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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): FEBRUARY 4, 1997
HOUSTON LIGHTING & POWER COMPANY
(Exact name of registrant as specified in its charter)
TEXAS 1-3187 74-0694415
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 713/207-1111
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ITEM 5. OTHER EVENTS.
On January 30, 1997, Houston Lighting & Power Company (the "Company")
and HL&P Capital Trust I ("Capital Trust I") entered into an Underwriting
Agreement covering the issue and sale by Capital Trust I of 10,000,000 8.125%
Trust Preferred Securities (the "Preferred Securities"), Series A (liquidation
amount $25 per Preferred Security). The Preferred Securities were registered
under the Securities Act of 1933, as amended, pursuant to the shelf registration
statement (Registration Statement Nos. 333-20069, 333-20069-01, 333-20069-02,
333-20069-03, and 333-20069-04) of the Company, Capital Trust I, HL&P Capital
Trust II ("Capital Trust II"), HL&P Capital Trust III and HL&P Capital Trust IV
(the "Registration Statement").
On January 30, 1997, the Company and Capital Trust II entered into an
Underwriting Agreement covering the issue and sale by Capital Trust II of
100,000 8.257% Capital Securities (the "Capital Securities"), Series B
(liquidation amount $1,000 per Capital Security). The Capital Securities were
registered under the Securities Act of 1933, as amended, pursuant to the
Registration Statement.
ITEM 7. FINANCIAL STATEMENTS, AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
1.1 Underwriting Agreement, dated as of January 30, 1997, among the
Company, Capital Trust I and Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Dean Witter Reynolds Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation, A.G. Edwards
& Sons, Inc., PaineWebber Incorporated, Prudential Securities
Incorporated and Smith Barney Inc., as Representatives of the
Underwriters set forth therein.
1.2 Underwriting Agreement, dated as of January 30, 1997, among the
Company, Capital Trust II and Goldman, Sachs & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
4.1 Junior Subordinated Debenture Indenture, dated as of February 1,
1997, between the Company and The Bank of New York, as Trustee.
4.2-A Supplemental Indenture No. 1, dated as of February 1, 1997,
providing for the issuance of the Company's 8.125% Junior
Subordinated Deferrable Interest Debentures, Series A, due
March 31, 2046.
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4.2-B Supplemental Indenture No. 2, dated as of February 1, 1997,
providing for the issuance of the Company's 8.257% Junior
Subordinated Deferrable Interest Debentures, Series B, due
February 1, 2037.
4.3-A Amended and Restated Trust Agreement, dated as of February 4,
1997, of Capital Trust I.
4.3-B Amended and Restated Trust Agreement, dated as of February 4,
1997, of Capital Trust II.
4.4-A Form of Preferred Security of Capital Trust I (included in
Exhibit 4.3-A above).
4.4-B Form of Capital Security of Capital Trust II (included in
Exhibit 4.3-B above).
4.5-A Form of 8.125% Junior Subordinated Deferrable Interest
Debenture, Series A (included in Exhibit 4.2-A above).
4.5-B Form of 8.257% Junior Subordinated Deferrable Interest
Debenture, Series B (included in Exhibit 4.2-B above).
4.6-A Guarantee Agreement, dated as of February 4, 1997, relating to
Capital Trust I.
4.6-B Guarantee Agreement, dated as of February 4, 1997, relating to
Capital Trust II.
4.7-A Agreement as to Expenses and Liabilities relating to Capital
Trust I (included in Exhibit 4.3-A above).
4.7-B Agreement as to Expenses and Liabilities relating to Capital
Trust II (included in Exhibit 4.3-B above).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOUSTON LIGHTING & POWER COMPANY
Date: February 12, 1997 By: /s/ MARY P. RICCIARDELLO
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Mary P. Ricciardello
Vice President and Comptroller
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EXHIBIT 1.1
HL&P CAPITAL TRUST I
8.125% Trust Preferred Securities, Series A
guaranteed to the extent set forth in the Guarantee by
Houston Lighting & Power Company
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Underwriting Agreement
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January 30, 1997
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Dean Witter Reynolds Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
As Representatives of the Underwriters
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
HL&P Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), and Houston Lighting & Power
Company, a Texas corporation, as depositor of the Trust and as guarantor (the
"Guarantor"),propose, subject to the terms and conditions stated herein, that
the Trust issue and sell to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an aggregate of $250,000,000 liquidation amount of 8.125% Trust
Preferred Securities, Series A (liquidation amount $25 per trust preferred
security) (the "Securities") representing undivided beneficial interests in the
assets of the Trust, guaranteed by the Guarantor as to the payment of
distributions, and as to payments on liquidation or redemption, to the extent
set forth in a guarantee agreement (the "Guarantee") among the Guarantor and The
Bank of New York, as trustee (the "Guarantee Trustee"). The proceeds of the sale
of the Securities and an aggregate of $7,732,000 liquidation amount of its
Common Securities (liquidation amount $25 per common security) (the
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"Common Securities") by the Trust are to be invested in Junior Subordinated
Debentures, Series A (the "Subordinated Debentures") of the Guarantor to be
issued pursuant to a Junior Subordinated Indenture (the "Indenture") among the
Guarantor and The Bank of New York, as trustee (the "Debenture Trustee").
1. Representations and Warranties of the Guarantor and the Trust.
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(a) The Guarantor and the Trust jointly and severally represent and
warrant to, and agree with, each of the Underwriters that:
(i) A registration statement on Form S-3 with respect to the
Securities, the Subordinated Debentures and the Guarantee (File Nos. 333-20069
and 333-20069-01) including a prospectus (any preliminary prospectus included in
such registration statement being hereinafter referred to as a "Preliminary
Prospectus"), copies of which have been delivered to you, has been prepared and
filed by the Guarantor and the Trust with the Securities and Exchange Commission
(the "Commission") and has been declared effective under the Securities Act of
1933, as amended (the "Act"). No stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for that purpose
has been initiated or, to the best knowledge of the Guarantor and the Trust,
threatened by the Commission. Such registration statement (including all
documents filed as part thereof or incorporated by reference therein, but
excluding any Forms T-1, as amended), as amended and supplemented at the date of
this Agreement is hereinafter referred to as to the "Registration Statement."
The Prospectus contained in the Registration Statement at the time that the
Registration Statement was declared effective is hereinafter referred to as the
"Basic Prospectus."
The prospectus included in the Registration Statement, as amended
and supplemented to the date of this Agreement (including all documents then
incorporated by reference therein and including the Preliminary Supplemented
Prospectus (hereinafter defined) as further supplemented by the Final
Supplemented Prospectus (hereinafter defined)), is hereinafter referred to as
the "Prospectus". Any reference herein to the Registration Statement, the
Prospectus, a Preliminary Prospectus, the Basic Prospectus, the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein, or deemed
to be incorporated by reference therein, and filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the date of such
Registration Statement, Prospectus, Preliminary Prospectus, the Basic
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Prospectus, the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus. Any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include, without limitation, the filing of any
document under the Exchange Act deemed to be incorporated therein by reference
after the date of such Registration Statement or Prospectus.
A prospectus supplement, dated, subject to completion, January 27,
1997, as supplemented and amended, is hereinafter called the "Preliminary
Supplemented Prospectus". A prospectus supplement, dated the date hereof,
setting forth the terms of the Securities and of their sale and distribution
(the "Final Supplemented Prospectus") has been prepared and will be filed
pursuant to Rule 424(b) under the Act ("Rule 424(b)").
(ii) On the effective date of the Registration Statement, the
Registration Statement, as amended and supplemented at that time, conformed in
all material respects to the requirements of the Act and the Trust Indenture Act
of 1939, as amended (the "TIA"), and the applicable rules and regulations of the
Commission thereunder, and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; on the date of the
Preliminary Supplemented Prospectus, the Preliminary Supplemented Prospectus
conformed in all material respects to the requirements of the Act and the TIA
and the applicable rules and regulations of the Commission thereunder, and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; and on the date of this Agreement, the Registration
Statement and the Prospectus conform, and at the Time of Delivery (hereinafter
defined) they will conform, in all material respects to the requirements of the
Act and the TIA and the applicable rules and regulations of the Commission
thereunder, and on the date of this Agreement do not, and on the Time of
Delivery will not, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(iii) Each document filed or to be filed pursuant to the Exchange
Act and incorporated by reference, or deemed to be incorporated by reference in
the Prospectus (including any document to be filed pursuant to the Exchange Act
which will constitute an amendment to the Prospectus) conformed or, when so
filed, will conform in all material respects to
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the requirements of the Exchange Act and the applicable rules and regulations of
the Commission thereunder, and none of such documents included or, when so
filed, will include any untrue statement of a material fact or omitted or, when
so filed, will omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(iv) The Trust has been duly created and is validly existing as a
business trust in good standing under the laws of the State of Delaware, with
power and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus and, based on expected operations and
law in effect on the date hereof, the Trust will be classified as a grantor
trust and will not be classified as an association taxable as a corporation for
United States federal income tax purposes;
(v) This Agreement has been duly authorized, executed and delivered
by the Guarantor and the Trust;
(vi) The Securities have been duly authorized by the Trust
Agreement (as defined below), and, when issued and delivered pursuant to this
Agreement, such Securities will be duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust entitled to the benefits
provided by the Amended and Restated Trust Agreement (the "Trust Agreement")
among the Guarantor and the Trustees named therein (the "Trustees") (subject to
the terms of the Trust Agreement); provided that the holders of the Securities
("the Securityholders") may be obligated, pursuant to the Trust Agreement, to
(a) provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of Securities
certificates and the issuance of replacement Securities certificates and (b)
provide security and indemnity in connection with requests of or directions to
the Property Trustee (as defined in the Trust Agreement) to exercise its rights
and remedies under the Trust Agreement; and the Securities conform to the
description thereof contained in the Final Supplemented Prospectus;
(vii) The Securityholders will be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware;
(viii) The Common Securities have been duly authorized by the Trust
Agreement, and upon delivery by the Trust to the Guarantor against payment
therefor as set forth
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in the Trust Agreement, will be duly and validly issued and undivided beneficial
interests in the assets of the Trust and conform to the description thereof
contained in the Final Supplemented Prospectus; the issuance of the Common
Securities of the Trust is not subject to preemptive or other similar rights;
and at the Time of Delivery, all of the issued and outstanding Common Securities
will be directly owned by the Guarantor free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(ix) The Guarantee, the Trust Agreement, the Subordinated
Debentures, the Indenture and the Agreement as to Expenses and Liabilities
between the Guarantor and the Trust (the "Expense Agreement") (the Guarantee,
the Trust Agreement, the Subordinated Debentures, the Indenture and the Expense
Agreement being collectively referred to as the "Guarantor Agreements") have
each been duly authorized by the Guarantor and when validly executed and
delivered by the Guarantor and, in the case of the Guarantee, by the Guarantee
Trustee, in the case of the Trust Agreement, by the Trustees and, in the case of
the Indenture, by the Debenture Trustee, and, in the case of the Subordinated
Debentures, when validly issued by the Guarantor and duly authenticated and
delivered by the Debenture Trustee, will constitute valid and legally binding
obligations of the Guarantor and the respective trustees, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); the Subordinated Debentures when validly issued by the
Guarantor and duly authenticated and delivered by the Debenture Trustee, will be
entitled to the benefits of the Indenture; and the Guarantor Agreements conform
to the descriptions thereof in the Final Supplemented Prospectus;
(x) The issue and sale of the Securities by the Trust, the
compliance by the Trust with all of the provisions of this Agreement, the
Securities and the Trust Agreement, the purchase of the Subordinated Debentures
by the Trust, the execution, delivery and performance by the Trust of the Trust
Agreement and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Trust is a party or by which the Trust is bound or to which any of the property
or assets of the Trust is subject, nor will such action result in any violation
of the provisions of the
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Trust Agreement or any existing statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Trust or any
of its properties; the Commission has issued an order under the Act declaring
the Registration Statement effective and qualifying the Guarantee, the Trust
Agreement and the Indenture under the TIA and no other consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Securities
and the Common Securities by the Trust, the purchase of the Subordinated
Debentures by the Trust or the consummation by the Trust of the transactions
contemplated by this Agreement, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(xi) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with all of the
provisions of this Agreement, the Guarantee, the Subordinated Debentures, the
Trust Agreement, the Indenture and the Expense Agreement, the execution,
delivery and performance by the Guarantor of the Guarantor Agreements, and the
consummation of the transactions contemplated herein and therein will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument for borrowed money to
which the Guarantor or any Significant Subsidiary (as defined by Regulation S-X)
of the Guarantor (each, a "Significant Subsidiary") is a party or by which the
Guarantor or any Significant Subsidiary is bound or to which any of the property
or assets of the Guarantor or any Significant Subsidiary is subject, nor will
such action result in any violation of the provisions of the Restated Articles
of Incorporation or Amended and Restated By-laws of the Guarantor or any
existing statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Guarantor or any of its or its
Significant Subsidiaries' properties; the Commission has issued an order under
the Act declaring the Registration Statement effective and qualifying the
Guarantee, the Trust Agreement and the Indenture under the TIA and no other
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue of
the Guarantee or the Subordinated Debentures or the consummation by the
Guarantor of the other transactions contemplated by this Agreement or the
Guarantor Agreements, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws
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in connection with the issuance by the Guarantor of the Guarantee and the
Subordinated Debentures;
