GIF. The Generator shall
also notify the TSP of any such threatened
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condemnation and agrees not to s
ell the Plant or GIF, or any portions thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such acquiring agency or othe
r party, in lieu of condemnation, without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing written notice to the
TSP, at least ninety (90) days prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed sale.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G.
ABANDONMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Notice - In the event the Gen
erator proposes to abandon all or a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of any of the Plant and/
or GIF containing any TSP-Owned Support
d Support Facilities, the Generator shall give
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP prior written notice, at
least ninety (90) days before such proposed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql abandonment, and provide the TSP
an opportunity to purchase such abandoned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities or portions thereof (
subject to any applicable statutory or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory priorities) upon or w
ithin which such TSP-Owned Support Facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Generator-Owned Support F
acilities are located, such purchase to be at
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and for a price and upon terms a
s may be then agreed to between the Parties,
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, neither such
notice nor such abandonment will relieve
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator of its obligations und
er this Agreement should TSP elect not to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase such facilities. The TS
P shall have a period of thirty (30) days from
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of delivery of such not
ice within which to notify the Generator that it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intends to negotiate with the Ge

nerator in respect of its rights to purchase
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such portions of the Plant and/o
r GIF. In the event that the TSP gives such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice, the Parties shall prompt
ly proceed to negotiate in good faith with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to TSP's prospective pur
chase of such portions of the Plant and/or GIF.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Generator shall not proceed
with or consummate its proposed abandonment for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a period of sixty (60) days from
its receipt of that notice, unless the TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gives the Generator written noti
ce indicating that the TSP no longer wishes to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negotiate for the purpose of pur
chasing such portions of the Plant and/or GIF.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Rights of the TSP - In the ev
ent of any sale of all or a portion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant and/or GIF to another enti
ty, such sale shall be subject to the rights of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP under this Agreement, wi
th regard to access to and use of the TSP-Owned
-Owned Support Facilities. Any deed or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument of conveyance pertain
ing to TSP-Owned Support Facilities and/or
es from the Generator to another purchasing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entity must reference the TSP's
rights under this Agreement, and its related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights pursuant to the applicabl
e easement agreements, and clearly indicate that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the TSP's easement rights, as pr
ovided for in the applicable easement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements, run with the transfe
rred portion of the Plant and/or GIF, and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related improvements or real pro
perty.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H.
LIENS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Discharge and Release - In th
e event that any portion of the TSP-Owned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Facilities and/or Genera
tor-Owned Support Facilities becomes subject to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any mechanics', artisans' or mat
erialmen's lien, or other encumbrance chargeable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to or through the Generator, the
Generator shall promptly cause such lien or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encumbrance to be discharged and
released of record, without cost to the TSP,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall indemnify the TSP agai
nst all costs and expenses (including reasonable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorney's fees) reasonably incu
rred in discharging and releasing such lien or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encumbrance; provided, that if a
ny such lien or encumbrance is not so discharged
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and released after prior written
notice by the TSP to the Generator, and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator fails to reasonably ob

tain such release or discharge, then the TSP may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay for or secure the release or
discharge thereof at the expense of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Exclusion of TSP Support Faci
lities - In the event the Generator grants
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a lien on the Plant and/or GIF,
the Generator agrees that such lien shall not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include the TSP-Owned Support Fa
cilities or Generator-Owned Support Facilities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or, in the event that any mortga
ge granted by the Generator must grant a lien on
and/or Generator-Owned Support Facilities under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law in order to grant a lien on
the Plant and/or GIF, the Generator agrees that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to execution of any such m
ortgage the Generator shall cause the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator's mortgagee(s) to exec
ute and deliver an agreement with the TSP to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reconvey the TSP-Owned Support F
acilities to the TSP and to subordinate its lien
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or encumbrance on the TSP-Owned
Support Facilities and Generator-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities to the rights of the
TSP. All rights of the TSP to use the TSP-Owned
-Owned Support Facilities as described in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement shall be senior to any
lien or encumbrance created by the Generator.
DISCONTINUED USE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The TSP may upon reasonable noti
ce to the Generator, and in the TSP's sole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion, discontinue the TSP'
s use of any designated TSP-Owned Support
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facilities or Generator-Owned Su
pport Facilities. Upon giving such notice, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP shall reasonably cooperate w
ith the Generator for purposes of implementing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any measures that may be necessa
ry to prevent the discontinued use of such
Generator-Owned Support Facilities from becoming
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a safety hazard to the Generator
's personnel working at the Plant and GIF. In
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event the TSP desires to ins
tall its own facilities to deliver AC or DC
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power to the TSP Support Facilit
ies, which previously derived AC or DC power
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from Generator-Owned Support Fac
ilities, the Generator will allow the TSP to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql install such facilities in accor
dance with the easement agreements referenced in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5.2 of "Exhibit A" of th
is Agreement. The TSP shall have no other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation with respect to the d
iscontinued use of such facilities, including,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation, as pertains
to their maintenance, repair, appearance,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql removal, or alteration.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql J.
LABOR AGREEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The TSP and the Generator shall
cooperate and coordinate their activities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in an effort to ensure that acti
vities performed by either of the Parties
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Exhibit "D" do
not conflict with, and are not inconsistent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with, the duties and obligations
of the Generator under the Generator's present
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or future labor agreements. In t
he event, however, that any such activities are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alleged or found to constitute a
breach of such labor agreements, the TSP shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be liable for any such breac
h.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql K.
ENVIRONMENTAL ISSUES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to those activities
, which are to take place within a Plant,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Plant control room, or a Commo
n Switchyard, the Party performing the work or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise managing the asset or
operations therein shall be responsible for (i)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ensuring that its activities are
performed in compliance with all applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql environmental regulations, (ii)
remediating any spills or environmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contamination or concerns result
ing from or occurring in connection with its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql activities as required by and in
accordance with applicable regulations, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) removing and properly disp
osing of all waste materials. The Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performing the work or other act
ivities shall, prior to commencement thereof,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communicate to the other Party t
he job scope and needs so that both Parties are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fully aware of their respective
environmental responsibilities. In the event of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a spill or the discovery of envi
ronmental contamination that potentially may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impact the other Party's propert
y or operations, both Parties shall work
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together to establish a coordina
ted plan of action for responding to the spill
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or contamination.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql L.
INCIDENT REPORTING AND INV
ESTIGATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If one Party becomes aware of th
e occurrence of an incident in a Plant, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant control room, or a Common
Switchyard that affects or is capable of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affecting the TSP System, GIF, o
r Plant reliability, safety, environmental
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance, or equipment failure
, such Party shall promptly report the incident
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the other Party. This will be
a brief but informative report that includes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql background, description of the i
ncident, conclusion, corrective action, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person(s) responsible for correc
tive action. If the seriousness of the incident
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warrants, both Parties shall par
ticipate in a joint investigation and produce a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formal report of the incident. B
oth Parties shall have the right to declare the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incident serious enough to warra
nt a joint investigation.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql M.
SAFETY PROCEDURES AND POLI
CIES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Interlock Defeated or Tempora
ry Changes to Equipment - Prior to either
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party making any temporary chang
es to the TIF, GIF or Plant equipment, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bypassing or defeating of contro
ls, trip, alarms or other interlock devices
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql associated with the TIF or GIF,
the Party making such changes shall inform the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Party of the changes that
may affect the operation of the other Party.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This includes software interlock
s such as those found in programmable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql controllers (PLC), computers or
other programmable devices, as well as hard
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wired or mechanical interlocks.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Job Briefings - OSHA regulati
ons require job briefings (tailboard
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conferences) to be conducted whe
n more than one employee is to be involved in a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql job. The job plan must be commun
icated to all affected personnel. The briefing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may include at least one Generat
or representative and shall cover such topics as
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hazards associated with the job,
work procedures involved, special precautions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql energy source controls and/or is
olation and personal protective equipment. The

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSP will contact the Plant produ
ction supervisor to make arrangements for a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generator employee to be briefed
during the tailboard conference.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Safety - It is understood tha
t, while employees or contractors of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either the TSP or the Generator
are within a Common Switchyard, the safety
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql policies, procedures and practic
es adopted by each Party individually will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adhered to by all personnel. Eac
h Party shall provide the other Party copies of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its safety policies, procedures,
and practices and shall provide the other Party
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any revisions in a timely manner
. All involved parties will be made familiar
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with specific safety policies fo
r their area of work. While employees or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contractors of TSP are within th
e control room, or any other portion of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generating plant structure, they
will abide by the following safety provisions:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) TSP agrees that any safety-r
elated assistance or initiatives
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undertaken by Generator will not
relieve TSP from responsibility for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql implementation of, and complianc
e with, safe working practices, as developed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from their own experience, or as
imposed by law or regulation, and will not in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any way, affect the responsibili
ties resting with TSP under the provisions of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and to meet all s
afety requirements as specified by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Occupational Safety & Health Adm
inistration (OSHA) and any other applicable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql state or federal safety and heal
th laws or regulations.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) In the event that a materia
l safety data sheet (hereinafter "MSDS"),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warning label, or other document
ation concerning the use of hazardous chemicals
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the work site, applies to any
materials or equipment utilized by TSP as an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aspect of the work, such documen
tation will be provided by TSP to Generator
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the commencement of any
such work.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) TSP will provide informati
on to Generator regarding hazardous
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql chemicals and/or consumable prod
ucts that contain constituents listed in 40 CFR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql '372.65 used at Generator work s
ite. TSP will report the amount of such material
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql carried on and off the site, the
amount actually used and the manner of use.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) TSP will provide for the du
ration of this Agreement, at its sole
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense, adequate first-aid faci
lities for employees of TSP and its contractors.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) TSP acknowledges and agrees
that all employees of TSP and its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contractors performing work at t
he work site are required to view Generator's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Contractor/Visitor Safety Orien
tation" video, when applicable, and to read and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adhere to Generator's "Contracto
r/Visitor Safety Booklet" prior to performing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any work on the work Site.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vi) Appropriate protective equi
pment will be worn by employees of TSP and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its contractors while on the wor
k site. In addition, when any employee of TSP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and its contractors are performi
ng work which may expose that person to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql potential hazards, TSP acknowled
ges and agrees that such person will wear
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate clothing specific to
and adequate for that exposure.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vii) TSP will take all reasonab
le precautions to prevent any accident in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the performance
of work, including, but not limited to, putting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql up and maintaining sufficient ba
rriers and lights, if appropriate.
\page{\*\bkmkstart doc_1_19}{\*\bkmkend doc_1_19}
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10(e)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMENDMENT NO. 1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO GENERATION INTERCONNECTION AG
REEMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Amendment No. 1 ("Amendment
") to the Generation Interconnection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement dated as of December 1
4, 2001 ("Agreement") by and between Oncor
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electric Delivery Company, a Tex
as corporation, formerly known as TXU Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delivery Company, ("Transmission
Service Provider") and TXU Generation Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LP, a Texas limited partnership,
for itself and as agent for TXU Big Brown
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company LP, TXU Mountain Creek C
ompany LP, TXU Handley Company LP, TXU
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tradinghouse Company LP, and TXU
DeCordova Company LP, each a Texas limited
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql partnership (collectively the "G
enerator") (both parties hereinafter