(xii) The Trust is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
2. Sale and Delivery.
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(a) Subject to the terms and conditions herein set forth, the
Guarantor and the Trust agree to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Trust, at a purchase price of 100% of the liquidation amount thereof, the
liquidation amount of Securities set forth opposite the name of such
Underwriters in Schedule I hereto.
(b) As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Securities will be issued by the Trust to purchase the Subordinated Debentures
of the Guarantor, the Guarantor hereby agrees to pay at the Time of Delivery to
Goldman, Sachs & Co., for the accounts of the several Underwriters, an amount
equal to $0.7875 per Security for the Securities to be delivered at the Time of
Delivery by wire transfer of Federal (same-day) funds. The total aggregate
amount of the Underwriters' compensation is $7,875,000.
(c) The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Trust with The Depository Trust
Company ("DTC") or its designated custodian. The Trust will deliver the
Securities to Goldman, Sachs & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same day) funds to a commercial bank account located
in the United States and designated in writing at least forty-eight hours prior
to the Time of Delivery by the Guarantor to Goldman, Sachs & Co., by causing DTC
to credit the Securities to the account of Goldman, Sachs & Co. at DTC. The
Trust will cause the global certificates representing the Securities to be made
available to Goldman, Sachs & Co. for checking at least twenty-four hours prior
to the Time of Delivery at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall be
9:30 a.m., New York City time,
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on Tuesday, February 4, 1997 or such other time and date as Goldman, Sachs & Co.
and the Guarantor may agree upon in writing. Such time and date are herein
called the "Time of Delivery".
(d) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 5 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 5(j) hereof, will be delivered at such time and
date at the offices of Dewey Ballantine, 1301 Avenue of the Americas, New York,
New York 10019 or such other location as Goldman, Sachs & Co. and the Guarantor
may agree in writing (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery. A meeting will
be held at the Closing Location at 1:00 p.m., New York City time or at such
other time as Goldman, Sachs & Co. and the Guarantor may agree in writing, on
the New York Business Day next preceding the Time of Delivery, at which meeting
the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes
of this Section 2, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
3. Covenants and Agreements.
-------------------------
The Guarantor and the Trust jointly and severally covenant and agree
with each of the Underwriters:
(a) That the Guarantor will furnish without charge to the
Underwriters a copy of the Registration Statement, including all documents
incorporated by reference therein and exhibits filed with the Registration
Statement (other than exhibits which are incorporated by reference and have
previously been so furnished), and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, the Preliminary Supplemented Prospectus
and the Final Supplemented Prospectus, any documents incorporated by reference
therein at or after the date thereof (including documents from which information
has been so incorporated) and any supplements and amendments thereto as each
Underwriter may reasonably request so long as such Underwriter is required to
deliver a prospectus;
(b) That the Guarantor will cause the Final Supplemented Prospectus
to be filed pursuant to, and in compliance with, Rule 424(b) and will promptly
advise the Underwriters (i) when any amendment to the Registration Statement
shall have been filed; provided, that, with
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respect to documents filed pursuant to the Exchange Act and incorporated by
reference into the Registration Statement, such notice shall only be required
during such time as the Underwriters are required in the reasonable opinion of
Dewey Ballantine, counsel for the Underwriters, to deliver a prospectus, (ii) of
any request by the Commission for any amendment of the Registration Statement,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose, and (iv) of the receipt by the Guarantor or the
Trust of any notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. So long as any Underwriter is required in the
reasonable opinion of Dewey Ballantine to deliver a prospectus, the Guarantor
will not file any amendment to the Registration Statement or supplement to the
Prospectus unless the Guarantor has furnished one copy of such amendment or
supplement to Goldman, Sachs & Co. and to Dewey Ballantine, and, if such
amendment or supplement is to be filed on or prior to the Time of Delivery, or
under circumstances where the Underwriters are required in the reasonable
opinion of Dewey Ballantine, to deliver a Prospectus, the Underwriters or Dewey
Ballantine, shall not reasonably have objected thereto. If the Commission shall
issue a stop order suspending the effectiveness of the Registration Statement,
the Guarantor will take such steps to obtain the lifting of that order as in the
best judgment of the Guarantor are not contrary to the interests of the
Guarantor;
(c) That if, at any time when in the reasonable opinion of Dewey
Ballantine the Prospectus is required by law to be delivered by an Underwriter
or a dealer, any event shall occur as a result of which it is necessary, in the
reasonable opinion of Dewey Ballantine or counsel for the Guarantor, to amend or
supplement the Prospectus or modify the information incorporated by reference
therein in order to make the statements therein, in light of the circumstances
existing when the Prospectus is delivered to a purchaser, not misleading, or if
it shall be necessary in the reasonable opinion of any such counsel, to amend or
supplement the Prospectus or modify such information to comply with law, the
Guarantor will forthwith (i) prepare and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses the Underwriters will
furnish to the Guarantor) to whom Securities may have been sold by the
Underwriters and to any other dealers upon reasonable request, either amendments
or supplements to the Prospectus or (ii) file with the Commission documents
incorporated by reference in the Prospectus, which shall be so supplied to the
Underwriters and such dealers, in either
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case so that the statements in the Prospectus as so amended, supplemented or
modified will not, in light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will comply
with law;
(d) That the Guarantor will endeavor to qualify, at its expense, the
Securities, and, to the extent required or advisable, the Guarantee and the
Subordinated Debentures, for offer and sale under the securities or Blue Sky
laws of such jurisdictions as the Underwriters shall reasonably request and to
pay all filing fees, reasonable expenses and legal fees in connection therewith
and in connection with the determination of the eligibility for investment of
the Securities; provided, that the Guarantor shall not be required to qualify as
a foreign corporation or a dealer in securities or to file any consents to
service of process under the laws of any jurisdiction;
(e) That the Guarantor will make generally available to its security
holders and the Securityholders as soon as practicable an earnings statement of
the Guarantor covering a twelve-month period beginning after the Time of
Delivery which shall satisfy the provisions of Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including Rule 158 under the
Act).
(f) That during the period beginning on the date of this Agreement
and continuing to and including the Time of Delivery, the Guarantor and the
Trust will not offer, sell, contract to sell or otherwise dispose of any
Securities, any security convertible into or exchangeable into or exercisable
for Securities or Subordinated Debentures or any debt securities substantially
similar to the Subordinated Debentures or equity securities substantially
similar to the Securities (except for the Subordinated Debentures and the
Securities issued pursuant to this Agreement), without the prior written consent
of the Underwriters.
(g) That the Guarantor and the Trust will use best efforts to effect
the listing of the Securities on the New York Stock Exchange; if the Securities
are exchanged for Subordinated Debentures, the Guarantor will use its best
efforts to effect the listing of the Subordinated Debentures on any exchange on
which the Securities are then listed.
4. Expenses.
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The Guarantor and the Trust jointly and severally covenant and agree
with the several Underwriters that the Guarantor and the Trust will pay or cause
to be paid the following: (i) all expenses in connection with the
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preparation, printing and filing of the Registration Statement as originally
filed and of each amendment thereto; (ii) the fees, disbursements and expenses
of the Guarantor's or the Trust's counsel and accountants in connection with the
issue of the Securities and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, the Prospectus,
the Preliminary Supplemented Prospectus, the Final Supplemented Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (iii) all reasonable expenses in
connection with the qualification of the Securities, the Guarantees and the
Subordinated Debentures issuable upon exchange of the Securities, for offering
and sale under state securities laws as provided in Section 3(d) hereof,
including the reasonable fees and disbursements of counsel for the Underwriters
in connection with such qualification and in connection with the Blue Sky and
legal investment surveys; (iv) any fees charged by securities rating services
for rating the Securities and the Subordinated Debentures; (v) the cost of
preparing the Securities and the Subordinated Debentures; (vi) the fees and
expenses of the Trustees, the Guarantee Trustee and the Debenture Trustee and
any agent of the Trustees, the Guarantee Trustee and the Debenture Trustee and
the fees and disbursements of counsel for the Trustees in connection with the
Trust Agreement and the Securities, counsel for the Guarantee Trustee in
connection with the Guarantee and counsel for the Debenture Trustee in
connection with the Indenture and the Subordinated Debentures; (vii) the fees
and disbursements of Delaware counsel to the Trust; (viii) the fees and expenses
incurred in connection with the listing of the Securities and, if applicable,
the Subordinated Debentures on the New York Stock Exchange; and (ix) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 6
and 9 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel and any advertising expenses connected with
any offers they may make.
5. Conditions of Underwriters' Obligations.
----------------------------------------
The obligations of the Underwriter hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof and
at and as of the Time of Delivery, of the representations and warranties made
herein by the Guarantor and the Trust, to compliance at and as of the Time of
Delivery by the Guarantor and the Trust with their covenants and agreements
herein contained and the other provisions hereof to be satisfied at or prior to
the
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Time of Delivery, and to the following additional conditions:
(a) (i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose
shall be pending before or threatened by the Commission, and the Underwriters
shall have received on and as of the Time of Delivery, a certificate dated such
date, signed by an executive officer of the Guarantor or an authorized agent of
the Guarantor designated as such by the Board of Directors of the Guarantor to
the foregoing effect, and (ii) there shall have been no material adverse change
in or affecting the business, properties or financial condition of the Guarantor
or the Trust from that set forth in or contemplated by the Registration
Statement at the time it became effective, except as set forth in or
contemplated by the Prospectus, and the Underwriters shall have received on and
as of the Time of Delivery, a certificate dated such date, signed by an
executive officer of the Guarantor or an executive officer of Houston Industries
Incorporated ("Houston Industries") to the foregoing effect. The officers or
agents making such certificates may rely upon the best of his knowledge as to
proceedings pending or threatened.
(b) Dewey Ballantine, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters. In giving such opinion, such counsel may
rely (i) as to matters of Texas law and the exemption of Houston Industries
under the 1935 Act (as defined herein) upon the opinions of Baker & Botts,
L.L.P. referred to in (d) below and Hugh Rice Kelly or such other counsel
referred to in (c) below and (ii) as to matters of Delaware law upon the opinion
of Richards, Layton & Finger referred to in (e) below.