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collectively referred to as "Par
ties") is made and entered into this 31st day of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql May, 2002 and is effective as of
the same date except as otherwise expressly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided for herein.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In consideration of the mutual c
ovenants and agreements herein
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained, the Parties hereto ag
ree as follows:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Handley and Mountain Cr
eek Points of Interconnection are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminated and Facility Schedule
No. 20 - Handley to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and Facility Schedule
No. 21 - Mountain Creek to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement are deleted, effective
as of April 25, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Sweetwater Generating P
lant Point of Interconnection and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corresponding Facility Schedule
No. 22 - Sweetwater Generating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant attached hereto, are hereb
y added to the Agreement
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective upon execution of this
Amendment by the Parties.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. The TABLE OF CONTENTS to th
e Agreement is hereby deleted in its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entirety and replaced with the r
evised TABLE OF CONTENTS, which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is attached hereto, in order to
delete the Handley and Mountain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Creek Facility Schedules and to
add the Sweetwater Generating
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plant Facility Schedule.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Facility Schedule No. 4 - E
agle Mountain is deleted in its
evised Facility Schedule No. 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eagle Mountain attached hereto,
in order to correctly designate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ownership of the RTU described i
n Facility Schedule. No. 4,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7 and Section 8, effecti
ve as of January 1, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Facility Schedule No. 17 Tradinghouse is deleted in its
evised Facility Schedule No. 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tradinghouse attached hereto, in
order to correctly designate
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ownership of the RTU described i
n Facility Schedule No. 17,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7, effective as of Janua
ry 1, 2002.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise expressly pr
ovided for herein, the Agreement will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain in effect in accordance w
ith its terms.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the Parties
have caused this Amendment to be signed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by their respective duly authori
zed representatives in two counterparts, each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which shall be deemed an origina
l but all shall constitute one and the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BY: /s/Jeffery B. Herring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Jeffery B. Herring
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmission Services Manager
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU GENERATION COMPANY LP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR ITSELF AND AS AGENT FOR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU BIG BROWN COMPANY LP,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU MOUNTAIN CREEK COMPANY LP,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU HANDLEY COMPANY LP,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TXU TRADINGHOUSE COMPANY LP, AND
COMPANY LLC
-\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql
TXU DECORDOVA COMPANY LP

BY:
TXU GENERATION MANAGEMENT
ITS GENERAL PARTNER

BY: /s/Steve Kopenitz
-------------------------------Steve Kopenitz
Director - Gas Plant Operations

d\plain\cf1\f50\fs16\ql Exhibit 10(f)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TARIFF FOR RETAIL DELIVERY SERVI
CE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql APPENDIX A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Applicable: Entire Certified Se
rvice Area
Page 1 of 3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective Date: January 1, 2002
Revision: Original
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================
===============================================
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql APPENDIX A: AGREEMENT BETWEEN CO
MPANY AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMPETITIVE RETAILER REGARDING T
ERMS AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITIONS OF DELIVERY OF ELECTR
IC POWER AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ENERGY(DELIVERY SERVICE AGREEMEN
T)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and Competitive Retailer
hereby agree that their relationship regarding
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the delivery of Electric Power a
nd Energy will be governed by the terms and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions set forth in Company'
s Tariff approved by the Public Utility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commission of Texas (Commission)
. A copy of this Tariff may be obtained by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contacting the Central Records D
epartment of the Commission.
Notices, bills, or payme
nts required in Company's Tariff shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered to the following addre
sses:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR COMPANY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legal Name:
Oncor Electric Delivery Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mailing Address:
301 S. Harwood St., Ste. 7 South
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Phone Number:
1-888-313-6934 (For CR Business
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Support Use Only)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Phone Number:
1-888-313-6862 (For Service
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requests)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fax Number:
214-875-2953
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Email Address:
contactcenter@oncorgroup.com
Mellon Bank
information through written notice to
and postal): _________________________
_______________________________________
contact information through written
CE
rvice Area
Page 2of 3
Revision: Original
===============================================
NTACT FOR REPORTING OF OUTAGES, INTERRUPTIONS,
e beside the option selected.
ES ARE DISCUSSED IN PRO-FORMA
direct Retail Customers to call
utages, interruptions, and
Payment Address
(both electronic and postal):
Pittsburg PA
ABA #: 043000261
Account #: 0014541
(Electronic Remittance Only)
Company may change such contact
Competitive Retailer.
FOR COMPETITIVE RETAILER
Legal Name:
Mailing Address:
Phone Number:
Fax Number:
Email Address:
Billing Address (both electronic
_________________________
PUC Certificate Number: ________
Competitive Retailer may change
notice to Company.
TARIFF FOR RETAIL DELIVERY SERVI
APPENDIX A
Applicable: Entire Certified Se
Effective Date: January 1, 2002
================================
II.
A.
DESIGNATION OF CO
AND IRREGULARITIES
*Please place a check on the lin
THESE OPTIONS AND ATTENDANT DUTI
TARIFF SECTION 4.11.1.
___
Competitive Retailer will
Competitive Retailer to report o
ctronically forward such
utages, interruptions, and
ward such calls to Company at the
direct Retail Customers to directly
t outages, interruptions, and
iler will provide Retail Customer
ied toll-free number for purposes
R MAKING SERVICE REQUESTS
e beside the option selected.
ES ARE DISCUSSED IN PRO-FORMA
vice requests and will then
rmation to Company.
vice requests and will then
the following toll-free number:
direct Retail Customers to directly
service requests. Competitive
tomer with the following Company
rposes of making such requests.
irregularities and will then ele

information to Company.
___
Competitive Retailer to report o

irregularities and will then for
following toll-free number:
1-888-313-4747
___
call or contact Company to repor

irregularities. Competitive Reta
with the following Company suppl
of such reporting:
1-888-313-4747
B.
DESIGNATION OF CONTACT FO
*Please place a check on the lin

THESE OPTIONS AND ATTENDANT DUTI
TARIFF SECTION 4.11.1.
___
Competitive Retailer to make ser

electronically forward such info
___
Competitive Retailer to make ser

forward such calls to Company at
1-888-313-6862
___
call or contact Company to make

Retailer will provide Retail Cus
supplied toll-free number for pu
CE
rvice Area
Page 3 of 3
Revision: Original
===============================================
on the date of execution by both Parties
terminate upon mutual agreement of the
he date (a) Competitive Retailer informs
operating as a Competitive Retailer in
a new Delivery Service Agreement
es effective; or (c) Competitive
by the Commission as a retail electric
ed service area.
or any reason, shall not relieve Company
bligation accrued or accruing prior to
ecuted in two or more counterparts, each of
all constitute one and the same
or Electric Delivery Company
___________________________________
___________________________________
1-888-313-6862
TARIFF FOR RETAIL DELIVERY SERVI

APPENDIX A
Applicable: Entire Certified Se
Effective Date: January 1, 2002
================================
III.
TERM
This Agreement shall commence up

(the "Effective Date") and shall
Parties or upon the earlier of t
the Company that it is no longer
Company's service territory; (b)
between the Parties hereto becom
Retailer is no longer certified
provider in Company's certificat
Termination of this Agreement, f
or Competitive Retailer of any o
such termination.
IV.
This Agreement may be ex
which is deemed an original but

instrument.
V.
SIGNATURES
COMPANY
(legal signature)
(date)
Onc
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMPETITIVE RETAILER (insert nam
e) ___________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (legal signature)
___________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (date)
___________________________________
d\plain\cf1\f50\fs16\ql Exhibit 12
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RATIO OF EARNINGS TO FIXED CHARG
ES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MILLIONS OF DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql TWELVE MONTHS ENDED DECEMBER 31,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 2001
2000
1999
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql EARNINGS:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Net income (loss)
228
226
22
3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Add: Total federal income taxes
(benefit)
119
120
10
6
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Fixed charges (see detail below)
280
270
28
6
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Preferred dividends of subsidiar
ies
0
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Total earnings
627
616
61
5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql =======
=======
=======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql FIXED CHARGES:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Interest expense
274
264
28
1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Rentals representative of the in
terest factor
6
6
5
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Distributions on preferred trust
securities of subsidiaries
0
0
ings
280
6
ies (pretax)
0
0
280
6
t (pretax)
0
0
dends
280
6
=======
ES
2.24
5
=======
XED
2.24
=======
\page
ES
(benefit)
63
ies
0
0
-------
-------
Fixed charges deducted from earn

270
28
Preferred dividends of subsidiar
0
-------
-------
Total fixed charges

270
28
Preferred dividends of registran

0
-------
-------
Fixed charges and preferred divi

270
28
=======
=======
RATIO OF EARNINGS TO FIXED CHARG

2.28
2.1
=======
=======
RATIO OF EARNINGS TO COMBINED FI

CHARGES AND PREFERRED DIVIDENDS
2.28
2.15
=======
=======

RATIO OF EARNINGS TO FIXED CHARG
MILLIONS OF DOLLARS
THREE MONTHS ENDED MARCH 31,
-----------------------------2002
2001
EARNINGS:
Net income (loss)
71
24
Add: Total federal income taxes
35
10
Fixed charges (see detail below)
74
Preferred dividends of subsidiar
0
-------------
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Total earnings

169\par\pard\plain\f0\fs16\par\pard\plain
\cf1\f50\fs14\ql 108
=======
62
73
terest factor
1
1
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Fixed charges deducted from earn
ings
63
74
ies (pretax)
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Total fixed charges
63
74
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Preferred dividends of registran
t (pretax)
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Fixed charges and preferred divi
dends
63
74
=======
ES
2.68
1.46
=======
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql RATIO OF EARNINGS TO COMBINED FI
XED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql CHARGES AND PREFERRED DIVIDENDS
2.68
1.46
=======
\page
ES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MILLIONS OF DOLLARS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql THREE MONTHS ENDED JUNE 30,
SIX MONTHS ENDED JUNE 30,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql 2002
2001
2002
2001
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql EARNINGS:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Net income (loss)
65
40
136
64
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Add: Total federal income taxe
s (benefit)
33
19
68
29
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Fixed charges (see detail below)
66
72
129
146
ies
0
0
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ----------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total earnings
164
131
333
239
========
========
========
65
70
127
143
terest factor
1
2
2
3
0
0
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ----------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Fixed charges deducted from earn
ings
66
72
129
146
ies (pretax)
0
0
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ----------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Total fixed charges
66
72
129
146
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Preferred dividends of registran
t (pretax)
0
0
0
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql ----------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Fixed charges and preferred divi
dends
66
72
129
146
========
========
========
ES
2.48
1.82
2.58
1.64
========
========
========
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql RATIO OF EARNINGS TO COMBINED FI
XED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql CHARGES AND PREFERRED DIVIDENDS
2.48
1.82
2.58
1.64
========
========
========
d\plain\cf1\f50\fs16\ql EXHIBIT 23(a)

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDEPENDENT AUDITORS' CONSENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We consent to the use in this Re
gistration Statement of Oncor Electric Delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company on Form S-4 of our repor
t dated April 15, 2002 appearing in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus, which is part of thi
s Registration Statement, and to the reference
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to us under the heading "Experts
" in this Prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ Deloitte & Touche LLP
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dallas, Texas
d\plain\cf1\f50\fs16\ql Exhibit 25
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSI
ON
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Washington, D.C. 20549
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM T-1
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATEMENT OF ELIGIBILITY UNDER T
HE TRUST
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDENTURE ACT OF 1939 OF A CORPO
RATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESIGNATED TO ACT AS TRUSTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CHECK IF AN APPLICATION TO DETER
MINE ELIGIBILITY OF A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRUSTEE PURSUANT TO SECTION 305(
b)(2) [ ]
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Exact name of trustee as specif
ied in its charter)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York
13-5160382
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Jurisdiction of incorporation
(I.R.S. Employer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if not a U.S. national bank)
Identification No.)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql One Wall Street, New York, New Y
ork
10286
offices)
(Zip code)
ied in its charter)
75-2967830
(I.R.S. Employer
)
Identification No.)
75201
offices)
(Zip code)
OTES DUE 2012
OTES DUE 2032
es)
\page
n as to the Trustee:
amining or supervising authority to which
2 Rector Street, New York, N.Y. 10006
and Albany, N.Y. 12203
33 Liberty Plaza, New York, N.Y. 10045
ation 550 17th Street, N.W., Washington, D.C.
ion
New York, N.Y. 10005
exercise corporate trust powers.
(Address of principal executive