(c) Hugh Rice Kelly, Executive Vice President, General Counsel, and
Corporate Secretary for the Guarantor, shall have furnished to you his written
opinion, dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Guarantor has been duly incorporated and is validly
existing in good standing under the laws of the State of Texas and has corporate
power and authority to enter into and perform its obligations under this
Agreement and the Guarantor Agreements;
(ii) No consent, approval, authorization or other order of, or
registration with, any governmental
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regulatory body (other than such as may be required under applicable securities
laws, as to which such counsel need not express an opinion) is required for the
issuance and sale of the Securities being delivered at the Time of Delivery or
the issuance of the Guarantee and the Subordinated Debentures or the
consummation by the Trust or the Guarantor of the transactions contemplated by
this Agreement and the Guarantor Agreements;
(iii) To the best of such counsel's knowledge and other than as
set forth or contemplated in the Prospectus, there are no legal or governmental
proceedings pending or threatened to which Guarantor is subject, which,
individually or in the aggregate, are expected to have a material adverse effect
on the financial position, shareholders' equity or results of operations of the
Guarantor;
(iv) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures and the execution, delivery and performance by the
Guarantor of this Agreement and the Guarantor Agreements will not result in the
breach or violation of, or constitute a default under, the Restated Articles of
Incorporation or the Amended and Restated Bylaws of the Guarantor, each as
amended to date, any indenture, mortgage, deed of trust or other agreement or
instrument for borrowed money to which the Guarantor is a party or by which it
is bound or to which its property is subject or any law, order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Guarantor or its property, in any manner which would have a material adverse
effect on the business of the Guarantor; and
(v) The description of statutes and regulations set forth in Part
I of the Guarantor's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 under the captions "Business--Regulatory Matters--Rates and
Services" and "--Environmental Quality" fairly describe in all material
respects the portions of the statutes and regulations addressed thereby.
(d) Baker & Botts, L.L.P., counsel for the Guarantor and the Trust,
shall have furnished to you their written opinion, dated the Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) Such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are not so
described and filed;
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(ii) The statements set forth in the Final Supplemented
Prospectus under the captions "Certain Terms of Series A Preferred Securities",
"Certain Terms of Series A Subordinated Debentures", "Certain Terms of Series A
Guarantee" and in the Basic Prospectus under the captions "Description of
Securities", "Description of Junior Subordinated Debentures", "Description of
Guarantees" and "Relationship Among the Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreement and the Guarantees", accurately
summarize in all material respects the terms of the Securities, the Trust
Agreement, the Subordinated Debentures, the Expense Agreement and the Guarantee;
(iii) The Securities, the Subordinated Debentures and the
Guarantee conform as to legal matters in all material respects to the
descriptions thereof contained in the Final Supplemented Prospectus, including,
without limitation, under the captions "Certain Terms of Series A Preferred
Securities", "Certain Terms of Series A Subordinated Debentures", and "Certain
Terms of Series A Guarantee" and in the Basic Prospectus under the captions
"Description of Junior Subordinated Debentures", "Description of Securities",
"Description of Guarantees", and "Relationship Among the Securities, the
Corresponding Junior Subordinated Debentures, the Expense Agreement and the
Guarantees", respectively;
(iv) The Subordinated Debentures are in the form prescribed in or
pursuant to the Indenture, have been duly and validly authorized by all
necessary corporate action on the part of the Guarantor and, when executed and
delivered by the Guarantor and authenticated by the Debenture Trustee as
specified in or pursuant to the Indenture, will be valid and binding obligations
of the Guarantor, enforceable in accordance with their terms, except as such
enforceability is subject to the effect of any applicable bankruptcy,
insolvency, reorganization or other law relating to or affecting creditors'
rights generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); the Guarantee
has been duly and validly authorized by all necessary corporate action on the
part of the Guarantor; the Guarantee has been duly and validly executed and
delivered by the Guarantor and (assuming due authorization, execution and
delivery by the Trustee thereunder) constitutes the valid and binding obligation
of the Guarantor, enforceable in accordance with its terms, except as such
enforceability is subject to the effect of any applicable bankruptcy,
insolvency, reorganization or other law relating to or affecting creditors'
rights generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in
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equity or at law); the Trust Agreement, the Indenture and the Expense Agreement
have each been duly authorized, executed and delivered by the Guarantor and,
when executed and delivered by the other parties thereto, will constitute valid
and binding obligations of the Guarantor, enforceable in accordance with their
respective terms, except as such enforceability is subject to the effect of any
applicable bankruptcy, insolvency, reorganization or other law relating to or
affecting creditors' rights generally and to general principles of equity
(regardless of whether such enforceability is considered in proceeding in equity
or at law);
(v) The Guarantee, the Trust Agreement and the Indenture have
been duly qualified under the TIA;
(vi) Based upon the timely filing by Houston Industries
Incorporated, a Texas corporation ("Houston Industries"), with the Commission of
an exemption statement pursuant to Rule 2 under the Public Utility Holding
Company Act of 1935 ("1935 Act") which, to the best of the knowledge of such
counsel, is not the subject of any notification provided for in Rule 6 under the
1935 Act, Houston Industries is exempt from the provisions of the 1935 Act
except Sections 9(a)(2), 32 and 33 thereof;
(vii) The Trust is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act (in giving such opinion counsel may reference specified
"no-action" letters);
(viii) The Registration Statement has become effective under the
Act, and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted and are pending or are
threatened by the Commission under the Act; the Registration Statement, as of
its effective date, and the Final Supplemented Prospectus, as of January 30,
1997, (except for (A) the operating statistics, financial statements and
financial statement schedules contained or incorporated by reference therein or
omitted therefrom (including the auditors' reports on the financial statements
and the notes to the financial statements), (B) the other financial and
statistical information contained or incorporated by reference therein or
omitted therefrom and (C) the exhibits thereto, as to which such counsel need
not express an opinion) complied as to form in all material respects with the
requirements of Form S-3 under the Act and the applicable rules and regulations
of the Commission thereunder, and each document incorporated by reference
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therein as originally filed pursuant to the Exchange Act (except for (A) the
operating statistics, financial statements and financial statement schedules
contained or incorporated by reference therein or omitted therefrom (including
the auditors' reports on the financial statements and the notes to the financial
statements), (B) the other financial and statistical information contained or
incorporated by reference therein or omitted therefrom and (C) the exhibits
thereto, as to which such counsel need not express an opinion) when so filed
complied as to form in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder; and
(ix) The execution, delivery and performance by the Guarantor of
this Agreement have been duly authorized by all necessary corporate action on
the part of the Guarantor, and this Agreement has been duly executed and
delivered by the Guarantor.
In addition, such counsel shall state that no facts have come to the
attention of such counsel that lead them to believe that the Registration
Statement (except for (A) the operating statistics, financial statements and
financial statement schedules contained or incorporated by reference therein
(including the auditors' reports on the financial statements and the notes to
the financial statements, except to the extent that such notes describe legal or
governmental proceedings to which the Company is a party and are incorporated by
reference into one or more items of a report that is incorporated by reference
in the Registration Statement or the Prospectus, other than an item that
requires that financial statements be provided), (B) the other financial and
statistical information contained or incorporated by reference therein and (C)
the exhibits thereto, as to which such counsel need not comment) as of the time
such Registration Statement became effective, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as amended, supplemented or modified by the filing of a document
incorporated by reference therein if so amended, supplemented or modified
(except for (A) the operating statistics, financial statement and financial
statement schedules contained or incorporated by reference therein (including
the auditors' reports on the financial statements and the notes to the financial
statements, except to the extent that such notes describe legal or governmental
proceedings to which the Guarantor is a party and are incorporated by reference
into one or more items of a report that is incorporated by reference in the
Prospectus, other than an item that requires that financial statements be
provided), (B) the other financial and statistical information contained or
incorporated by
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reference therein and (C) the exhibits thereto, as to which such counsel need
not comment), as of the date of the Final Supplemented Prospectus contained, or
as of the Time of Delivery contains, any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(e) Richards, Layton & Finger, special Delaware counsel for the
Guarantor and the Trust, shall have furnished to you their written opinion,
dated the Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made;
(ii) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority to own property and
conduct its business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and legally binding
obligation of the Guarantor and the Trustees, and is enforceable against the
Guarantor and the Trustees, in accordance with its terms, subject, as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, fraudulent transfer and conveyance, reorganization, moratorium,
receivership, liquidation and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution;
(iv) Under the Delaware Business Trust Act, the Original Trust
Agreement (as defined in the Trust Agreement) and the Trust Agreement, the Trust
has the trust power and authority to (a) execute and deliver, and to perform its
obligations under this Agreement and (b) issue and perform its obligations under
the Securities and the Common Securities;
(v) Under the Delaware Business Trust Act, the Original Trust
Agreement and the Trust Agreement, the execution and delivery by the Trust of
this Agreement, and
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the performance by the Trust of its obligations hereunder, have been duly
authorized by all necessary trust action on the part of the Trust;
(vi) Under the Delaware Business Trust Act,the Original Trust
Agreement and the Trust Agreement, the Agreement has been duly executed by the
Trust;
(vii) The Securities have been duly authorized by the Trust
Agreement and are duly and validly issued and, subject to the qualifications set
forth herein, fully paid and non-assessable undivided beneficial interests in
the assets of the Trust and are entitled to the benefits provided by the Trust
Agreement (subject to the terms of the Trust Agreement); provided that such
counsel may note that the Securityholders may be obligated, pursuant to the
Trust Agreement, to (a) provide indemnity and/or security in connection with and
pay taxes or governmental charges arising from transfers or exchanges of Capital
Securities Certificates and the issuance of replacement Capital Securities
Certificates and (b) provide security and indemnity in connection with requests
of or directions to the Property Trustee (as defined in the Trust Agreement) to
exercise its rights and remedies under the Trust Agreement. The Securityholders,
as beneficial owners of the Trust, are entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
(viii) The Common Securities of the Trust have been duly
authorized by the Trust Agreement and are validly issued and fully paid
undivided beneficial interests in the assets of the Trust;
(ix) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Securities and the Common Securities is not
subject to preemptive rights;
(x) The issuance and sale by the Trust of the Securities and the
Common Securities, the execution, delivery and performance by the Trust of this
Agreement, the consummation by the Trust of the transactions contemplated by
this Agreement and the Trust Agreement and compliance by the Trust with its
obligations thereunder do not violate (a) any of the provisions of the
Certificate of Trust of the Trust or the Trust Agreement, or (b) any applicable
Delaware law or administrative regulation;
(xi) Such counsel has reviewed the statements in the Basic
Prospectus under the caption "The Issuers" and the statements in the Preliminary
Supplemented Prospectus and Final Supplemented Prospectus under the caption
"HL&P
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Capital Trust I" and, insofar as they contain statements of Delaware law, such
statements are fairly presented;
(xii) No authorization, approval, consent or order of any
Delaware court or Delaware governmental authority or Delaware agency is required
to be obtained by the Trust solely in connection with the issuance and sale of
the Securities and the Common Securities. (In rendering the opinion expressed in
this paragraph (xii), such counsel need express no opinion concerning the
securities laws of the State of Delaware.); and
(xiii) Assuming that (i) the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the filing of
documents with the Secretary of State of the State of Delaware) or employees in
the State of Delaware, and (ii) the Trust is treated as a grantor trust for
federal income tax purposes, the Securityholders (other than those holders of
the Securities who reside or are domiciled in the State of Delaware) will have
no liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust, and the Trust will not be liable for
any income tax imposed by the State of Delaware.
(f) Baker & Botts, L.L.P., special tax counsel for the Guarantor and
the Trust, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that such
firm confirms its opinion set forth in the Final Supplemented Prospectus under
the caption "Certain Federal Income Tax Consequences".