----------------ONCOR ELECTRIC DELIVERY COMPANY
(Exact name of obligor as specif
Texas
(State or other jurisdiction
of incorporation or organization
500 N. Akard Street
Dallas, Texas
(Address of principal executive
----------------6.375% EXCHANGE SENIOR SECURED N
7.000% EXCHANGE SENIOR SECURED N
(Title of the indenture securiti
ITEM 1. GENERAL INFORMATION.*

Furnish the following informatio
(a) Name and address of each ex
it is subject.
Superintendent of Banks of the
State of New York
Federal Reserve Bank of New York
Federal Deposit Insurance Corpor
20429
New York Clearing House Associat
(b) Whether it is authorized to
Yes.
OR.
f the trustee, describe each such
es below, on file with the Commission, are
as an exhibit hereto, pursuant to Rule 7a-29
1939 (the "Act") and 17 C.F.R. 229.10(d).
tion Certificate of The Bank of New York
as now in effect, which contains
ss and a grant of powers to
(Exhibit 1 to Amendment No. 1 to
Statement No. 33-6215, Exhibits
Registration Statement No.
-1 filed with Registration
By-laws of the Trustee. (Exhibit 4 to Form
ement No. 33-31019.)
stee required by Section 321(b) of the Act.
h Registration Statement No.
eport of condition of the Trustee published
ements of its supervising or
B, the Trustee has responded only to Items
o the best of the knowledge of the Trustee the
any indenture under which the Trustee is a
ITEM 2. AFFILIATIONS WITH OBLIG

If the obligor is an affiliate o
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parenthes
incorporated herein by reference
under the Trust Indenture Act of
1.
A copy of the Organiza
(formerly Irving Trust Company)

the authority to commence busine
exercise corporate trust powers.
Form T-1 filed with Registration
1a and 1b to Form T-1 filed with
33-21672 and Exhibit 1 to Form T
Statement No. 33-29637.)
4.
A copy of the existing
T-1 filed with Registration Stat

6.
The consent of the Tru
(Exhibit 6 to Form T-1 filed wit

33-44051.)
7.
A copy of the latest r
pursuant to law or to the requir

examining authority.
---------*Pursuant to General Instruction
1, 2 and 16 of this form since t
obligor is not in default under
trustee.
\page
ng filed prior to the ascertainment by the
base a responsive answer to Item 2, the answer
ete information.
ed as correct unless amended by an
the Act, the Trustee, The Bank of New York,
ting under the laws of the State of New York,
f eligibility to be signed on its behalf by the
orized, all in The City of New York, and State
September, 2002.
\page
of
Y. 10286
aries,
System, at the close of business June 30, 2002,
all made by the Federal Reserve Bank of this
NOTE
Inasmuch as this Form T-1 is bei
Trustee of all facts on which to
to said Item is based on incompl
Item 2 may, however, be consider
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of
a corporation organized and exis
has duly caused this statement o
undersigned, thereunto duly auth
of New York, on the 30th day of
THE BANK OF NEW YORK

By: /s/Remo Reale
-------------------Name: Remo Reale
Title: Vice President
-2-
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition
THE BANK OF NEW YORK
of One Wall Street, New York, N.
And Foreign and Domestic Subsidi
a member of the Federal Reserve
published in accordance with a c
ons of the Federal Reserve Act.
Dollar Amounts
In Thousands
itory
currency
..................
$2,850,111
...................
6,917,898
...................
1,201,319
...................
13,227,788
ffices...............
1,748,562
reements to resell...
808,241
ables:
...................
974,505
d
.......36,544,957
..........578,710
d
..................
35,966,247
.....................
6,292,280
uding
...................
860,071
.....................
660
ubsidiaries
...................
272,214
nk on
...................
467,259
.....................
...................
1,804,922
District pursuant to the provisi

ASSETS
-----Cash and balances due from depos
institutions:
Noninterest-bearing balances and
and coin........................
Interest-bearing balances.......
Securities:
Held-to-maturity securities.....
Available-for-sale securities...
Federal funds sold in domestic o
Securities purchased under ag
Loans and lease financing receiv
Loans and leases held for sale..
Loans and leases, net of unearne
income..........................
LESS: Allowance for loan and
lease losses....................
Loans and leases, net of unearne
income and allowance............
Trading Assets..................
Premises and fixed assets (incl
capitalized leases).............
Other real estate owned.........
Investments in unconsolidated s
and associated companies........
Customers' liability to this ba
acceptances outstanding.........
Intangible assets...............
Goodwill........................
...................
70,679
.....................
4,639,158
.....................
$78,101,914
\page
...................
$29,456,619
.........11,393,028
.........18,063,591
eement
.................
26,667,608
............297,347
.........26,370,261
rities sold
...................
1,422,522
.....................
2,946,403
and
ases)..............
1,844,526
executed and
...................
469,319
s....................
1,840,000
.....................
5,998,479
.....................
$71,112,441
d
...................
500,154
Other intangible assets.........

Other assets....................
----------Total assets....................
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
----------Deposits:
In domestic offices.............
Noninterest-bearing.............
Interest-bearing................
In foreign offices, Edge and Agr
subsidiaries, and IBFs..........
Noninterest-bearing.............
Interest-bearing................
Federal funds purchased and secu
under agreements to repurchase..
Trading liabilities.............
Other borrowed money:
(includes mortgage indebtedness
obligations under capitalized le
Bank's liability on acceptances
outstanding.....................
Subordinated notes and debenture
Other liabilities...............
----------Total liabilities...............
===========
Minority interest in consolidate
subsidiaries....................
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EQUITY CAPITAL

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Perpetual preferred stock and re
lated surplus
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Common stock....................
....................
1,135,284
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Surplus.........................
....................
1,055,509
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Retained earnings...............
....................
4,224,963
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accumulated other comprehensive
income..............
53,563
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Other equity capital components.
....................
0
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total equity capital............
....................
6,489,319
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total liabilities and equity cap
ital................
$78,101,914
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ===========
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 7
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Page 3 of 3)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I, Thomas J. Mastro, Senior Vice
President and Comptroller of the above-named
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bank do hereby declare that this
Report of Condition has been prepared in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conformance with the instruction
s issued by the Board of Governors of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Federal Reserve System and is tr
ue to the best of my knowledge and belief.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thomas J. Mastro,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President and Comptr
oller
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We, the undersigned directors, a
ttest to the correctness of this Report of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Condition and declare that it ha
s been examined by us and to the best of our
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql knowledge and belief has been pr
epared in conformance with the instructions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued by the Board of Governors
of the Federal Reserve System and is true and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql correct.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thomas A. Renyi
)
Directors
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Gerald L. Hassell
)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Alan R. Griffith
)
d\plain\cf1\f50\fs16\ql Exhibit 99(a)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM OF LETTER OF TRANSMITTAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is offering to issue the followi
ng:
OTES DUE 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in exchange for its
2012
OTES DUE 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in exchange for its
2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURSUANT TO THE PROSPECTUS, DATE
D ______________, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS EXCHANGE OFFER WILL EXPIRE
AT 5:00 P.M. NEW YORK CITY TIME, ON
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql _______________, 2002, UNLESS EX
TENDED (THE "EXPIRATION DATE"). TENDERS MAY BE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VALIDLY WITHDRAWN PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DATE.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Deliver To:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK, AS EXCHANG
E AGENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Registered or Certified Mail,
Overnight Courier:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reference: Oncor Electric Delive
ry Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Hand:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporate Trust Services Window
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lobby Level
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 101 Barclay Street
ry Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Facsimile (for Eligible Insti
tution Only):
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confirm by Telephone:

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DELIVERY OF THIS LETTER OF TRANS
MITTAL TO AN ADDRESS OTHER THAN AS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SET-FORTH ABOVE, OR TRANSMISSION
OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHER THAN AS SET FORTH ABOVE, W
ILL NOT CONSTITUTE A VALID DELIVERY OF THIS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LETTER OF TRANSMITTAL.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned acknowledges tha
t he or she has received and reviewed a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospectus, dated ______________
, 2002 (the "Prospectus"), of Oncor Electric
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delivery Company, a Texas corpor
ation (the "Company"), and this letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmittal (the "Letter of Tran
smittal"), which together constitute the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's offer (the "Exchange O
ffer") to issue an aggregate principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql up to $700,000,000 of its 6.375%
Exchange Senior Secured Notes due 2012 (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "New 2012 Notes"), which have be
en registered under the Securities Act of 1933,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as amended (the "Securities Act"
), in exchange for a like principal amount of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued and outstanding 6.375% Se
nior Secured Notes due 2012 (the "Old 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes"), which were not so regis
tered and to issue an aggregate principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of up to $500,000,000 of its 7.0
00% Exchange Senior Secured Notes due 2032 (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "New 2032 Notes"), which have be
en registered under the Securities Act, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange for a like principal am
ount of issued and outstanding 7.000% Senior
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Notes due 2032 (the "Old
2032 Notes"), which were not so registered. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New 2012 Notes and the New 2032
Notes are collectively referred to herein as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes and the Old 2012 Notes
and the Old 2032 Notes are collectively
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to herein as the Old No
tes. Capitalized terms used but not defined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein have the meanings given t
o them in the Prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In order for any Holder (as here
in defined) of Old Notes to tender all or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any portion of such Old Notes, t
he Exchange Agent must receive either this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal completed
by such Holder or an Agent's Message (as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinafter defined) with respec
t to such Holder. Certificates for Old Notes are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be forwarded herewith or, if

a tender of Old Notes is to be made by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql book-entry transfer, the tender
should be made by book-entry transfer to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account maintained by the Exchan
ge Agent at The Depository Trust Company ("DTC")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the procedures set f
orth in the Prospectus under THE EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -- "Procedures for Tendering - R
egistered Holders and DTC Participants." Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Old Notes whose certificates
are not immediately available, or who are unable
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to deliver their certificates or
confirmation of the book-entry tender of their
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes into the Exchange Agen
t's account at DTC (a "Book-Entry Confirmation")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all other documents required
by this Letter of Transmittal to the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent on or prior to the Expirat
ion Date, must tender their Old Notes according
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the guaranteed delivery proce
dures set forth in THE EXCHANGE OFFER -\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Procedures for Tendering - Regi
stered Holders and DTC Participants" section of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Prospectus. See Instruction
1. DELIVERY OF DOCUMENTS TO DTC DOES NOT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSTITUTE DELIVERY TO THE EXCHA
NGE AGENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By causing Old Notes to be credi
ted to the Exchange Agent's account at DTC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with DTC's procedu
res for transfer, including the transmission by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC of an Agent's Message to the
Exchange Agent, the DTC participant will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to confirm, on behalf of
itself and the beneficial owners of such Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, all provisions of this Le
tter of Transmittal applicable to it and such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficial owners as fully as if
it had completed the information required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein and executed and delivere
d this Letter of Transmittal to the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent. As used herein, the term
"Agent's Message" means a message,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electronically transmitted by DT
C to and received by the Exchange Agent, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forming a part of the Book-Entry
Confirmation, which states that DTC has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received an express acknowledgem
ent from a Holder of Old Notes stating that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder has received and agrees t
o be bound by, and makes each of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations and warranties c
ontained in, this Letter of Transmittal and,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further, that such Holder agrees
that the Company may enforce this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal against such Holder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Holder", as used in th
is Letter of Transmittal, means any of (a)