(g) At the time of execution of this Agreement, Deloitte & Touche LLP
shall have furnished to you a letter dated the date of such execution,
substantially in the form heretofore supplied and deemed satisfactory to you.
(h) At the Time of Delivery, Deloitte & Touche LLP shall have
furnished you a letter, dated the Time of Delivery, to the effect that such
accountants reaffirm, as of the Time of Delivery and as though made on the Time
of Delivery, the statements made in the letter furnished by such accountants
pursuant to paragraph (g) of this Section 5, except that the specified date
referred to in such letter will be a date not more than five business days prior
to the Time of Delivery.
(i) A Special Event (as defined in the Final Supplemented Prospectus,
except that the reference to effectiveness or announcement on or after the date
of issuance of the Securities shall be deemed a reference to
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effectiveness or announcement on or after the date of this Agreement) shall not
have occurred and be continuing.
(j) The Guarantor and the Trust shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the
Guarantor or an authorized agent of the Guarantor designated as such by the
Board of Directors of the Guarantor and of administrators of the Trust
satisfactory to you as to the accuracy of the representations and warranties of
the Guarantor and the Trust herein at and as of the Time of Delivery, as to the
performance by the Guarantor and the Trust of all of their respective
obligations hereunder to be performed at or prior to the Time of Delivery, as to
the matters set forth in the introductory paragraph to this Section 5 and
subsection (a) of this Section and as to such other matters as you may
reasonably request.
6. Indemnification and Contribution.
---------------------------------
(a) The Guarantor and the Trust, jointly and severally, agree to
indemnify and hold harmless each Underwriter, and each person, if any, who
controls each Underwriter within the meaning of the Act or the Exchange Act,
against any losses, claims, damages, liabilities or expenses (including the
reasonable cost of investigating and defending against any claims therefore and
counsel fees incurred in connection therewith), joint or several, which may be
based upon either the Act, or the Exchange Act, or any other statute or at
common law, on the ground or alleged ground that any Preliminary Supplemented
Prospectus, Final Supplemented Prospectus, Preliminary Prospectus, the
Registration Statement, the Basic Prospectus or the Prospectus (or any such
document, as from time to time amended, or deemed to be amended, supplemented or
modified) includes or allegedly includes an untrue statement of material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, written information
furnished to the Guarantor or the Trust by any Underwriter through Goldman,
Sachs & Co. specifically for use in the preparation thereof; provided that in no
case is the Guarantor or the Trust to be liable with respect to any claims made
against any Underwriter or any such controlling person unless such Underwriter
or such controlling person shall have notified the Guarantor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Underwriter or such controlling person, but failure to notify the Guarantor or
Trust of any such claim shall not relieve it from any liability which it may
have to such Underwriter or such
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controlling person otherwise than on account of the indemnity agreement
contained in this paragraph; and provided, further, that the foregoing indemnity
with respect to the Preliminary Prospectus, the Basic Prospectus, the
Prospectus, the Preliminary Supplemented Prospectus and the Final Supplemented
Prospectus shall not inure to the benefit of any Underwriter if a copy of the
Preliminary Prospectus, the Basic Prospectus, the Prospectus, the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus as amended or
supplemented, had not been sent or given by or on behalf of such Underwriter to
the person asserting any such losses, claims, damages or liabilities
concurrently with or prior to delivery of the written confirmation of the sale
of Securities to such person and the untrue statement or omission of a material
fact contained in any such Preliminary Prospectus, Basic Prospectus, Prospectus,
Preliminary Supplemented Prospectus or Final Supplemented Prospectus was
corrected in the Preliminary Prospectus, Basic Prospectus, Prospectus,
Preliminary Supplemented Prospectus or Final Supplemented Prospectus, as amended
or supplemented.
The Guarantor and the Trust will be entitled to participate at their
own expense in the defense, or, if they so elect, to assume the defense of any
suit brought to enforce any such liability, but, if the Guarantor or the Trust
elects to assume the defense, such defense shall be conducted by counsel chosen
by it. In the event that the Guarantor or the Trust elects to assume the defense
of any such suit and retains such counsel, the Underwriter or Underwriters or
controlling person or persons, defendant or defendants in the suit, may retain
additional counsel but shall bear the fees and expenses of such counsel unless
(i) the Guarantor or the Trust shall have specifically authorized the retaining
of such counsel or (ii) the parties to such suit include the Underwriter or
Underwriters or controlling person or persons and the Underwriter or
Underwriters or controlling person or persons have been advised by such counsel
that one or more legal defenses may be available to it or them which may not be
available to the Guarantor or the Trust, in which case the Guarantor or the
Trust shall not be entitled to assume the defense of such suit on behalf of such
Underwriter or Underwriters or controlling person or persons, notwithstanding
their obligation to bear the reasonable fees and expenses of such counsel, it
being understood, however, that the Guarantor and the Trust shall not, in
connection with any one such suit or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
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time for all such Underwriters and their controlling persons, which firm shall
be designated in writing by Goldman, Sachs & Co. The Guarantor and the Trust
shall not be liable to indemnify any person for any settlement of any such claim
effected without the Guarantor's or the Trust's consent. This indemnity
agreement will be in addition to any liability which the Guarantor and the Trust
might otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the
Guarantor and the Trust, each of the Guarantor's directors, each of the
Guarantor's officers who have signed the Registration Statement, each of the
Trustees who have signed the Registration Statement and each person, if any, who
controls the Guarantor and the Trust within the meaning of the Act or the
Exchange Act, against any losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which may be based upon the Act, or any other statute or at common law, on the
ground or alleged ground that any Preliminary Supplemented Prospectus, Final
Supplemented Prospectus, Preliminary Prospectus, the Registration Statement, the
Basic Prospectus or the Prospectus (or any such document, as from time to time
amended, or deemed to be amended, supplemented or modified) includes or
allegedly includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon, and in conformity with, written information
furnished to the Guarantor or the Trust by such Underwriter through Goldman
Sachs & Co. specifically for use in the preparation thereof; provided that in no
case is such Underwriter to be liable with respect to any claims made against
the Guarantor or the Trust or any such director, officer, trustee or controlling
person unless the Guarantor or the Trust or any such director, officer, trustee
or controlling person shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Guarantor
or the Trust or any such director, officer, trustee or controlling person, but
failure to notify such Underwriter of any such claim shall not relieve it from
any liability which it may have to the Guarantor or the Trust or any such
director, officer, trustee or controlling person otherwise than on account of
the indemnity agreement contained in this paragraph. Such Underwriter will be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Underwriter elects to assume the defense, such
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defense shall be conducted by counsel chosen by it. In the event that such
Underwriter elects to assume the defense of any such suit and retain such
counsel, the Guarantor or the Trust or such director, officer, trustee or
controlling person, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) such
Underwriter shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include the Guarantor or the Trust or any such
director, officer, trustee or controlling person and such Underwriter and the
Guarantor or the Trust or such director, officer, trustee or controlling person
have been advised by such counsel that one or more legal defenses may be
available to it or them which may not be available to such Underwriter, in which
case such Underwriter shall not be entitled to assume the defense of such suit
on behalf of the Guarantor or the Trust or such director, officer, trustee or
controlling person, notwithstanding its obligation to bear the reasonable fees
and expenses of such counsel, it being understood, however, that such
Underwriter shall not, in connection with any one such suit or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all of the Guarantor or the Trust and any such
director, officer, trustee or controlling person, which firm shall be designated
in writing by the Guarantor. Such Underwriter shall not be liable to indemnify
any person for any settlement of any such claim effected without such
Underwriter's consent. This indemnity agreement will be in addition to any
liability which such Underwriter might otherwise have.
(c) If recovery is not available under Section 6(a) or 6(b) hereof,
for any reason other than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to contribution for
liabilities and expenses, except to the extent that contribution is not
permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party from the offering of the
Securities (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Guarantor and
the Trust and the Underwriters agree that it would not be equitable if the
amount of such contribution
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were determined by pro rata or per capita allocation (even if the Underwriters
were treated as one entity for such purpose). No Underwriters or any person
controlling such Underwriters shall be obligated to make contribution hereunder
which in the aggregate exceeds the total public offering price of the Securities
purchased by such Underwriters under this Agreement, less the aggregate amount
of any damages which such Underwriters and its controlling persons have
otherwise been required to pay in respect of the same claim or any substantially
similar claim. The Underwriters' obligations to contribute are several in
proportion to their respective underwriting obligations, and not joint.
7. Substitution of Underwriters.
-----------------------------
If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder and the aggregate principal
amount of such Securities which such defaulting Underwriter agreed but failed to
purchase does not exceed 10% of the aggregate principal amount of all the
Securities, the non-defaulting Underwriters may make arrangements satisfactory
to the Guarantor and Trust for the purchase of the aggregate principal amount of
such Securities by other persons, including the non-defaulting Underwriters, but
if no such arrangements are made prior to the Time of Delivery, the non-
defaulting Underwriters shall be obligated severally in proportion to their
respective commitments hereunder, to purchase the Securities which such
defaulting Underwriter agreed but failed to purchase. If any Underwriter or
Underwriters shall so default and the aggregate principal amount of such
Securities with respect to which such default or defaults occur is more than 10%
of the aggregate principal amount of all the Securities and arrangements
satisfactory to the non-defaulting Underwriters and the Guarantor and the Trust
for the purchase of such Securities by other persons are not made within 48
hours after such default, this agreement will terminate.
If the non-defaulting Underwriter or substituted underwriter or
underwriters are required hereby or agree to take up all or part of the
Securities of the defaulting Underwriter as provided in this Section 7, (i) the
Guarantor and the Trust shall have the right to postpone the Time of Delivery
for a period of not more than five full business days, in order that the
Guarantor and the Trust may effect whatever changes may thereby be made
necessary in the Registration Statement or Prospectus or in any other documents
or arrangements, and the Guarantor and the Trust agree to promptly file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective aggregate
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principal amount of Securities which the non-defaulting Underwriters or
substituted purchaser or purchasers shall thereafter be obligated to purchase
shall be taken as the basis of their underwriting obligation for all purposes of
this Agreement. Nothing herein contained shall relieve any defaulting
Underwriter of its liability to the Guarantor and the Trust or the non-
defaulting Underwriters for damages occasioned by its default hereunder. Any
termination of this Agreement pursuant to this Section 7 shall be without
liability on the part of the non-defaulting Underwriters or the Guarantor or the
Trust, other than as provided in Sections 6 and 9.
8. Survival of Indemnities, Representations, Warranties, etc.
----------------------------------------------------------
The respective indemnities, agreements, representations, warranties
and other statements of the Guarantor and the Trust and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Guarantor or the Trust, or any officer or director or
controlling person of the Guarantor or the Trust, and shall survive delivery of
and payment for the Securities.
9. Termination.
-----------
If this Agreement shall be terminated by the Underwriters, because of
any failure or refusal on the part of the Guarantor or the Trust to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Guarantor or the Trust shall be unable to perform its obligations
under this Agreement, the respective indemnities shall remain in full force and
effect and the Guarantor or the Trust will reimburse the Underwriter or such
Underwriters as have so terminated this Agreement with respect to themselves for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by them in connection with the transactions
contemplated by this Agreement.