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any person in whose name Old Not
es are registered on the books of the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) any other person who has obt
ained a properly completed bond power from the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered Holder, and (c) any D
TC participant whose Old Notes are held of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql record by DTC. Holders who wish
to tender their Old Notes must complete this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal in its ent
irety or must cause an Agent's Message to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitted.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any other beneficial owner whose
Old Notes are registered in the name of a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker or other nominee and who
wishes to tender should contact such broker or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nominee promptly and instruct su
ch broker or nominee to tender on behalf of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficial owner. If the benefic
ial owner wishes to tender on its own behalf,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such beneficial owner must, prio
r to completing and executing this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal and delivering its O
ld Notes, either make appropriate arrangements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to register ownership of the Old
Notes in such beneficial owner's name or obtain
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a properly completed bond power
from the registered Holder of the Old Notes. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer of registered ownership
may take considerable time.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Complete the appropriate boxes b
elow to indicate the Old Notes to which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Letter of Transmittal relat
es and the action the undersigned desires to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql take with respect to the Exchang
e Offer. If the space provided below is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inadequate, the certificate numb
ers and principal amount of Old Notes should be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql listed on a separate signed sche
dule affixed hereto.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE INSTRUCTIONS INCLUDED WITH T
HIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql QUESTIONS AND REQUESTS FOR ASSIS
TANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND THIS LETTER MAY BE DIRECTED
TO THE EXCHANGE AGENT.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql --------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql DESCRIPTION OF OLD NOTES
1
2
3
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql --------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql AGGREGATE

\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql PRINCIPAL
PRINCIPAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql NAME(S) AND ADDRESS(ES) OF REGIS
TERED
AMOUNT OF
AMOUNT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql HOLDER(S)(PLEASE FILL IN, IF BLA
NK)
OLD NOTE(S)
TENDERED**
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql CERTIFICATE (SEPARATE AND
(SEPARATE AND
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql NUMBER(S)* SPECIFY SERIES) S
PECIFY SERIES)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql --------------------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql -----------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql TOTAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql --------------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *
Need not be completed if Ol
d Notes are being tendered by book-entry transfer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ** Unless otherwise indicated
in the column, a Holder will be deemed to have tendered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ALL of the Old Notes represented
by the Old Notes indicated in column 2. See
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Instruction 2. Old Notes of each
series tendered hereby must be in minimum
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql denominations of principal amoun
t of $1,000 and integral multiples of $1,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql thereof. See Instruction 1.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql --------------------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql |_| CHECK HERE IF TENDERED OLD
NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MADE TO THE ACCOUNT MAINTAINED B
Y THE EXCHANGE AGENT WITH DTC AND COMPLETE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE FOLLOWING:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name of Tendering Institution: _
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC Account Number: ____________
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transaction Code Number: _______
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By crediting Old Notes to the Ex
change Agent's account at DTC in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with DTC's Automated Tender Offe
r Program ("ATOP") and by complying with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable ATOP procedures with

respect to the Exchange Offer, including
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitting an Agent's Message
to the Exchange Agent in which the Holder of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes acknowledges and agrees to
be bound by the terms of this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal, the participant in
ATOP confirms on behalf of itself and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficial owners of such Old No
tes all provisions of this Letter of Transmittal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable to it and such benefi
cial owners as if it had completed the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information required herein and
executed and transmitted this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal to the Exchange Agen
t.
NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF GUARANTEED DELIVERY PREVIOUSL
Y SENT TO THE EXCHANGE AGENT AND COMPLETE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE FOLLOWING:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name(s) of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registered Holder(s):
_
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Window Ticket Number (if any): _
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date of Execution of Notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranteed Delivery:
_
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name of Institution which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guaranteed delivery:
_
________________________________________________
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IF DELIVERY BY BOOK-ENTRY TRANSF
ER, COMPLETE THE FOLLOWING:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Account Number _________________
____ Transaction Code Number ___________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name of Tendering Institution __
________________________________________________
NOTES ARE ENCLOSED HEREWITH.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql |_| CHECK HERE IF YOU ARE A BRO
KER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COPIES OF THE PROSPECTUS AND 10
COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THERETO.
_______________________
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Address: _______________________
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ________________________________
_______________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the undersigned is not a brok
er-dealer, the undersigned represents that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it is not participating in, and
does not intend to participate in, a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution of the New Notes. I
f the undersigned is a broker-dealer that will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive New Notes for its own ac
count in exchange for Old Notes of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective series, it represents
that the Old Notes to be exchanged for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective series of New Notes w
ere acquired by it as a result of market-making
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other trading activities and
acknowledges that it will deliver a prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting the requirements of the
Securities Act in connection with any resale of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such New Notes; however, by so a
cknowledging and by delivering a prospectus, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned will not be deemed t
o admit that it is an "underwriter" within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning of the Securities Act.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TENDER OF OLD NOTES
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the terms and subject to th
e conditions of the Exchange Offer, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned hereby tenders to th
e Company the aggregate principal amount of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes indicated above. Subject t
o, and effective upon, the acceptance for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange of the Old Notes tender
ed hereby, the undersigned hereby sells, assigns
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and transfers to, or upon the or
der of, the Company all right, title and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in and to such Old Note
s as are being tendered hereby.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned hereby irrevocab
ly constitutes and appoints the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent its agent and attorney-infact with full power of substitution, for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of delivering this Lett
er of Transmittal and the Old Notes to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. The Power of Attorney g

ranted in this paragraph shall be deemed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable from and after the E
xpiration Date and coupled with an interest. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned hereby acknowledges
its full understanding that the Exchange Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also performs functions as agent
of the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned hereby represent
s and warrants that the undersigned has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql full power and authority to tend
er, sell, assign and transfer the Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered hereby and that the Com
pany will acquire good and unencumbered title
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, free and clear of all l
iens, restrictions, charges and encumbrances and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not subject to any adverse claim
when the same are accepted by the Company. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned hereby further repre
sents and warrants that (a) any New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired in exchange for Old Not
es tendered hereby will have been acquired in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the ordinary course of business
of the person receiving such New Notes, whether
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or not such person is the unders
igned, (b) neither the Holder of such Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nor any such other person is eng
aged or intends to engage in, or has an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement or understanding wit
h any person to participate in, the distribution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (within the meaning of the Secur
ities Act) of such New Notes, (c) neither the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of such Old Notes nor any
such other person is an "affiliate," as defined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Rule 405 under the Securities
Act, of the Company and (d) if such holder is a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker or dealer registered unde
r the Exchange Act, it will receive the New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes for its own account in exc
hange for Old Notes that were acquired as a
es or other trading activities.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned also acknowledge
s that this Exchange Offer is being made by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company in reliance on an in
terpretation by the staff of the Securities and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Commission (the "SEC"),
as set forth in no-action letters issued to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third parties, that the New Note
s issued in exchange for the Old Notes pursuant
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Exchange Offer may be off
ered for resale, resold and otherwise
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred by Holders thereof (
other than any such Holder that is an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "affiliate" of the Company withi
n the meaning of Rule 405 under the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act), without compliance with th
e registration and prospectus delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Securities Act

, provided that such New Notes are acquired in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the ordinary course of such Hold
ers' business and that such Holders have no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement with any person to p
articipate in the distribution (within the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning of the Securities Act) o
f such New Notes. However, the Company does not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intend to request the SEC to con
sider, and the SEC has not considered, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer in the context of
a no-action letter and there can be no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assurance that the staff of the
SEC would make a similar determination with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the Exchange Offer as
in other circumstances. The undersigned
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represents that it has no arrang
ement or understanding with any person to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participate in a distribution (w
ithin the meaning of the Securities Act) of New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes and, if such Holder is not
a broker-dealer, that it is not engaged in, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not intend to engage in, an
d has no arrangement or understanding with any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person to participate in, a dist
ribution (within the meaning of the Securities
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act) of such New Notes. The unde
rsigned also acknowledges that if the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation of the above ment
ioned no-action letters is incorrect such Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be held liable for any offer
s, resales or transfers of New Notes that are in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql violation of the Securities Act.
The undersigned further acknowledges that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neither the Company nor the Exch
ange Agent will indemnify any Holder for any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such liability under the Securit
ies Act.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the undersigned is a broker-d
ealer that will receive New Notes for its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql own account in exchange for Old
Notes that were acquired as a result of
r trading activities, it acknowledges that it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will deliver a prospectus meetin
g the requirements of the Securities Act in
ch New Notes; however, by so acknowledging and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by delivering a prospectus, the
undersigned will not be deemed to admit that it
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is an "underwriter" within the m
eaning of the Securities Act. The Company has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed that, subject to the prov
isions of the registration rights agreement, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus may be used by such p
articipating broker-dealer for a period of 90
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days after the consummation of t
he Exchange Offer. By acceptance of the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer, each participating broker
-dealer that will receive New Notes for its own

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account pursuant to the Exchange
Offer agrees that, upon receipt of notice from
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company of the happening of
any event which makes any statement in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus untrue in any materia
l respect or requires the making of any changes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Prospectus in order to ma
ke the statements therein not misleading (which
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice the Company agrees to del
iver promptly to such broker-dealer), such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker-dealer will suspend use o
f the Prospectus until the Company has amended
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or supplemented the Prospectus t
o correct such misstatement or omission and has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnished copies of the amended
or supplemented Prospectus to such broker
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dealer. The undersigned acknowle
dges that in reliance on an interpretation by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the staff of the SEC, a broker-d
ealer may fulfill its prospectus delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements with respect to the
New Notes (other than a resale of New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received in exchange for an unso
ld allotment of Old Notes purchased directly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the Company) with the Prosp
ectus which constitutes part of the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned also warrants th
at acceptance of any tendered Old Notes by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company and the issuance of
New Notes in exchange therefor shall constitute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance in full by the Compa
ny of certain of its obligations under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related registration rights agre
ement, which has been filed as an exhibit to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration statement in connec
tion with the Exchange Offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned will, upon reque
st, execute and deliver any additional
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents deemed by the Exchange
Agent or the Company to be necessary or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desirable to complete the sale,
assignment and transfer of the Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered hereby. All authority c
onferred or agreed to be conferred in this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal and every
obligation of the undersigned hereunder shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql binding upon the successors, ass
igns, heirs, executors, administrators, trustees
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in bankruptcy and legal represen
tatives of the undersigned and shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected by, and shall survive,

the death or incapacity of the undersigned. This
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tender may be withdrawn only in
accordance with the procedures set forth in THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE OFFER -- "Withdrawal of
Tenders of Old Notes" section of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise indicated herei
n in the box entitled "Special Issuance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instructions" below, please issu
e the New Notes (and, if applicable, substitute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates representing Old No
tes for any Old Notes not tendered or exchanged)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the name of the undersigned o
r, in the case of a book-entry delivery of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, please credit the account
indicated above maintained at DTC. Similarly,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless otherwise indicated under
the box entitled "Special Delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instructions" below, please send
the New Notes (and, if applicable, substitute
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates representing Old No
tes for any Old Notes not exchanged) to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undersigned at the address shown
above in the box entitled "Description of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company will be deemed to ha
ve accepted validly tendered Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when, as and if the Company shal
l have given oral (promptly confirmed in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing) or written notice of ac
ceptance to the Exchange Agent.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE UNDERSIGNED, BY COMPLETING T
HE BOX ENTITLED "DESCRIPTION OF OLD NOTES"
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ABOVE AND SIGNING THIS LETTER, W
ILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SET FORTH IN SUCH BOX ABOVE.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIAL ISSUANCE INSTRUCTIONS
SPECIAL DELIVERY INSTRUCTIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (SEE INSTRUCTIONS 3 AND 4)
(SEE INSTRUCTIONS 3 AND 4)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To be completed ONLY if certific
ates
To be completed ONLY if certificates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Old Notes not exchanged and/
or
for Old Notes not exchanged and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes are to be issued in th
e
New Notes are to be sent to someone
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name of someone other than the p
erson
other than the person or persons
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or persons whose signature(s)
whose signature(s) appear(s) on this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appear(s) below on this Letter o
f
Letter of Transmittal below or to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal, or if Old Notes
such person or persons at an address
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered by book-entry transfer
other than shown in the box entitled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are not accepted for excha
nge
"Description of Old Notes" on this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are to be returned by credit to
an
Letter of Transmittal above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account maintained at DTC other
than
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the account indicated above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Issue: New Notes and/or Old Note
s to:
Mail: New Notes and/or Old Notes to:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name(s) ________________________
______
Name(s) _____________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (PLEASE TYPE OR PRINT)
(PLEASE TYPE OR PRINT)
______
_____________________________________
(PLEASE TYPE OR PRINT)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Address ________________________
______
Address _____________________________
______
_____________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ZIP CODE)
(ZIP CODE)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -----------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employer Identification Number
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Social Security Number ____
____
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (COMPLETE SUBSTITUTE FORM W-9)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql |_| Credit unexchanged Old Note
s
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered by book-entry transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the DTC account set forth bel
ow.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (DTC ACCOUNT NUMBER,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IF APPLICABLE)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------\par\pard\plain\fs16
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IMPORTANT: THIS LETTER OR A FACS
IMILE HEREOF OR AN AGENT'S MESSAGE IN LIEU

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THEREOF (TOGETHER WITH THE CERTI
FICATES FOR OLD NOTES OR A BOOK-ENTRY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONFIRMATION AND ALL OTHER REQUI
RED DOCUMENTS OR THE NOTICE OF GUARANTEED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DELIVERY) MUST BE RECEIVED BY TH
E EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CITY TIME, ON THE EXPIRATION DAT
E.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLEASE READ THIS ENTIRE LETTER O
F TRANSMITTAL
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CAREFULLY BEFORE COMPLETING ANY
BOX ABOVE.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLEASE SIGN HERE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (TO BE COMPLETED BY ALL TENDERIN
G HOLDERS)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (COMPLETE ACCOMPANYING SUBSTITUT
E FORM W-9 ON REVERSE SIDE)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql x ______________________________
____
_________________________________, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql x ______________________________
____
_________________________________, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURE(S) OF OWNER
DATE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Area Code and Telephone Number _
___________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Letter of Transmittal must
be signed by the registered Holder(s) as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the name(s) appear(s) on the cer
tificate(s) for the Old Notes hereby tendered or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on a DTC security position listi
ng or by any person(s) authorized to become a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered Holder(s) by endorsem
ents and documents transmitted herewith. If
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql signature is by a trustee, execu
tor, administrator, guardian, officer or other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person acting in a fiduciary or
representative capacity, please set forth full
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql title. See Instruction 3.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name(s): _______________________
________________________________________________
_______________________________________

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capacity:_______________________
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Address: _______________________
________________________________________________
_______________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (INCLUDING ZIP CODE)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURE GUARANTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (IF REQUIRED BY INSTRUCTION 3)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signature(s) Guaranteed by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Eligible Institution:________
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (AUTHORIZED SIGNATURE)
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (TITLE)
________________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (NAME AND FIRM)
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INSTRUCTIONS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORMING PART OF THE TERMS AND CO
NDITIONS OF THE EXCHANGE OFFER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. DELIVERY OF THIS LETTER OF
TRANSMITTAL AND OLD NOTES; GUARANTEED DELIVERY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCEDURES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In order for any Holder of Old N
otes to tender all or any portion of such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes, the Exchange Agent mu
st receive either this Letter of Transmittal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completed by such Holder or an A
gent's Message with respect to such Holder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificates for all physically
tendered Old Notes, or Book-Entry Confirmation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the case may be, as well as a
properly completed and duly executed Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal (or facsimile hereof
or Agent's Message in lieu hereof) and any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other documents required by this

Letter of Transmittal, must be received by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Agent at the address se
t forth herein prior to the Expiration Date, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the tendering Holder must comply
with the guaranteed delivery procedures set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth below. Old Notes tendered
hereby must be in minimum denominations of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,000 and integral multiples of
$1,000 in excess thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders whose certificates for O
ld Notes are not immediately available or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql who cannot deliver their certifi
cates and all other required documents to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Agent prior to the Expi
ration Date, or who cannot complete the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures for book-entry tender
on a timely basis, may tender their Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the guaranteed deliv
ery procedures set forth in the Prospectus under
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE EXCHANGE OFFER -- "Procedure
s of Tendering - Registered Holders and DTC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participants -- Guaranteed Deliv
ery Procedures." Pursuant to such procedures,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) such tender must be made thr
ough an Eligible Institution, (2) prior to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date, the Exchange Ag
ent must receive from such Eligible Institution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a properly completed and duly ex
ecuted Notice of Guaranteed Delivery,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantially in the form provid
ed by the Company (by facsimile transmission,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mail or hand delivery), setting
forth the name and address of the Holder of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, the certificate numbers o
f such Old Notes (unless tender is to be made by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql book-entry transfer) and the pri
ncipal amount of Old Notes (of each series)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered, stating that the tende
r is being made thereby and guaranteeing that,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within five New York Stock Excha
nge ("NYSE") trading days after the date of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of the Notice of Guaran
teed Delivery, the certificates for all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql physically tendered Old Notes, i
n proper form for transfer, or a Book-Entry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confirmation, as the case may be
, together with a properly completed and duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed Letter of Transmittal (
or facsimile thereof or Agent's Message in lieu
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof), with any required sign
ature guarantees and any other documents
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by this Letter of Trans
mittal will be deposited by the Eligible
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Institution with the Exchange Ag
ent, and (3) the certificates for all physically
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered Old Notes, in the prope
r form for transfer, or Book-Entry Confirmation,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the case may be, together wit
h a properly completed and duly executed Letter

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Transmittal (or facsimile the
reof or Agent's Message in lieu thereof), with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any required signature guarantee
s and all other documents required by this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal, must be r
eceived by the Exchange Agent within five NYSE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trading days after the date of e
xecution of the Notice of Guaranteed Delivery.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The method of delivery of Old No
tes, this Letter of Transmittal and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other required documents to the
Exchange Agent is at the election and risk of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Holder, but the delivery wil
l be deemed made only when actually received by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Agent. Instead of d
elivery by mail, it is recommended that Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use an overnight or hand deliver
y service. In all cases, sufficient time should
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be allowed to assure delivery to
the Exchange Agent before the Expiration Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No Old Notes or Letters of Trans
mittal should be sent to the Company. Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may request their respective bro
kers, dealers, commercial banks, trust companies
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or nominees to effect the above
transactions for such Holders.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql See the section entitled THE EXC
HANGE OFFER in the Prospectus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. PARTIAL TENDERS (NOT APPLIC
ABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSFER).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If less than all of the Old Note
s of any series evidenced by a submitted
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate are to be tendered,
the tendering Holder(s) should fill in the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount and s
eries of Old Notes to be tendered in the box
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above entitled "Description of O
ld Notes -- Principal Amount Tendered." A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reissued certificate representin
g the balance of nontendered Old Notes (of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective series) will be sent
to such tendering Holder, unless otherwise
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in the appropriate box
on this Letter of Transmittal, promptly after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Expiration Date. ALL OF THE
OLD NOTES OF EACH SERIES DELIVERED TO THE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE AGENT WILL BE DEEMED TO
HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. SIGNATURES ON THIS LETTER O
F TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GUARANTEE OF SIGNATURES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If this Letter of Transmittal is
signed by the Holder of the Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered hereby, the signature m
ust correspond exactly with the name as written
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the face of the certificates
or on DTC's security position listing as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of such Old Notes without
any change whatsoever.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any tendered Old Notes are ow
ned of record by two or more joint owners,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of such owners must sign thi
s Letter of Transmittal.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any tendered Old Notes are re
gistered in different names on several
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates, it will be necessa
ry to complete, sign and submit as many separate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copies of this Letter of Transmi
ttal as there are different registrations of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates.
signed by the registered Holder or Holders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Old Notes specified herei
n and tendered hereby, no endorsements of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates or separate bond po
wers are required. If, however, the New Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are to be issued, or any untende
red Old Notes are to be reissued, to a person
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than the registered Holder
, then endorsements of any certificates
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitted hereby or separate b
ond powers are required. Signatures on such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate(s) or bond powers mu
st be guaranteed by an Eligible Institution.
signed by a person other than the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered Holder or Holders of
any certificate(s) specified herein, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate(s) must be endorsed
or accompanied by appropriate bond powers, in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either case signed exactly as th
e name or names of the registered Holder or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holders appear(s) on the certifi
cate(s) and signatures on such certificate(s) or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bond powers must be guaranteed b
y an Eligible Institution.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If this Letter of Transmittal or
any certificates representing Old Notes or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any bond powers are signed by tr
ustees, executors, administrators, guardians,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorneys-in-fact, officers of c
orporations or others acting in a fiduciary or

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative capacity, such pe
rsons should so indicate when signing, and,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless waived by the Company, pr
oper evidence satisfactory to the Company of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their authority to so act must b
e submitted.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCEPT AS PROVIDED BELOW, ENDORS
EMENTS ON CERTIFICATES FOR OLD NOTES OR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURES ON BOND POWERS REQUIR
ED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FIRM WHICH IS A MEMBER OF A REGI
STERED NATIONAL SECURITIES EXCHANGE OR A MEMBER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF THE NATIONAL ASSOCIATION OF S
ECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OR TRUST COMPANY HAVING AN OFFIC
E OR CORRESPONDENT IN THE UNITED STATES (AN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ELIGIBLE INSTITUTION").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURES ON THIS LETTER OF TRA
NSMITTAL NEED NOT BE GUARANTEED BY AN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ELIGIBLE INSTITUTION IF THE OLD
NOTES ARE TENDERED: (1) BY A REGISTERED HOLDER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF OLD NOTES WHO HAS NOT COMPLET
ED THE BOX ENTITLED "SPECIAL ISSUANCE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INSTRUCTIONS" OR "SPECIAL DELIVE
RY INSTRUCTIONS" OR (2) FOR THE ACCOUNT OF AN
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ELIGIBLE INSTITUTION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. SPECIAL ISSUANCE AND DELIVE
RY INSTRUCTION.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tendering Holders of Old Notes s
hould indicate in the applicable box the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name and address to which New No
tes issued pursuant to the Exchange Offer and/or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substitute certificates evidenci
ng Old Notes not exchanged are to be issued or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sent, if different from the name
or address of the person signing this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal. In the case of issu
ance in a different name, the employer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql identification or social securit
y number of the person named must also be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicated. Holders tendering Old
Notes by book-entry transfer may request that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes not exchanged be credi
ted to such account maintained at DTC as such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder may designate hereon. If
no such instructions are given, such Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not exchanged will be returned t
o the name or address of the person signing this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. TAXPAYER IDENTIFICATION NUM

BER.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States federal income tax
law generally requires that a tendering
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder whose Old Notes are accep
ted for exchange must provide the Company (as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payor) with such Holder's correc
t Taxpayer Identification Number ("TIN") on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Substitute Form W-9 below, which
in the case of a tendering Holder who is an
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individual, is generally his or
her social security number. If the Company is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not provided with the current TI
N or an adequate basis for an exemption, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendering Holder may be subject
to a $50 penalty imposed by the Internal Revenue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service. In addition, delivery t
o such tendering Holder of New Notes may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to backup withholding of
all reportable payments made after the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange. The backup withholding
rate for 2002 and 2003 is 30%; for 2004 and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2005, 29%; for 2006 through 2010
, 28%; and for 2011 and later years, 31%.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Backup withholding is not an add
itional tax. Any amounts withheld under the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql backup withholding rules will be
allowed as a credit or a refund against the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder's United States federal i
ncome tax liability, if certain required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information is provided to the I
nternal Revenue Service.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certain types of Holders of Old
Notes (generally including, among others,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporations and certain foreign
entities) are not subject to these backup
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withholding and reporting requir
ements. See the enclosed Guidelines for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certification of Taxpayer Identi
fication Number on Substitute Form W-9 (the "W-9
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guidelines") for additional inst
ructions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To prevent backup withholding, e
ach tendering Holder of Old Notes must
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide its correct TIN by compl
eting the substitute Form W-9 set forth below,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certifying that the Holder is a
United States person (including a United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resident alien), that the TIN pr
ovided is correct (or that such Holder is
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql awaiting a TIN) and that (1) the
Holder is exempt from backup withholding, (2)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Holder has not been notified
by the Internal Revenue Service that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder is subject to a backup wi
thholding as a result of a failure to report all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest or dividends or (3) the