10. Notices.
-------
In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
25
<PAGE>
All statements, requests, notices and agreements hereunder shall be
in writing, and (i) if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you in care of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration Department; (ii) if to
the Guarantor shall be delivered or sent by mail, telex or facsimile
transmission to the Guarantor in care of Houston Industries Incorporated, 1111
Louisiana, Houston, Texas 77002, Attention, Assistant Treasurer; and (iii) if to
the Trust shall be delivered or sent by mail, telex or facsimile transmission to
the Trust, 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
11. Successors.
----------
This Agreement shall inure to the benefit of and be binding upon the
several Underwriters, the Guarantor and the Trust and their respective
successors and the directors, trustees, officers and controlling persons
referred to in Section 6 of this Agreement. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person other than
the persons mentioned in the preceding sentence any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any provisions herein
contained; this Agreement and all conditions and provisions hereof being
intended to be, and being, for the sole and exclusive benefit of such persons
and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Guarantor and the Trust
contained in this Agreement shall also be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of the Act or
the Exchange Act, and the representations, warranties, covenants, agreements and
indemnities of the several Underwriters shall also be for the benefit of each
Trustee, each director of the Guarantor, each person who has signed the
Registration Statement and the person or persons, if any, who control the
Guarantor and the Trust within the meaning of the Act.
12. Applicable Law.
--------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
13. Counterparts.
------------
This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
26
<PAGE>
If the foregoing is in accordance with your understanding, please
sign and return to us seven counterparts hereof, and upon the acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Guarantor and the Trust. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Guarantor and the Trust for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
27
<PAGE>
Very truly yours,
HL&P Capital Trust I
By: Houston Lighting & Power Company,
as Depositor
By: /s/ LINDA GEIGER
-------------------------------
Name: Linda Geiger
Title: Authorized Agent
Houston Lighting & Power Company
By: /s/ LINDA GEIGER
-------------------------------
Name: Linda Geiger
Title: Authorized Agent
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Dean Witter Reynolds Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
By: /s/ GOLDMAN, SACHS & CO.
---------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
28
<PAGE>
SCHEDULE I
Number of
Securities
to be
Underwriters Purchased
- ------------------------------------------ ----------
Goldman, Sachs & Co. ..................... 919,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated....................... 919,000
Dean Witter Reynolds Inc. ................ 918,000
Donaldson, Lufkin & Jenrette
Securities Corporation................... 918,000
A.G. Edwards & Sons, Inc. ................ 918,000
PaineWebber Incorporated.................. 918,000
Prudential Securities Incorporated........ 918,000
Smith Barney Inc. ........................ 918,000
Bear, Sterns & Co. Inc. .................. 106,000
Alex Brown & Sons Incorporated............ 106,000
Credit Suisse First Boston Corporation.... 106,000
Dillon, Read & Co. Inc. .................. 106,000
EVEREN Securities, Inc. .................. 106,000
Lehman Brothers Inc. ..................... 106,000
Oppenheimer & Co., Inc. .................. 106,000
Principal Financial Securities, Inc. ..... 106,000
Rauscher Pierce Refsnes, Inc. ............ 106,000
Advest, Inc. ............................. 50,000
Robert W. Baird & Co. Incorporated........ 50,000
J.C. Bradford & Co. ...................... 50,000
Cowen & Company........................... 50,000
Crowell, Weedon & Co. .................... 50,000
Dain Bosworth Incorporated................ 50,000
Fahnestock & Co. Inc. .................... 50,000
First Albany Corporation.................. 50,000
First of Michigan Corporation............. 50,000
First Southwest Company................... 50,000
J.J.B. Hilliard, W.L. Lyons, Inc. ........ 50,000
Interstate/Johnson Lane Corporation....... 50,000
Janney Montgomery Scott Inc. ............. 50,000
Kennedy, Cabot & Co. ..................... 50,000
Legg Mason Wood Walker, Incorporated...... 50,000
McDonald & Company Securities, Inc. ...... 50,000
McGinn, Smith & Co., Inc. ................ 50,000
Morgan Keegan & Company, Inc. ............ 50,000
The Ohio Company.......................... 50,000
Olde Discount Corporation................. 50,000
Piper Jaffray Inc. ....................... 50,000
Raymond James & Associates, Inc. ......... 50,000
The Robinson-Humphrey Company, Inc. ...... 50,000
29
<PAGE>
Roney & Co., LLC.......................... 50,000
Southwest Securities, Inc. ............... 50,000
Stephens Inc. ............................ 50,000
Sterne, Agee & Leach, Inc. ............... 50,000
Stifel, Nicolaus & Company, Incorporated.. 50,000
Sutro & Co. Incorporated.................. 50,000
Trilon International Inc. ................ 50,000
Tucker Anthony Incorporate................ 50,000
U.S. Clearing Corp. ...................... 50,000
Wedbush Morgan Securities................. 50,000
Wheat, First Securities, Inc. ............ 50,000
Total................................... 10,000,000
30
<PAGE>
EXHIBIT 1.2
HL&P Capital Trust II
8.257% Capital Securities, Series B
guaranteed to the extent set forth in the Guarantee by
Houston Lighting & Power Company
--------------------------------------
Underwriting Agreement
--------------------------------------
January 30, 1997
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
HL&P Capital Trust II, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), and Houston Lighting & Power
Company, a Texas corporation, as depositor of the Trust and as guarantor (the
"Guarantor"), propose, subject to the terms and conditions stated herein, that
the Trust issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of $100,000,000 liquidation amount of 8.257%
Capital Securities, Series B (liquidation amount $1,000 per capital security)
(the "Securities") representing undivided beneficial interests in the assets of
the Trust, guaranteed by the Guarantor as to the payment of distributions, and
as to payments on liquidation or redemption, to the extent set forth in a
guarantee agreement (the "Guarantee") among the Guarantor and The Bank of New
York, as trustee (the "Guarantee Trustee"). The proceeds of the sale of the
Securities and an aggregate of $3,093,000 liquidation amount of its Common
Securities (liquidation amount $1,000 per common security) (the "Common
Securities") by the Trust are to be invested in Junior Subordinated Debentures,
Series B
<PAGE>
(the "Subordinated Debentures") of the Guarantor to be issued pursuant to a
Junior Subordinated Indenture (the "Indenture") among the Guarantor and The Bank
of New York, as trustee (the "Debenture Trustee").
1. Representations and Warranties of the Guarantor and the Trust.
The Guarantor and the Trust jointly and severally represent and
warrant to, and agree with, each of the Underwriters that:
(i) A registration statement on Form S-3 with respect to the
Securities, the Subordinated Debentures and the Guarantee (File Nos. 333-
20069 and 333-20069-02) including a prospectus (any preliminary prospectus
included in such registration statement being hereinafter referred to as a
"Preliminary Prospectus"), copies of which have been delivered to you, has
been prepared and filed by the Guarantor and the Trust with the Securities
and Exchange Commission (the "Commission") and has been declared effective
under the Securities Act of 1933, as amended (the "Act"). No stop order
suspending the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or, to the best
knowledge of the Guarantor and the Trust, threatened by the Commission.
Such registration statement (including all documents filed as part thereof
or incorporated by reference therein, but excluding any Forms T-1, as
amended), as amended and supplemented at the date of this Agreement is
hereinafter referred to as to the "Registration Statement." The Prospectus
contained in the Registration Statement at the time that the Registration
Statement was declared effective is hereinafter referred to as the "Basic
Prospectus."
The prospectus included in the Registration Statement, as amended and
supplemented to the date of this Agreement (including all documents then
incorporated by reference therein and including the Final Supplemented
Prospectus (hereinafter defined)), is hereinafter referred to as the
"Prospectus". Any reference herein to the Registration Statement, the
Prospectus, the Basic Prospectus, or the Final Supplemented Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein, or deemed to be incorporated by reference therein, and
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the date of such Registration Statement, Prospectus,
the Basic Prospectus, or the Final Supplemented Prospectus. Any reference
herein to the terms "amend", "amendment"
2
<PAGE>
or "supplement" with respect to the Registration Statement or the
Prospectus shall be deemed to refer to and include, without limitation, the
filing of any document under the Exchange Act deemed to be incorporated
therein by reference after the date of such Registration Statement or
Prospectus.
A prospectus supplement, dated the date hereof, setting forth the
terms of the Securities and of their sale and distribution (the "Final
Supplemented Prospectus") has been prepared and will be filed pursuant to
Rule 424(b) under the Act ("Rule 424(b)").
(ii) On the effective date of the Registration Statement, the
Registration Statement, as amended and supplemented at that time, conformed
in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "TIA"), and the applicable rules and
regulations of the Commission thereunder, and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; and on the date of this Agreement, the Registration Statement
and the Prospectus conform, and at the Time of Delivery (hereinafter
defined) they will conform, in all material respects to the requirements of
the Act and the TIA and the applicable rules and regulations of the
Commission thereunder, and on the date of this Agreement do not, and on the
Time of Delivery will not, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iii) Each document filed or to be filed pursuant to the Exchange Act
and incorporated by reference, or deemed to be incorporated by reference in
the Prospectus (including any document to be filed pursuant to the Exchange
Act which will constitute an amendment to the Prospectus) conformed or,
when so filed, will conform in all material respects to the requirements of
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, and none of such documents included or, when so filed, will
include any untrue statement of a material fact or omitted or, when so
filed, will omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(iv) The Trust has been duly created and is validly existing as a
business trust in good standing
3
<PAGE>
under the laws of the State of Delaware, with power and authority to own,
lease and operate its properties and conduct its business as described in
the Prospectus and, based on expected operations and law in effect on the
date hereof, the Trust will be classified as a grantor trust and will not
be classified as an association taxable as a corporation for United States
federal income tax purposes;
(v) This Agreement has been duly authorized, executed and delivered
by the Guarantor and the Trust;
(vi) The Securities have been duly authorized by the Trust Agreement
(as defined below), and, when issued and delivered pursuant to this
Agreement, such Securities will be duly and validly issued and, subject to
the qualifications set forth herein, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust entitled to the
benefits provided by the Amended and Restated Trust Agreement (the "Trust
Agreement") among the Guarantor and the Trustees named therein (the
"Trustees") (subject to the terms of the Trust Agreement); provided that
the holders of the Securities (the "Securityholders") may be obligated,
pursuant to the Trust Agreement, to (a) provide indemnity and/or security
in connection with and pay taxes or governmental charges arising from
transfers or exchanges of Securities certificates and the issuance of
replacement Securities certificates and (b) provide security and indemnity
in connection with requests of or directions to the Property Trustee (as
defined in the Trust Agreement) to exercise its rights and remedies under
the Trust Agreement; and the Securities conform to the description thereof
contained in the Final Supplemented Prospectus;
(vii) The Securityholders will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware;
(viii) The Common Securities have been duly authorized by the Trust
Agreement, and upon delivery by the Trust to the Guarantor against payment
therefor as set forth in the Trust Agreement, will be duly and validly
issued undivided beneficial interests in the assets of the Trust and
conform to the description thereof contained in the Final Supplemented
Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Time of Delivery, all of the
issued and outstanding Common Securities will be directly owned by the
Guarantor free
4
<PAGE>
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity;
(ix) The Guarantee, the Trust Agreement, the Subordinated Debentures,
the Indenture and the Agreement as to Expenses and Liabilities between the
Guarantor and the Trust (the "Expense Agreement") (the Guarantee, the Trust
Agreement, the Subordinated Debentures, the Indenture and the Expense
Agreement being collectively referred to as the "Guarantor Agreements")
have each been duly authorized by the Guarantor and when validly executed
and delivered by the Guarantor and, in the case of the Guarantee, by the
Guarantee Trustee, in the case of the Trust Agreement, by the Trustees and,
in the case of the Indenture, by the Debenture Trustee, and, in the case of
the Subordinated Debentures, when validly issued by the Guarantor and duly
authenticated and delivered by the Debenture Trustee, will constitute valid
and legally binding obligations of the Guarantor, enforceable in accordance
with their respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); the Subordinated Debentures when validly issued by the
Guarantor and duly authenticated and delivered by the Debenture Trustee,
will be entitled to the benefits of the Indenture; and the Guarantor
Agreements conform to the descriptions thereof in the Final Supplemented
Prospectus;
(x) The issue and sale of the Securities by the Trust, the compliance
by the Trust with all of the provisions of this Agreement, the Securities
and the Trust Agreement, the purchase of the Subordinated Debentures by the
Trust, the execution, delivery and performance by the Trust of the Trust
Agreement and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Trust is a party or by which the Trust is bound or to which any
of the property or assets of the Trust is subject, nor will such action
result in any violation of the provisions of the Trust Agreement or any
existing statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Trust or any of
its properties; the Commission has issued an order under the Act declaring
the Registration
5
<PAGE>
Statement effective and qualifying the Guarantee, the Trust Agreement and
the Indenture under the TIA and no other consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities and the Common Securities by the Trust, the purchase of the
Subordinated Debentures by the Trust or the consummation by the Trust of
the transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(xi) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with all of the
provisions of this Agreement, the Guarantee, the Subordinated Debentures,
the Trust Agreement, the Indenture and the Expense Agreement, the
execution, delivery and performance by the Guarantor of the Guarantor
Agreements, and the consummation of the transactions contemplated herein
and therein will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument for borrowed money to which the Guarantor or any Significant
Subsidiary (as defined by Regulation S-X) of the Guarantor (each, a
"Significant Subsidiary") is a party or by which the Guarantor or any
Significant Subsidiary is bound or to which any of the property or assets
of the Guarantor or any Significant Subsidiary is subject, nor will such
action result in any violation of the provisions of the Restated Articles
of Incorporation or Amended and Restated By-laws of the Guarantor or any
existing statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor or any
of its or its Significant Subsidiaries' properties; the Commission has
issued an order under the Act declaring the Registration Statement
effective and qualifying the Guarantee, the Trust Agreement and the
Indenture under the TIA and no other consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue of the Guarantee or
the Subordinated Debentures or the consummation by the Guarantor of the
other transactions contemplated by this Agreement or the Guarantor
Agreements, except such consents, approvals, authorizations, registrations
or qualifications as may
6
<PAGE>
be required under state securities or Blue Sky laws in connection with the
issuance by the Guarantor of the Guarantee and the Subordinated Debentures;
(xii) The Trust is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
2. Sale and Delivery. (a) Subject to the terms and conditions herein
set forth, the Guarantor and the Trust agree to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of 100% of the liquidation amount
thereof, the liquidation amount of Securities set forth opposite the name of
such Underwriters in Schedule I hereto.