Internal Revenue Service has notified the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder that such Holder is no lo
nger subject to backup withholding. If the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendering Holder of Old Notes is
a nonresident alien or foreign entity not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to backup withholding, s
uch Holder must give the Company a completed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form W-8BEN, Certificate of Fore
ign Status of Beneficial Owner for United States
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Tax Withholding, or if applicabl
e, Form W-8ECI, Certificate of Foreign Person's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Claim for Exemption From Withhol
ding on Income Effectively Connected with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Conduct of a Trade or Business i
n the United States. These forms may be obtained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the Exchange Agent. If the
Old Notes are in more than one name or are not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the name of the actual owner,
such Holder should consult the W-9 Guidelines
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for information on which TIN to
report. If such Holder does not have a TIN, such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder should consult the W-9 Gu
idelines for instructions on applying for a TIN,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql check the box in Part 2 of the s
ubstitute Form W-9, write "applied for" in lieu
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its TIN and sign the Certific
ate of Awaiting Taxpayer Identification Number.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note: Checking this box and writ
ing "applied for" on the Form means that such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder has already applied for a
TIN or that such Holder intends to apply for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one in the near future. If such
Holder does not provide its TIN to the Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within 60 days, backup withholdi
ng will begin and continue until such Holder
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnishes its TIN to the Company
.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. TRANSFER TAXES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company will pay all transfe
r taxes, if any, applicable to the transfer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Old Notes to it or its order
pursuant to the Exchange Offer. If, however, New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes and/or substitute Old Note
s not exchanged are to be delivered to, or are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be registered or issued in th
e name of, any person other than the registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder of the Old Notes tendered
hereby, or if tendered Old Notes are registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the name of any person other
than the person signing this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal, or if a transfer ta
x is imposed for any reason other than the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange of Old Notes to the Com
pany or its order pursuant to the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer, then the amount of any su
ch transfer taxes (whether imposed on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered Holder or any other p
erson) will be payable by the tendering Holder.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If satisfactory evidence of paym
ent of such taxes or exemption therefrom is not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql submitted herewith, the amount o
f such transfer taxes will be billed directly to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such tendering Holder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. COMPANY DETERMINATION FINAL
; WAIVER OF CONDITIONS.
, form, eligibility (including time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt), acceptance of tendered
Old Notes and withdrawal of tendered Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be determined by the Compan
y in its sole discretion, which determination
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be final and binding. The C
ompany reserves the absolute right to reject any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all Old Notes not properly t
endered or any Old Notes the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptance of which would, in th
e opinion of counsel for the Company, be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unlawful. The Company also reser
ves the right to waive any defects,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irregularities or conditions of
tender as to particular Old Notes. The Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation of the terms and
conditions of the Exchange Offer (including the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instructions in this Letter of T
ransmittal) shall be final and binding on all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties. Unless waived, any defe
cts or irregularities in connection with tenders
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Old Notes must be cured withi
n such time as the Company shall determine. None
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company, the Exchange Age
nt nor any other person shall be under any duty
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to give notification of defects
or irregularities with respect to tenders of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, nor shall any of them inc
ur any liability for failure to give such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notification. Tenders of Old Not
es will not be deemed to have been made until
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such defects or irregularities h
ave been cured or waived. Any Old Notes received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Exchange Agent that are n
ot properly tendered and as to which the defects
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or irregularities have not been
cured or waived will be returned by the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent to the tendering Holders o
f the Old Notes, unless otherwise provided in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Letter of Transmittal, as s
oon as practicable following the Expiration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. NO CONDITIONAL TENDERS.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No alternative, conditional, irr
egular or contingent tenders will be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accepted. All tendering Holders
of Old Notes, by causing this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal or an Agent's Messag
e in lieu hereof to be delivered to the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent, shall waive any right to
receive notice of the acceptance of their Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes for exchange.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql None of the Company, the Exchang
e Agent nor any other person is obligated
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to give notice of any defect or
irregularity with respect to any tender of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes nor shall any of them incu
r any liability for failure to give any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. MUTILATED, LOST, STOLEN OR
DESTROYED OLD NOTES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any Holder whose Old Notes have
been mutilated, lost, stolen or destroyed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql should contact the Exchange Agen
t at the address indicated above for further
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instructions.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. REQUESTS FOR ADDITIONAL COP
IES.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requests for additional copies o
f the Prospectus and this Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal may be directed to t
he Exchange Agent, at the address and telephone
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number indicated above.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. INCORPORATION OF THE LETTER
OF TRANSMITTAL.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Letter of Transmittal shall
be deemed to be incorporated in, and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledged and accepted by, a
tender through, DTC's ATOP procedures by any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant on behalf of itself
and the beneficial owners of any Old Bonds so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. WITHDRAWALS.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This tender may be withdrawn onl
y in accordance with the procedures set
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in THE EXCHANGE OFFER -- "
Withdrawal of Tenders of Old Notes" section of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Prospectus.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO BE COMPLETED BY ALL TENDERING
HOLDERS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (SEE INSTRUCTION 5)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBSTITUTE
PART 1 -- PLE
ASE PROVIDE YOUR TIN
TIN:_________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form W-9
IN THE BOX AT
RIGHT AND CERTIFY BY (Social Security Number
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNING AND DATING BELOW:
or Employer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Identification Number)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PART 2 -- TIN APPLIED FOR |_|
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEPARTMENT OF THE PAYOR'S REQUE
ST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TREASURY INTERNAL AND CERTIFICA
TION
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REVENUE SERVICE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CERTIFICATION: UNDER THE PENALTI
ES OF PERJURY, I CERTIFY THAT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) the number shown on this fo
rm is my correct Taxpayer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Identification Number (or I am w
aiting for a number to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be issued to me);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) I am not subject to backup
withholding because: (a) I
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql am exempt from backup withholdin
g, or (b) I have not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been notified by the Internal Re
venue Service (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "IRS") that I am subject to back
up withholding as a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result of a failure to report al
l interest or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dividends, or (c) the IRS has no
tified me that I am no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql longer subject to backup withhol
ding;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) I am a U.S. person (includi
ng a U.S. resident alien);
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) any other information provi
ded on this form is true
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and correct.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURE ____________________
DATE ______________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql You must cross out item (2) of t

he above certification if you have been notified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the IRS that you are subject
to backup withholding because of underreporting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of interest or dividends on your
tax return and you have not been notified
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequently by the IRS that you
are no longer subject to backup withholding.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YOU MUST COMPLETE THE FOLLOWING
CERTIFICATE IF YOU CHECKED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BOX IN PART 2 OF SUBSTITUTE
FORM W-9
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CERTIFICATE OF AWAITING TAXPAYER
IDENTIFICATION NUMBER
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I certify under penalties of per
jury that a Taxpayer Identification Number has
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not been issued to me, and eithe
r (a) I have mailed or delivered an application
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to receive a Taxpayer Identifica
tion Number to the appropriate Internal Revenue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service Center or Social Securit
y Administrative Office or (b) I intend to mail
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or deliver an application in the
near future. I understand that if I do not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide a Taxpayer Identificatio
n Number by the time of the exchange, 30 percent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (subject to further adjustment u
nder applicable law) of all reportable payments
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made to me thereafter will be wi
thheld until I provide a number.
________
____________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURE
DATE
d\plain\cf1\f50\fs16\ql Exhibit 99(b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM OF NOTICE OF GUARANTEED DEL
IVERY
2012
2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (THE "OLD NOTES")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This form or one substantially e
quivalent hereto (along with the related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal) must be u
sed to accept the related Exchange Offer of
(the "Company") made pursuant to a prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated _____________, 2002 (the "
Prospectus"), if certificates for Old Notes of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company are not immediately
available or if the procedures for book-entry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer cannot be completed on
a timely basis or time will not permit all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required documents to reach the
Exchange Agent prior to 5:00 p.m., New York City
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, on the Expiration Date of
the Exchange Offer. Such form may be delivered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or transmitted by telegram, tele
x, facsimile transmission, mail or hand delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Exchange Agent as set for
th below. In addition, in order to utilize the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guaranteed delivery procedure to
tender Old Notes pursuant to the related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange offer, a completed, sig
ned and dated Letter of Transmittal (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facsimile thereof) must also be
received by the Exchange Agent prior to 5:00
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql P.M., New York City time, on the
Expiration Date. Capitalized terms not defined
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein are defined in the Prospe
ctus.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE EXCHANGE AGENT IS:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Registered or Certified Mail,
Overnight Courier:
ry Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Hand:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporate Trust Services Window
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lobby Level
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 101 Barclay Street
ry Company
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By Facsimile (for Eligible Insti
tution Only):
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confirm by Telephone:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DELIVERY OF THIS INSTRUMENT TO A
N ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TRANSMISSION OF THIS INSTRUMENT
VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WILL NOT CONSTITUTE A VALID DELI
VERY.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LADIES AND GENTLEMEN:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon the terms and conditions se
t forth in the Prospectus and the related
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal, the under
signed hereby tenders to the Company the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount and series of O
ld Notes set forth below, pursuant to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guaranteed delivery procedures d
escribed in the Prospectus under THE EXCHANGE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OFFER -- "Procedures for Tenderi
ng - Registered Holders and DTC Participants -\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranteed Delivery Procedures."
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Principal Amount of Old Notes (s
pecify If Old Notes will be delivered by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql series) Tendered:*
book-entry transfer to The Depository
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trust Company, provide account n
umber.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $_______________________________
______
______
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificates Nos. (if available)
:
Account Number ________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total Principal Amount Represent
ed by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes (specify series)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificate(s):
______
______
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *
Must be in denominations of
principal amount of $1,000 and integral
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql multiples of $1,000 in excess th
ereof. See Instruction 1 in the Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------------\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ALL AUTHORITY HEREIN CONFERRED O
R AGREED TO BE CONFERRED SHALL SURVIVE THE DEATH
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OR INCAPACITY OF THE UNDERSIGNED
AND EVERY OBLIGATION OF THE UNDERSIGNED
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql HEREUNDER SHALL BE BINDING UPON
THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND ASSIGNS OF THE UNDERSIGNED.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLEASE SIGN HERE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql X ______________________________
_____
___________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql X ______________________________
_____
___________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURE(S) OF OWNER(S) OR
DATE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AUTHORITY SIGNATORY
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Telephone Number (including area
code): _________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Notice of Guaranteed Delive
ry must be signed by the Holder(s) of Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes as their name(s) appear(s)
on certificates for Old Notes or on a DTC
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security position listing, or by
person(s) authorized to become registered
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holder(s) by endorsement and doc
uments transmitted with this Notice of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranteed Delivery. If signatur
e is by a trustee, executor, administrator,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guardian, attorney-in-fact, offi
cer or other person acting in a fiduciary or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative capacity, such pe
rson must set forth his or her full title below.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLEASE PRINT NAME(S) AND ADDRESS
(ES)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name(s): _______________________