(b) As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds of the sale of the Securities will be
issued by the Trust to purchase the Subordinated Debentures of the Guarantor,
the Guarantor hereby agrees to pay at the Time of Delivery to Goldman, Sachs &
Co., for the accounts of the several Underwriters, an amount equal to $10 per
Security for the Securities to be delivered at the Time of Delivery by wire
transfer of Federal (same-day) funds. The total aggregate amount of the
Underwriters' compensation is $1,000,000.
(c) The Securities to be purchased by each Underwriter hereunder will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Trust with The Depository Trust Company
("DTC") or its designated custodian. The Trust will deliver the Securities to
Goldman, Sachs & Co., for the account of each Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal (same day) funds to a commercial bank account located in the United
States and designated in writing at least forty-eight hours prior to the Time of
Delivery by the Guarantor to Goldman, Sachs & Co., by causing DTC to credit the
Securities to the account of Goldman, Sachs & Co. at DTC. The Trust will cause
the global certificates representing the Securities to be made available to
Goldman, Sachs & Co. for checking at least twenty-four hours prior to the Time
of Delivery at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on Tuesday, February 4, 1997 or such other time and date as
Goldman, Sachs & Co.
7
<PAGE>
and the Guarantor may agree upon in writing. Such time and date are herein
called the "Time of Delivery".
(d) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 5 hereof, including the cross- receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 5(j) hereof, will be delivered at such time and date at the
offices of Dewey Ballantine, 1301 Avenue of the Americas, New York, New York
10019 or such other location as Goldman, Sachs & Co. and the Guarantor may agree
in writing (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 1:00 p.m., New York City time, or such other time as
Goldman, Sachs & Co. and the Guarantor may agree in writing on the New York
Business Day next preceding the Time of Delivery, at which meeting the final
drafts of the documents to be delivered pursuant to the preceding sentence will
be available for review by the parties hereto. For the purposes of this Section
2, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
3. Covenants and Agreements. The Guarantor and the Trust jointly and
severally covenant and agree with each of the Underwriters:
(a) That the Guarantor will furnish without charge to the Underwriters
a copy of the Registration Statement, including all documents incorporated
by reference therein and exhibits filed with the Registration Statement
(other than exhibits which are incorporated by reference and have
previously been so furnished), and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus and the Final
Supplemented Prospectus, any documents incorporated by reference therein at
or after the date thereof (including documents from which information has
been so incorporated) and any supplements and amendments thereto as each
Underwriter may reasonably request so long as such Underwriter is required
to deliver a prospectus;
(b) That the Guarantor will cause the Final Supplemented Prospectus to
be filed pursuant to, and in compliance with, Rule 424(b) and will promptly
advise the Underwriters (i) when any amendment to the Registration
Statement shall have been filed; provided, that, with respect to documents
filed pursuant to the Exchange Act and incorporated by reference into the
8
<PAGE>
Registration Statement, such notice shall only be required during such time
as the Underwriters are required in the reasonable opinion of Dewey
Ballantine, counsel for the Underwriters, to deliver a prospectus, (ii) of
any request by the Commission for any amendment of the Registration
Statement, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (iv) of
the receipt by the Guarantor or the Trust of any notification with respect
to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. So long as any Underwriter is required in the reasonable opinion
of Dewey Ballantine to deliver a prospectus, the Guarantor will not file
any amendment to the Registration Statement or supplement to the Prospectus
unless the Guarantor has furnished one copy of such amendment or supplement
to Goldman, Sachs & Co. and to Dewey Ballantine, and, if such amendment or
supplement is to be filed on or prior to the Time of Delivery, or under
circumstances where the Underwriters are required in the reasonable opinion
of Dewey Ballantine, to deliver a Prospectus, the Underwriters or Dewey
Ballantine, shall not reasonably have objected thereto. If the Commission
shall issue a stop order suspending the effectiveness of the Registration
Statement, the Guarantor will take such steps to obtain the lifting of that
order as in the best judgment of the Guarantor are not contrary to the
interests of the Guarantor;
(c) That if, at any time when in the reasonable opinion of Dewey
Ballantine the Prospectus is required by law to be delivered by an
Underwriter or a dealer, any event shall occur as a result of which it is
necessary, in the reasonable opinion of Dewey Ballantine or counsel for the
Guarantor, to amend or supplement the Prospectus or modify the information
incorporated by reference therein in order to make the statements therein,
in light of the circumstances existing when the Prospectus is delivered to
a purchaser, not misleading, or if it shall be necessary in the reasonable
opinion of any such counsel, to amend or supplement the Prospectus or
modify such information to comply with law, the Guarantor will forthwith
(i) prepare and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Underwriters will furnish to the
Guarantor) to whom Securities may have been sold by the Underwriters and to
any other dealers upon reasonable request, either amendments or supplements
to the Prospectus or (ii) file with the Commission documents
9
<PAGE>
incorporated by reference in the Prospectus, which shall be so supplied to
the Underwriters and such dealers, in either case so that the statements in
the Prospectus as so amended, supplemented or modified will not, in light
of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with law;
(d) That the Guarantor will endeavor to qualify, at its expense, the
Securities, and, to the extent required or advisable, the Guarantee and the
Subordinated Debentures, for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Underwriters shall reasonably request
and to pay all filing fees, reasonable expenses and legal fees in
connection therewith and in connection with the determination of the
eligibility for investment of the Securities; provided, that the Guarantor
shall not be required to qualify as a foreign corporation or a dealer in
securities or to file any consents to service of process under the laws of
any jurisdiction;
(e) That the Guarantor will make generally available to its security
holders and the Securityholders as soon as practicable an earnings
statement of the Guarantor covering a twelve-month period beginning after
the Time of Delivery which shall satisfy the provisions of Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including Rule 158 under the Act).
(f) That during the period beginning on the date of this Agreement and
continuing to and including the Time of Delivery, the Guarantor and the
Trust will not offer, sell, contract to sell or otherwise dispose of any
Securities, any security convertible into or exchangeable into or
exercisable for Securities or Subordinated Debentures or any debt
securities substantially similar to the Subordinated Debentures or equity
securities substantially similar to the Securities (except for the
Subordinated Debentures and the Securities issued pursuant to this
Agreement), without the prior written consent of the Underwriters.
4. Expenses. The Guarantor and the Trust jointly and severally covenant
and agree with the several Underwriters that the Guarantor and the Trust will
pay or cause to be paid the following:
(i) all expenses in connection with the preparation, printing and
filing of the Registration Statement as originally filed and of each
amendment thereto;
10
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(ii) the fees, disbursements and expenses of the Guarantor's or the
Trust's counsel and accountants in connection with the issue of the
Securities and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, the Prospectus, the
Final Supplemented Prospectus and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers;
(iii) all reasonable expenses in connection with the qualification of
the Securities, the Guarantees and the Subordinated Debentures issuable
upon exchange of the Securities, for offering and sale under state
securities laws as provided in Section 3(d) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and
legal investment surveys;
(iv) any fees charged by securities rating services for rating the
Securities and the Subordinated Debentures;
(v) the cost of preparing the Securities and the Subordinated
Debentures;
(vi) the fees and expenses of the Trustees, the Guarantee Trustee and
the Debenture Trustee and any agent of the Trustees, the Guarantee Trustee
and the Debenture Trustee and the fees and disbursements of counsel for the
Trustees in connection with the Trust Agreement and the Securities, counsel
for the Guarantee Trustee in connection with the Guarantee and counsel for
the Debenture Trustee in connection with the Indenture and the Subordinated
Debentures;
(vii) the fees and disbursements of Delaware counsel to the Trust;
and
(viii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for
in this Section.
It is understood, however, that, except as provided in this Section, and
Sections 6 and 9 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel and any advertising expenses
connected with any offers they may make.
5. Conditions of Underwriters' Obligations. The obligations of the
Underwriter hereunder shall be subject to
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the accuracy, at and (except as otherwise stated herein) as of the date hereof
and at and as of the Time of Delivery, of the representations and warranties
made herein by the Guarantor and the Trust, to compliance at and as of the Time
of Delivery by the Guarantor and the Trust with their covenants and agreements
herein contained and the other provisions hereof to be satisfied at or prior to
the Time of Delivery, and to the following additional conditions:
(a) (i) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceeding for such purpose shall be
pending before or threatened by the Commission, and the Underwriters shall have
received on and as of the Time of Delivery, a certificate dated such date,
signed by an executive officer of the Guarantor or an authorized agent of the
Guarantor designated as such by the Board of Directors of the Guarantor to the
foregoing effect, and (ii) there shall have been no material adverse change in
or affecting the business, properties or financial condition of the Guarantor or
the Trust from that set forth in or contemplated by the Registration Statement
at the time it became effective, except as set forth in or contemplated by the
Prospectus, and the Underwriters shall have received on and as of the Time of
Delivery, a certificate dated such date, signed by an executive officer of the
Guarantor or an executive officer of Houston Industries Incorporated ("Houston
Industries") to the foregoing effect. The officers or agents making such
certificates may rely upon the best of his knowledge as to proceedings pending
or threatened.
(b) Dewey Ballantine, counsel for the Underwriters, shall have furnished to
you such opinion or opinions, dated the Time of Delivery, with respect to such
matters as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to pass
upon such matters. In giving such opinion, such counsel may rely (i) as to
matters of Texas law and the exemption of Houston Industries under the 1935 Act
(as defined herein) upon the opinions of Baker & Botts, L.L.P. referred to in
(d) below and Hugh Rice Kelly or such other counsel referred to in (c) below and
(ii) as to matters of Delaware law upon the opinion of Richards, Layton & Finger
referred to in (e) below.