______________________________________________
_____________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capacity:_______________________
______________________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Address(es): ___________________
______________________________________________
_____________________________________
_____________________________________
_____________________________________
_____________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GUARANTEE
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The undersigned, a member of a r
egistered national securities exchange, or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a member of the National Associa
tion of Securities Dealers, Inc., or a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial bank or trust company
having an office or correspondent in the United
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Securities Exchange Ac
t of 1934, as amended, hereby guarantees that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the certificates representing th
e principal amount and series of Old Notes
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered hereby in proper form f
or transfer, or timely confirmation of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql book-entry transfer of such Old
Notes into the Exchange Agent's account at The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Depository Trust Company pursuan
t to the procedures set forth in the Prospectus
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under THE EXCHANGE OFFER -- "Pro
cedures for Tendering - Registered Holders and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DTC Participants," together with
one or more properly completed and duly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed Letters of Transmittal
(or facsimile thereof or Agent's Message in lieu
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof) and any other documents
required by the Letter of Transmittal in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of the Old Notes, will b
e received by the Exchange Agent at the Address
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth above, no later than f
ive New York Stock Exchange trading days after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of execution hereof.
_____ _______________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name of Firm
Authorized Signature
_____ _______________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Address
Title
_____ Name:__________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Zip Code
(Please Type or Print
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Area Code and Tel. No. _________
_____ Dated: ________________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTE: DO NOT SEND CERTIFICATES F
OR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OLD NOTES SHOULD ONLY BE SENT WI
TH YOUR LETTER OF TRANSMITTAL.
d\plain\cf1\f50\fs16\ql Exhibit 99(c)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql __________, 2002
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM OF EXCHANGE AGENT AGREEMENT
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 101 Barclay Street, 8W
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Corporate Trust Administr
ation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Oncor Electric Delivery Company,
a Texas corporation (the "Company"),
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposes to make an offer (the "
Exchange Offer") to exchange up to $700,000,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate principal amount of it
s outstanding 6.375% Senior Secured Notes due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2012 and up to $500,000,000 aggr
egate principal amount of its outstanding 7.000%
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Secured Notes due 2032 (c
ollectively, the "Old Notes") for equal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amounts, respectively,
of its 6.375% Exchange Senior Secured Notes due
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2012 and its 7.000% Exchange Sen
ior Secured Notes due 2032 (collectively, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "New Notes") which New Notes hav

e been registered under the Securities Act of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1933, as amended. The terms and
conditions of the Exchange Offer as currently
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated are set forth in a
prospectus, dated ________, 2002 (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Prospectus"), proposed to be di
stributed to all holders of the Old Notes. The
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Old Notes and the New Notes are
collectively referred to herein as the "Notes".
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless the context requires othe
rwise, references herein to the Notes, the Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes, the New Notes or any seri
es of the Notes will mean beneficial interests
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the book-entry interests that
The Depository Trust Company ("DTC") has in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such notes. Capitalized terms us
ed herein and not defined shall have the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meanings ascribed to them in the
Prospectus or the related letter of transmittal
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the form or forms to be deliv
ered with the Prospectus to holders of the Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes (the "Letter of Transmitta
l").
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company hereby appoints The
Bank of New York to act as exchange agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Exchange Agent") in connec
tion with the Exchange Offer. References
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinafter to "you" shall refer
to The Bank of New York in its capacity as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Agent hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Exchange Offer is expected t
o be commenced by the Company on or about
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql __________, 2002. The Letter of
Transmittal accompanying the Prospectus (or in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case of book-entry securitie
s, the Automated Tender Offer Program ("ATOP")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Book-Entry Transfer Facil
ity (as defined below)) is to be used by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of the Old Notes to acce
pt the Exchange Offer and contains instructions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the delivery of
certificates for Old Notes tendered in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection therewith.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Exchange Offer shall expire
at 5:00 P.M., New York City time, on
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql __________, 2002 or on such late
r date or time to which the Company may extend
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Offer (the "Expirat
ion Date"). Subject to the terms and conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in the Prospectus, the
Company expressly reserves the right to extend
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Offer from time to

time and may extend the Exchange Offer by giving
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql oral (promptly confirmed in writ
ing) or written notice to you before 9:00 A.M.,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York City time, on the busin
ess day following the previously scheduled
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company expressly reserves t
he right to amend, in any way not
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inconsistent with the Registrati
on Rights Agreement, or terminate the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer, and not to accept for exc
hange any Old Notes not theretofore accepted for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange, upon the occurrence of
any of the conditions of the Exchange Offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the Prospectus unde
r the caption THE EXCHANGE OFFER -- "Conditions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Exchange Offer." The Comp
any will give oral (promptly confirmed in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing) or written notice of an
y amendment, termination or non-acceptance to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql you as promptly as practicable.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In carrying out your duties as E
xchange Agent, you are to act in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the following instructions:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. You will perform such duties
and only such duties as are specifically
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in the section of the
Prospectus captioned THE EXCHANGE OFFER and in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Letter of Transmittal or as
specifically set forth herein; provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that in no way will you
r general duty to act in good faith and without
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gross negligence be discharged b
y the foregoing.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. You will establish an account
with respect to the Old Notes at DTC (the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Book-Entry Transfer Facility")
for purposes of the Exchange Offer within two
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business days after the date of
the Prospectus, and any financial institution
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that is a participant in the Boo
k-Entry Transfer Facility's systems may make
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql book-entry delivery of the Old N
otes by causing the Book-Entry Transfer Facility
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to transfer such Old Notes into
your account in accordance with the Book-Entry
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transfer Facility's procedure fo
r such transfer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. You are to examine each of th
e Letters of Transmittal and confirmation
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of book-entry transfer into your
account at the Book-Entry Transfer Facility (or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates for Old Notes) and
any other documents delivered or mailed to you

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by or for holders of the Old Not
es to ascertain whether: (i) the Letters of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal and any such other d
ocuments are duly executed and properly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completed in accordance with ins
tructions set forth therein and (ii) the Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes have otherwise been proper
ly tendered. The determination of all questions
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as to validity, form, eligibilit
y, acceptance and withdrawal with respect to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange of any Old Notes shall
be made by the Company. In each case where the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal or any oth
er document has been improperly completed or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed or any of the certifica
tes for Old Notes are not in proper form for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer or some other irregular
ity in connection with the acceptance of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer exists, you will
endeavor to inform the presenters of the need
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for fulfillment of all requireme
nts and to take any other action as may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably necessary or advisabl
e to cause such irregularity to be corrected.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql However, you shall not incur any
liabilities under this agreement for failure to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql give any such notification.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. With the approval of the Pres
ident, Vice President or Treasurer of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or any other person desi
gnated by such an officer in writing (such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval, if given orally, to be
promptly confirmed in writing), you are
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized to waive any defects,
irregularities or conditions of tender in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with any tender of Ol
d Notes pursuant to the Exchange Offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Tenders of Old Notes may be m
ade only as set forth in the Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal and in the section o
f the Prospectus captioned THE EXCHANGE OFFER -\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Procedures for Tendering - Regi
stered Holders and DTC Participants", and Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes shall be considered proper
ly tendered only when tendered in accordance
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the procedures set forth th
erein. Notwithstanding the provisions of this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph 5, Old Notes which the
President, Vice President or Treasurer of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or any other person desi
gnated in writing by such an officer shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approve as having been properly
tendered shall be considered to be properly

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tendered (such approval, if give
n orally, to be promptly confirmed in writing).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. You shall advise the Company
with respect to any Old Notes received
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent to the Expiration Dat
e and accept its instructions with respect to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition of such Old Notes.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. You shall accept tenders:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a. in cases where the Old Notes
are registered in two or more names
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only if signed by all named hold
ers;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql b. in cases where the signing pe
rson (as indicated in the Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal) is acting in a fidu
ciary or a representative capacity only
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when proper evidence of his or h
er authority so to act is submitted; and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql c. from persons other than the r
egistered holder of Old Notes provided
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that customary transfer requirem
ents, including the payment of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable transfer taxes, are f
ulfilled.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql You shall accept partial tenders
of Old Notes when so indicated and as
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted in the Letter of Trans
mittal and deliver certificates for Old Notes to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the registrar for split-up and r
eturn any untendered Old Notes or Old Notes that
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have not been accepted by the Co
mpany to the holder (or such other person as may
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be designated in the Letter of T
ransmittal) as promptly as practicable after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration or termination of the
Exchange Offer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Upon satisfaction or waiver o
f all of the conditions to the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer, the Company will notify y
ou (such notice if given orally, to be promptly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confirmed in writing) of its acc
eptance, promptly after the Expiration Date, of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Old Notes properly tendered
and you, on behalf of the Company, will exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Old Notes for New Notes and
cause such Old Notes to be cancelled. Delivery
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of New Notes will be made on beh
alf of the Company by you at the rate of $1,000
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount of New Notes fo
r each $1,000 principal amount of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corresponding series of Old Note
s tendered as promptly as practicable after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice (such notice if given ora

lly, to be confirmed in writing) of acceptance
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of said Old Notes by the Company
; provided, however, that in all cases, Old
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes tendered pursuant to the E
xchange Offer will be exchanged only after
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timely receipt by you of certifi
cates for such Old Notes (or confirmation of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql book-entry transfer into your ac
count at the Book-Entry Transfer Facility), a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properly completed and duly exec
uted Letter of Transmittal (or manually signed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facsimile thereof or an Agent's
Message (as defined in the Prospectus) in lieu
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof) with any required signa
ture guarantees and any other required
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents. You shall issue New N
otes only in denominations of $1,000 or any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integral multiple thereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Tenders pursuant to the Excha
nge Offer are irrevocable, except that,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the terms and upon th
e conditions set forth in the Prospectus and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter of Transmittal, Old Notes
tendered pursuant to the Exchange Offer may be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withdrawn at any time prior to t
he Expiration Date.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. The Company shall not be req
uired to exchange any Old Notes tendered if
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the conditions set forth
in the Exchange Offer are not met. Notice of any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decision by the Company not to e
xchange any Old Notes tendered shall be given in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a notice (and, if given orally,
promptly confirmed in writing) by the Company to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql you.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. If, pursuant to the Exchange
Offer, the Company does not accept for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange all or part of the Old
Notes tendered because of an invalid tender, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence of certain other even
ts set forth in the Prospectus under the caption
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE EXCHANGE OFFER -- "Condition
s to the Exchange Offer" or otherwise, you shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as soon as practicable after the
expiration or termination of the Exchange Offer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql return such certificates for una
ccepted Old Notes (or effect appropriate
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql book-entry transfer), together w
ith any related required documents and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letters of Transmittal relating
thereto that are in your possession, to the

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons who deposited them (or e
ffected such book-entry transfer).
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. All certificates for reissue
d Old Notes, unaccepted Old Notes or for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Notes shall be forwarded by
first-class mail, postage prepaid under a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql blanket surety bond protecting y
ou and the Company from loss or liability
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising out of the nonreceipt or
nondelivery of such certificates or (b)
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered mail insured separate
ly for the replacement value of each such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates..
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. You are not authorized to pa
y or offer to pay any concessions,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commissions or solicitation fees
to any broker, dealer, bank or other persons or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to engage or utilize any person
to solicit tenders.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. As Exchange Agent hereunder
you:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a. shall not be liable for any a
ct or omission to act unless the same
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes your own negligence,
willful misconduct or bad faith, and in no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event shall you be liable to a s
ecurityholder, the Company or any third
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party for special, indirect or c
onsequential damages, or lost profits,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising in connection with this
Agreement.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql b. shall have no duties or oblig
ations other than those specifically
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth herein or as may be su
bsequently agreed to in writing by you and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company;
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql c. will be regarded as making no
representations and having no
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibilities as to the valid
ity, sufficiency, value or genuineness of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the certificates or the O
ld Notes represented thereby deposited with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql you pursuant to the Exchange Off
er, and will not be required to and will
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql make no representation as to the
validity, value or genuineness of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer;
e any legal action hereunder which
t involve any expense or liability, unless
th indemnity reasonably satisfactory to you
ng such action as is agreed by the parties
all be protected in acting in reliance
, opinion, notice, letter, telegram or
ered to you and reasonably believed by you
igned by the proper person or persons;
ender, statement, request, comment,
atsoever not only as to its due execution
f its provisions, but also as to the truth
contained therein, which you shall in good
o have been signed or represented by a
ons acting in a fiduciary or representative
all be protected in acting upon
m any officer of the Company or any other
with respect to any questions
onsibilities and the advice or opinion of
omplete authorization and protection in
fered or omitted to be taken by you
ccordance with the advice or opinion of
endering Old Notes pursuant to the
tender or refrain from tendering any
e market value, decline or appreciation in
at may or may not occur as a result of the
d. shall not be obligated to tak

might in your reasonable judgmen
you shall have been furnished wi
and any additional fees for taki
hereto;
e. may reasonably rely on and sh
upon any certificate, instrument
other document or security deliv
to be genuine and to have been s
f. may reasonably act upon any t
agreement or other instrument wh
and validity and effectiveness o
and accuracy of any information
faith believe to be genuine or t
proper person or persons or pers
capacity;
g. may reasonably rely on and sh
written or oral instructions fro
party designated by the Company;
h. may consult with your counsel
relating to your duties and resp
such counsel shall be full and c
respect of any action taken, suf
hereunder in good faith and in a
such counsel; and
i. shall not advise any person t
Exchange Offer as to whether to
portion of Old Notes or as to th
market value of any Old Notes th
Exchange Offer or as to the mark
et value of the New Notes.