(c) Hugh Rice Kelly, Executive Vice President, General Counsel, and
Corporate Secretary for the Guarantor, shall have furnished to you his written
opinion, dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Guarantor has been duly incorporated and is validly existing
in good standing under the laws of
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the State of Texas and has corporate power and authority to enter into and
perform its obligations under this Agreement and the Guarantor Agreements;
(ii) No consent, approval, authorization or other order of, or
registration with, any governmental regulatory body (other than such as may
be required under applicable securities laws, as to which such counsel need
not express an opinion) is required for the issuance and sale of the
Securities being delivered at the Time of Delivery or the issuance of the
Guarantee and the Subordinated Debentures or the consummation by the Trust
or the Guarantor of the transactions contemplated by this Agreement and the
Guarantor Agreements;
(iii) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or governmental
proceedings pending or threatened to which Guarantor is subject, which,
individually or in the aggregate, are expected to have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Guarantor;
(iv) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures and the execution, delivery and performance by the
Guarantor of this Agreement and the Guarantor Agreements will not result in
the breach or violation of, or constitute a default under, the Restated
Articles of Incorporation or the Amended and Restated Bylaws of the
Guarantor, each as amended to date, any indenture, mortgage, deed of trust
or other agreement or instrument for borrowed money to which the Guarantor
is a party or by which it is bound or to which its property is subject or
any law, order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Guarantor or its property, in any manner
which would have a material adverse effect on the business of the
Guarantor; and
(v) The description of statutes and regulations set forth in Part I
of the Guarantor's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 under the captions "Business--Regulatory Matters--Rates
and Services" and "--Environmental Quality" fairly describe in all material
respects the portions of the statutes and regulations addressed thereby.
(d) Baker & Botts, L.L.P., counsel for the Guarantor and the Trust, shall
have furnished to you their written
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opinion, dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) Such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement which
are not so described and filed;
(ii) The statements set forth in the Final Supplemented Prospectus
under the captions "Certain Terms of Series B Capital Securities", "Certain
Terms of Series B Subordinated Debentures", "Certain Terms of Series B
Guarantee" and in the Basic Prospectus under the caption "Description of
Securities", "Description of Junior Subordinated Debentures", "Description
of Guarantees" and "Relationship Among the Securities, the Corresponding
Junior Subordinated Debentures, the Expense Agreement and the Guarantees",
accurately summarize in all material respects the terms of the Securities,
the Trust Agreement, the Subordinated Debentures, the Expense Agreement and
the Guarantee, and the statements under the caption "ERISA Considerations"
insofar as they purport to describe the provisions of the laws and
regulations referred to therein are accurate summaries in all materials
respects thereof;
(iii) The Securities, the Subordinated Debentures and the Guarantee
conform as to legal matters in all material respects to the descriptions
thereof contained in the Final Supplemented Prospectus, including, without
limitation, under the captions "Certain Terms of Series B Capital
Securities", "Certain Terms of Series B Subordinated Debentures", and
"Certain Terms of Series B Guarantee" and in the Basic Prospectus under the
captions "Description of Junior Subordinated Debentures", "Description of
Securities", "Description of Guarantees", and "Relationship Among the
Securities, the Corresponding Junior Subordinated Debentures, the Expense
Agreement and the Guarantees", respectively;
(iv) The Subordinated Debentures are in the form prescribed in or
pursuant to the Indenture, have been duly and validly authorized by all
necessary corporate action on the part of the Guarantor and, when executed
and delivered by the Guarantor and authenticated by the Debenture Trustee
as specified in or pursuant to the Indenture, will be valid and binding
obligations of the Guarantor, enforceable in accordance with their terms,
except as such enforceability is subject to the effect of any applicable
bankruptcy, insolvency, reorganization or other law relating to or
affecting
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creditors' rights generally and to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law);
(v) The Guarantee has been duly and validly authorized by all
necessary corporate action on the part of the Guarantor; the Guarantee has
been duly and validly executed and delivered by the Guarantor and (assuming
due authorization, execution and delivery by the Trustee thereunder)
constitutes the valid and binding obligation of the Guarantor, enforceable
in accordance with its terms, except as such enforceability is subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
other law relating to or affecting creditors' rights generally and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); the Trust Agreement, the
Indenture and the Expense Agreement have each been duly authorized,
executed and delivered by the Guarantor and, when executed and delivered by
the other parties thereto, will constitute valid and binding obligations of
the Guarantor, enforceable in accordance with their respective terms,
except as such enforceability is subject to the effect of any applicable
bankruptcy, insolvency, reorganization or other law relating to or
affecting creditors' rights generally and to general principles of equity
(regardless of whether such enforceability is considered in proceeding in
equity or at law);
(vi) The Guarantee, the Trust Agreement and the Indenture have been
duly qualified under the TIA;
(vii) Based upon the timely filing by Houston Industries
Incorporated, a Texas corporation ("Houston Industries"), with the
commission of an exemption statement pursuant to Rule 2 under the Public
Utility Holding Company Act of 1935 ("1935 Act") which, to the best of the
knowledge of such counsel, is not the subject of any notification provided
for in Rule 6 under the 1935 Act, Houston Industries is exempt from the
provisions of the 1935 Act except Sections 9(a)(2), 32 and 33 thereof;
(viii) The Trust is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act (in giving such opinion counsel may reference
specified "no-action" letters);
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(ix) The Registration Statement has become effective under the Act,
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been
issued and no proceedings for that purpose have been instituted and are
pending or are threatened by the Commission under the Act; the Registration
Statement, as of its effective date, and the Final Supplemented Prospectus,
as of January 30, 1997, (except for (A) the operating statistics, financial
statements and financial statement schedules contained or incorporated by
reference therein or omitted therefrom (including the auditors' reports on
the financial statements and the notes to the financial statements), (B)
the other financial and statistical information contained or incorporated
by reference therein or omitted therefrom and (C) the exhibits thereto, as
to which such counsel need not express an opinion) complied as to form in
all material respects with the requirements of Form S-3 under the Act and
the applicable rules and regulations of the Commission thereunder, and each
document incorporated by reference therein as originally filed pursuant to
the Exchange Act (except for (A) the operating statistics, financial
statements and financial statement schedules contained or incorporated by
reference therein or omitted therefrom (including the auditors' reports on
the financial statements and the notes to the financial statements), (B)
the other financial and statistical information contained or incorporated
by reference therein or omitted therefrom and (C) the exhibits thereto, as
to which such counsel need not express an opinion) when so filed complied
as to form in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder; and
(x) The execution, delivery and performance by the Guarantor of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Guarantor, and this Agreement has been duly executed and
delivered by the Guarantor.
In addition, such counsel shall state that no facts have come to the attention
of such counsel that lead them to believe that the Registration Statement
(except for (A) the operating statistics, financial statements and financial
statement schedules contained or incorporated by reference therein(including the
auditors' reports on the financial statements and the notes to the financial
statements, except to the extent that such notes describe legal or governmental
proceedings to which the Company is a party and are incorporated by reference
into one or more items of a report
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that is incorporated by reference in the Registration Statement or the
Prospectus, other than an item that requires that financial statements be
provided), (B) the other financial and statistical information contained or
incorporated by reference therein and (C) the exhibits thereto, as to which such
counsel need not comment) as of the time such Registration Statement became
effective, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as amended,
supplemented or modified by the filing of a document incorporated by reference
therein if so amended, supplemented or modified (except for (A) the operating
statistics, financial statement and financial statement schedules contained or
incorporated by reference therein (including the auditors' reports on the
financial statements and the notes to the financial statements, except to the
extent that such notes describe legal or governmental proceedings to which the
Guarantor is a party and are incorporated by reference into one or more items of
a report that is incorporated by reference in the Prospectus, other than an item
that requires that financial statements be provided), (B) the other financial
and statistical information contained or incorporated by reference therein and
(C) the exhibits thereto, as to which such counsel need not comment), as of the
date of the Final Supplemented Prospectus contained, or as of the Time of
Delivery contains, any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) Richards, Layton & Finger, special Delaware counsel for the Guarantor
and the Trust, shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, and all
filings required under the laws of the State of Delaware with respect to
the creation and valid existence of the Trust as a business trust have been
made;
(ii) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the trust power and authority to own property and conduct its
business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and legally binding
obligation of the Guarantor and the Trustees, and is enforceable against
the Guarantor and
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the Trustees, in accordance with its terms, subject, as to enforcement, to
the effect upon the Trust Agreement of (i) bankruptcy, insolvency,
fraudulent transfer and conveyance, reorganization, moratorium,
receivership, liquidation and other similar laws relating to or affecting
rights and remedies of creditors generally, (ii) principles of equity,
including applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at law), and
(iii) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution;
(iv) Under the Delaware Business Trust Act, the Original Trust
Agreement (as defined in the Trust Agreement) and the Trust Agreement, the
Trust has the trust power and authority to (a) execute and deliver, and to
perform its obligations under this Agreement and (b) issue and perform its
obligations under the Securities and the Common Securities;
(v) Under the Delaware Business Trust Act, the Original Trust
Agreement and the Trust Agreement, the execution and delivery by the Trust
of this Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary trust action on the
part of the Trust;
(vi) Under the Delaware Business Trust Act, the Original Trust
Agreement and the Trust Agreement, this Agreement has been duly executed by
the Trust;
(vii) The Securities have been duly authorized by the Trust Agreement
and are duly and validly issued and, subject to the qualifications set
forth herein, fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and are entitled to the benefits provided by the
Trust Agreement (subject to the terms of the Trust Agreement); provided
that such counsel may note that the Securityholders may be obligated,
pursuant to the Trust Agreement, to (a) provide indemnity and/or security
in connection with and pay taxes or governmental charges arising from
transfers or exchanges of Capital Securities Certificates and the issuance
of replacement Capital Securities Certificates and (b) provide security and
indemnity in connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its rights and
remedies under the Trust Agreement. The Securityholders, as beneficial
owners of the Trust, are entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
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organized under the General Corporation Law of the State of Delaware;
(viii) The Common Securities of the Trust have been duly authorized
by the Trust Agreement and are validly issued, and fully paid undivided
beneficial interests in the assets of the Trust;
(ix) Under the Delaware Business Trust Act and the Trust Agreement,
the issuance of the Securities and the Common Securities is not subject to
preemptive rights;
(x) The issuance and sale by the Trust of the Securities and the
Common Securities, the execution, delivery and performance by the Trust of
this Agreement, the consummation by the Trust of the transactions
contemplated by this Agreement and the Trust Agreement and compliance by
the Trust with its obligations thereunder do not violate (a) any of the
provisions of the Certificate of Trust of the Trust or the Trust Agreement,
or (b) any applicable Delaware law or administrative regulation;
(xi) Such counsel has reviewed the statements in the Basic Prospectus
under the caption "The Issuers" and the statements in the Final
Supplemented Prospectus under the caption "HL&P Capital Trust II" and,
insofar as they contain statements of Delaware law, such statements are
fairly presented;
(xii) No authorization, approval, consent or order of any Delaware
court or Delaware governmental authority or Delaware agency is required to
be obtained by the Trust solely in connection with the issuance and sale of
the Securities and the Common Securities. (In rendering the opinion
expressed in this paragraph (xii), such counsel need express no opinion
concerning the securities laws of the State of Delaware.); and
(xiii) Assuming that (i) the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the filing of
documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, and (ii) the Trust is treated as a
grantor trust for federal income tax purposes, the Securityholders (other
than those holders of the Securities who reside or are domiciled in the
State of Delaware) will have no liability for income taxes imposed by the
State of Delaware solely as a result of their participation in
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the Trust, and the Trust will not be liable for any income tax imposed by
the State of Delaware.