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. You shall take such action a
s may from time to time be requested by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or its counsel (and such
other action as you may reasonably deem
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate) to furnish copies o
f the Prospectus, Letter of Transmittal and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notice of Guaranteed Delivery (a
s described in the Prospectus) or such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forms as may be approved from ti
me to time by the Company, to all persons
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requesting such documents and to
accept and comply with telephone requests for
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information relating to the Exch
ange Offer, provided that such information shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relate only to the procedures fo
r accepting (or withdrawing from) the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer and not on the merits of t
he Exchange Offer. The Company will furnish you
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with copies of such documents at
your request. All other requests for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information relating to the Exch
ange Offer shall be directed to the Company,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Treasurer.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. You shall advise by facsimil
e transmission or telephone, and promptly
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter confirm in writing to
the Treasurer of the Company and such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person or persons as the Company
may request, daily (and more frequently during
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the week immediately preceding t
he Expiration Date and if otherwise reasonably
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested) up to and including t
he Expiration Date, as to the principal amount
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Old Notes which have been ten
dered pursuant to the terms of the Exchange
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer and the items received by
you pursuant to the Exchange Offer and this
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement (separately reporting
and giving cumulative totals as to items
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properly received and items impr
operly received). In addition, you will also
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inform, and cooperate in making
available to, the Company or any such other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person or persons upon request m
ade from time to time prior to the Expiration
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date of such other information i
n your possession as it or he or she reasonably
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requests. Such cooperation shall
include, without limitation, the granting by
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql you to the Company and such pers
on as the Company may request, of access to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those persons on your staff who

are responsible for receiving tenders, in order
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to ensure that immediately prior
to the Expiration Date the Company shall have
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received information in sufficie
nt detail to enable it to decide whether to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extend the Exchange Offer. You s
hall prepare a final list of all persons whose
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tenders were accepted, the aggre
gate principal amount of Old Notes tendered and
f Old Notes accepted and deliver said list to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17. Letters of Transmittal, book
-entry confirmations and Notices of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranteed Delivery shall be sta
mped by you as to the date and the time of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt thereof and shall be pre
served by you for a period of time at least
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the period of time you
preserve other records pertaining to the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer of securities. You shal
l dispose of unused Letters of Transmittal and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other surplus materials by retur
ning them to the Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18. You hereby expressly waive a
ny lien, encumbrance or right of set-off
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whatsoever that you may have wit
h respect to funds deposited with you for the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of transfer taxes by rea
sons of amounts, if any, borrowed by the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, or any of its subsidiar
ies or affiliates pursuant to any loan or credit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement with you or for compen
sation owed to you hereunder.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19. For services rendered as Exc
hange Agent hereunder, you shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to such compensation as
set forth on Schedule I attached hereto.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20. You hereby acknowledge recei
pt of the Prospectus and the Letter of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transmittal and further acknowle
dge that you have examined each of them. Any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inconsistency between this Agree
ment, on the one hand, and the Prospectus and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Letter of Transmittal (as th
ey may be amended from time to time), on the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other hand, shall be resolved in
favor of the latter two documents, except with
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the duties, liabiliti
es and indemnification of you as Exchange Agent,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which shall be controlled by thi
s Agreement.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21. The Company covenants and ag
rees to indemnify and hold you harmless in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql your capacity as Exchange Agent
hereunder against any loss, liability, cost or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense, including attorneys' fe
es and expenses, arising out of or in connection
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with your acceptance or administ
ration of this Agreement and the performance of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its duties hereunder, including
without limitation any act, omission, delay or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refusal made by you in reliance
upon any signature, endorsement, assignment,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate, order, request, not
ice, instruction or other instrument or document
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably believed by you to be
valid, genuine and sufficient and in accepting
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any tender or effecting any tran
sfer of Old Notes reasonably believed by you in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good faith to be authorized, and
in delaying or refusing in good faith to accept
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any tenders or effect any transf
er of Old Notes; provided, however, that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall not be liable for
any indemnification or otherwise for any loss,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability, cost or expense to th
e extent arising out of your own negligence,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql willful misconduct or bad faith
or as a result of your acting or failing to act
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the instructions of the Com
pany arising out of or in connection with the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Offer, this Agreement o
r the administration of your duties hereunder,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including without limitation the
costs and expenses of defending and appealing
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against any action, proceeding,
suit or claim in the premises. In no case shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company be liable under this
indemnity with respect to any claim against you
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless the Company shall be noti
fied by you, by letter or by facsimile confirmed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by letter, of the written assert
ion of a claim against you or of any other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action commenced against you, pr
omptly after you shall have received any such
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written assertion or notice of c
ommencement of action. The Company shall be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to participate at its o
wn expense in the defense of any such claim or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other action, and, if the Compan
y so elects, the Company shall assume the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defense of any suit brought to e
nforce any such claim. In the event that the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company shall assume the defense
of any such suit, the Company shall not be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liable for the fees and expenses
of any additional counsel thereafter retained
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by you so long as the Company sh
all retain counsel reasonably satisfactory to

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql you to defend such suit, and so
long as you shall have not determined, in your
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable judgment, that a conf
lict of interest exists between you and the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22. You shall arrange to comply
with all requirements under the tax laws of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the United States, including tho
se relating to missing Tax Identification
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Numbers, and shall file any appr
opriate reports with the Internal Revenue
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service. You shall deliver or ca
use to be delivered, in a timely manner to each
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental authority to which
any transfer taxes are payable in respect of the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange of Old Notes, your chec
k in the amount of all transfer taxes so
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable, and the Company shall r
eimburse you for the amount of any and all
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer taxes payable in respec
t of the exchange of Old Notes; provided,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that you shall reimburs
e the Company for amounts refunded to you in
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect of your payment of any s
uch transfer taxes, at such time as such refund
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is received by you.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23. This Agreement and your appo
intment as Exchange Agent hereunder shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be governed by and construed in
accordance with the laws of the State of New
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York (including without limitati
on Section 5-1401 of the New York General
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations Law or any successor
to such statute) applicable to agreements made
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to be performed entirely wit
hin such state, and shall inure to the benefit
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, and the obligations created
hereby shall be binding upon, the successors and
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigns of each of the parties h
ereto.
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24. This Agreement may be execut
ed in two or more counterparts, each of
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which shall be deemed to be an o
riginal and all of which taken together shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute one and the same agre
ement.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25. In case any provision of thi
s Agreement shall be invalid, illegal or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unenforceable, the validity, leg
ality and enforceability of the remaining
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions shall not in any way

be affected or impaired thereby so long as the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql economic or legal substance of t
he agreements contained herein is not affected
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any manner adverse to any par
ty. Upon such determination that any terms or
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions or the application th
ereof is invalid, illegal or unenforceable, the
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties hereto shall negotiate i
n good faith to modify this Agreement so as to
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect the original intent of th
e parties as closely as possible in a mutually
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptable manner in order that
the agreements contained herein may be performed
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as originally contemplated to th
e fullest extent possible.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26. This Agreement shall not be
deemed or construed to be modified,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, rescinded, cancelled or
waived, in whole or in part, except by a
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written instrument signed by a d
uly authorized representative of the party to be
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charged. This Agreement may not
be modified orally.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27. Unless otherwise provided he
rein, all notices, requests and other
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communications to any party here
under shall be in writing (including facsimile
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or similar writing) and shall be
given to such party, addressed to it, at its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql address or telecopy number set f
orth below:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to the Company:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql c/o TXU Corp.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facsimile: (214) 812-2488
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Treasurer
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to the Exchange Agent:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 101 Barclay Street, 8W
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Facsimile: (212) 815-5707
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Remo J. Reale
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 28. Unless terminated earlier by
the parties hereto, this Agreement shall
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate 90 days following the
Expiration Date. Notwithstanding the foregoing,
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paragraphs 19, 21 and 23 shall s
urvive the termination of this Agreement. Upon
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any termination of this Agreemen
t, you shall promptly deliver to the Company any
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates for Notes, funds or
property then held by you as Exchange Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29. This Agreement shall be bind
ing and effective as of the date hereof.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Please acknowledge receipt of th
is Agreement and confirm the arrangements
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein provided by signing and r
eturning the enclosed copy.
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:____________________________
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accepted as of the date
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first above written:
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK, as Exchang
e Agent
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:__________________________
\page
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE I
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For Services By
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE BANK OF NEW YORK
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As Exchange Agent for
(the "Company")
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the exchange of the Company's
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.375% Senior Secured Notes due
2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 7.000% Senior Secured Notes
due 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.375% Exchange Senior Secured N
otes due 2012
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 7.000% Exchange Senior Secur
ed Notes due 2032
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fees............................
.........................................$5,000*
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * In addition, the Company will
pay the Exchange Agent an additional $500 for
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each extension of the Expiration
Date, reimburse the Exchange Agent for its
\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable attorney's fees and e
xpenses.
\par\pard\plain\fs16}

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\par\pard\intbl\plain \li400 \f3\fs30

\par\pard\intbl\plain\f3\fs20\ql\ul\li800{\field{\*\fldinst HYPERLINK \\l "doc_1

SECURITIES AND EXCHANGE COMMISSI

ROBERT A. WOOLDRIDGE, ESQ.

40 West 57th Street

t, for a period of 90 days after the

YSIS OF FINANCIAL CONDITION AND

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql files with the SEC at the SEC's

Notes due 2032

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXPIRATION DATE.................

If Oncor's belief is inaccurate,

BENEFICIAL OWNER ...............

documentation to The Bank of New

ACCEPTANCE OF OLD NOTES AND DELI

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not be a taxable event for

le to the Old Notes. The New Notes of each

Notes, interest will accrue from

majority of all outstanding secu

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by S&P and could result in a dow

h its direct and indirect subsidiaries.

in legislation passed during the 1999 session of

Texas. REPs provide electricity

sts and expenditures through efficiencies and

ll materially affect Oncor's net financial

x months ended June 30, 2002 represents the

actual results of operations and

SIX MONTHS ENDED JUNE 30,

(MILLIONS OF DOLLARS, EXCEPT RAT

\par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Capitalization ratios:

enues and results of operations are subject to

seasonality, weather conditions

these REPs to timely remit these

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql twelve months ended December 31,

d that it affirmed the ratings on TXU Corp. and

es) become unsecured, Oncor may incur secured

operation and construction

changes in tax laws and pol

changes in and compliance w

implementation of the 1999

legal and administrative pr

pending appeals of the PUCT's ap

weather conditions, other n

or other terrorist activities;

demand and demographic patterns;

changes in business strateg

commercial bank market and

competition for new busines

inability of various counte

respect to Oncor's financial ins

changes in technology used

significant changes in Onco

including the availability of qu

significant changes in crit

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 1, 2024 and all of its 8.

ts presented for periods prior to 2002. The

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MANAGEMENT'S DISCUSSION AND ANAL

r prior to January 1, 2002 present the

n could have differed materially from those

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Holdings' generation operations.

Interest expense and other charg

\par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest income of $23 million f

's transmission and distribution business