(f) Baker & Botts, L.L.P., special tax counsel for the Guarantor and the
Trust, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that such
firm confirms its opinion set forth in the Final Supplemented Prospectus under
the caption "Certain Federal Income Tax Consequences".
(g) At the time of execution of this Agreement, Deloitte & Touche LLP shall
have furnished to you a letter dated the date of such execution, substantially
in the form heretofore supplied and deemed satisfactory to you.
(h) At the Time of Delivery, Deloitte & Touche LLP shall have furnished you
a letter, dated the Time of Delivery, to the effect that such accountants
reaffirm, as of the Time of Delivery and as though made on the Time of Delivery,
the statements made in the letter furnished by such accountants pursuant to
paragraph (g) of this Section 5, except that the specified date referred to in
such letter will be a date not more than five business days prior to the Time of
Delivery.
(i) A Special Event (as defined in the Final Supplemented Prospectus,
except that the reference to effectiveness or announcement on or after the date
of issuance of the Securities shall be deemed a reference to effectiveness or
announcement on or after the date of this Agreement) shall not have occurred and
be continuing.
(j) The Guarantor and the Trust shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the
Guarantor or an authorized agent of the Guarantor designated as such by the
Board of Directors of the Guarantor and of administrators of the Trust
satisfactory to you as to the accuracy of the representations and warranties of
the Guarantor and the Trust herein at and as of the Time of Delivery, as to the
performance by the Guarantor and the Trust of all of their respective
obligations hereunder to be performed at or prior to the Time of Delivery, as to
the matters set forth in the introductory paragraph to this Section 5 and
subsection (a) of this Section and as to such other matters as you may
reasonably request.
6. Indemnification and Contribution. (a) The Guarantor and the Trust,
jointly and severally, agree to indemnify and hold harmless each Underwriter,
and each person, if any, who controls each Underwriter within the meaning of the
Act or the Exchange Act, against any losses,
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claims, damages, liabilities or expenses (including the reasonable cost of
investigating and defending against any claims therefore and counsel fees
incurred in connection therewith), joint or several, which may be based upon
either the Act, or the Exchange Act, or any other statute or at common law, on
the ground or alleged ground that any Final Supplemented Prospectus, the
Registration Statement, the Basic Prospectus or the Prospectus (or any such
document, as from time to time amended, or deemed to be amended, supplemented or
modified) includes or allegedly includes an untrue statement of material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, written information
furnished to the Guarantor or the Trust by any Underwriter through Goldman,
Sachs & Co. specifically for use in the preparation thereof; provided that in no
case is the Guarantor or the Trust to be liable with respect to any claims made
against any Underwriter or any such controlling person unless such Underwriter
or such controlling person shall have notified the Guarantor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Underwriter or such controlling person, but failure to notify the Guarantor or
Trust of any such claim shall not relieve it from any liability which it may
have to such Underwriter or such controlling person otherwise than on account of
the indemnity agreement contained in this paragraph; and provided, further, that
the foregoing indemnity with respect to the, the Basic Prospectus, the
Prospectus, and the Final Supplemented Prospectus shall not inure to the benefit
of any Underwriter if a copy of the Basic Prospectus, the Prospectus, or the
Final Supplemented Prospectus as amended or supplemented, had not been sent or
given by or on behalf of such Underwriter to the person asserting any such
losses, claims, damages or liabilities concurrently with or prior to delivery of
the written confirmation of the sale of Securities to such person and the untrue
statement or omission of a material fact contained in any such Basic Prospectus,
Prospectus, or Final Supplemented Prospectus was corrected in the Basic
Prospectus, Prospectus or Final Supplemented Prospectus, as amended or
supplemented.
The Guarantor and the Trust will be entitled to participate at their own
expense in the defense, or, if they so elect, to assume the defense of any suit
brought to enforce any such liability, but, if the Guarantor or the Trust elects
to assume the defense, such defense shall be conducted by counsel chosen by it.
In the event that the Guarantor or the Trust elects to assume the defense of any
such suit and retains such counsel, the Underwriter or
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Underwriters or controlling person or persons, defendant or defendants in the
suit, may retain additional counsel but shall bear the fees and expenses of such
counsel unless (i) the Guarantor or the Trust shall have specifically authorized
the retaining of such counsel or (ii) the parties to such suit include the
Underwriter or Underwriters or controlling person or persons and the Underwriter
or Underwriters or controlling person or persons have been advised by such
counsel that one or more legal defenses may be available to it or them which may
not be available to the Guarantor or the Trust, in which case the Guarantor or
the Trust shall not be entitled to assume the defense of such suit on behalf of
such Underwriter or Underwriters or controlling person or persons,
notwithstanding their obligation to bear the reasonable fees and expenses of
such counsel, it being understood, however, that the Guarantor and the Trust
shall not, in connection with any one such suit or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such Underwriters and their controlling persons, which firm shall
be designated in writing by Goldman, Sachs & Co. The Guarantor and the Trust
shall not be liable to indemnify any person for any settlement of any such claim
effected without the Guarantor's or the Trust's consent. This indemnity
agreement will be in addition to any liability which the Guarantor and the Trust
might otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the Guarantor
and the Trust, each of the Guarantor's directors, each of the Guarantor's
officers who have signed the Registration Statement, each of the Trustees who
have signed the Registration Statement and each person, if any, who controls the
Guarantor and the Trust within the meaning of the Act or the Exchange Act,
against any losses, claims, damages, liabilities or expenses (including the
reasonable cost of investigating and defending against any claims therefor and
counsel fees incurred in connection therewith), joint or several, which may be
based upon the Act, or any other statute or at common law, on the ground or
alleged ground that any Final Supplemented Prospectus, the Registration
Statement, the Basic Prospectus or the Prospectus (or any such document, as from
time to time amended, or deemed to be amended, supplemented or modified)
includes or allegedly includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the
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Guarantor or the Trust by such Underwriter through Goldman Sachs & Co.
specifically for use in the preparation thereof; provided that in no case is
such Underwriter to be liable with respect to any claims made against the
Guarantor or the Trust or any such director, officer, trustee or controlling
person unless the Guarantor or the Trust or any such director, officer, trustee
or controlling person shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Guarantor
or the Trust or any such director, officer, trustee or controlling person, but
failure to notify such Underwriter of any such claim shall not relieve it from
any liability which it may have to the Guarantor or the Trust or any such
director, officer, trustee or controlling person otherwise than on account of
the indemnity agreement contained in this paragraph. Such Underwriter will be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Underwriter elects to assume the defense, such defense shall be conducted
by counsel chosen by it. In the event that such Underwriter elects to assume the
defense of any such suit and retain such counsel, the Guarantor or the Trust or
any such director, officer, trustee or controlling person, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) such Underwriter shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include the Guarantor or the Trust or any such director, officer, trustee or
controlling person and such Underwriter and the Guarantor or the Trust or such
director, officer, trustee or controlling person have been advised by such
counsel that one or more legal defenses may be available to it or them which may
not be available to such Underwriter, in which case such Underwriter shall not
be entitled to assume the defense of such suit on behalf of the Guarantor or the
Trust or any such director, officer, trustee or controlling person,
notwithstanding its obligation to bear the reasonable fees and expenses of such
counsel, it being understood, however, that such Underwriter shall not, in
connection with any one such suit or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any time for
all of the Guarantor or the Trust and any such director, officer, trustee or
controlling person, which firm shall be designated in writing by the Guarantor.
Such Underwriter shall not be liable to indemnify any person for any settlement
of any such claim effected without such Underwriter's consent. This indemnity
agreement will be in
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addition to any liability which such Underwriter might otherwise have.
(c) If recovery is not available under Section 6(a) or 6(b) hereof, for any
reason other than as specified therein, the parties entitled to indemnification
by the terms thereof shall be entitled to contribution for liabilities and
expenses, except to the extent that contribution is not permitted under Section
11(f) of the Act. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative benefits
received by each party from the offering of the Securities (taking into account
the portion of the proceeds of the offering realized by each), the parties'
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations appropriate under
the circumstances. The Guarantor and the Trust and the Underwriters agree that
it would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose). No Underwriters or any person controlling such
Underwriters shall be obligated to make contribution hereunder which in the
aggregate exceeds the total public offering price of the Securities purchased by
such Underwriters under this Agreement, less the aggregate amount of any damages
which such Underwriters and its controlling persons have otherwise been required
to pay in respect of the same claim or any substantially similar claim. The
Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations, and not joint.
7. Substitution of Underwriters. If any Underwriter shall default in its
obligation to purchase the Securities which it has agreed to purchase hereunder
and the aggregate principal amount of such Securities which such defaulting
Underwriter agreed but failed to purchase does not exceed 10% of the aggregate
principal amount of all the Securities, the non-defaulting Underwriters may make
arrangements satisfactory to the Guarantor and Trust for the purchase of the
aggregate principal amount of such Securities by other persons, including the
non-defaulting Underwriters, but if no such arrangements are made prior to the
Time of Delivery, the non-defaulting Underwriters shall be obligated severally
in proportion to their respective commitments hereunder, to purchase the
Securities which such defaulting Underwriter agreed but failed to purchase. If
any Underwriter or Underwriters shall so default and the aggregate principal
amount of such Securities with respect to which such default or defaults occur
is more than 10% of the aggregate principal amount of all the Securities and
arrangements
24
<PAGE>
satisfactory to the non-defaulting Underwriters and the Guarantor and the Trust
for the purchase of such Securities by other persons are not made within 48
hours after such default, this agreement will terminate.
If the non-defaulting Underwriter or substituted underwriter or
underwriters are required hereby or agree to take up all or part of the
Securities of the defaulting Underwriter as provided in this Section 7, (i) the
Guarantor and the Trust shall have the right to postpone the Time of Delivery
for a period of not more than five full business days, in order that the
Guarantor and the Trust may effect whatever changes may thereby be made
necessary in the Registration Statement or Prospectus or in any other documents
or arrangements, and the Guarantor and the Trust agree to promptly file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective aggregate principal
amount of Securities which the non-defaulting Underwriters or substituted
purchaser or purchasers shall thereafter be obligated to purchase shall be taken
as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Guarantor and the Trust or the non-defaulting Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 7 shall be without liability on the part of
the non-defaulting Underwriters or the Guarantor or the Trust, other than as
provided in Sections 6 and 9.
8. Survival of Indemnities, Representations, Warranties, etc. The
respective indemnities, agreements, representations, warranties and other
statements of the Guarantor and the Trust and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the
Guarantor or the Trust, or any officer or director or controlling person of the
Guarantor or the Trust, and shall survive delivery of and payment for the
Securities.
9. Termination. If this Agreement shall be terminated by the
Underwriters, because of any failure or refusal on the part of the Guarantor or
the Trust to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Guarantor or the Trust shall be unable to
perform its obligations under this Agreement, the respective indemnities shall
remain in full force and effect and the Guarantor or the Trust will
25
<PAGE>
reimburse the Underwriter or such Underwriters as have so terminated this
Agreement with respect to themselves for all out-of-pocket expenses (including
the fees and disbursements of their counsel) reasonably incurred by them in
connection with the transactions contemplated by this Agreement.
10. Notices. In all dealings hereunder, you shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and (i) if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you in care of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration Department; (ii) if to
the Guarantor shall be delivered or sent by mail, telex or facsimile
transmission to the Guarantor in care of Houston Industries Incorporated, 1111
Louisiana, Houston, Texas 77002, Attention, Assistant Treasurer; and (iii) if to
the Trust shall be delivered or sent by mail, telex or facsimile transmission to
the Trust, 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
11. Successors. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Guarantor and the Trust and their
respective successors and the directors, trustees, officers and controlling
persons referred to in Section 6 of this Agreement. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be, and being, for the sole and exclusive benefit of
such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Guarantor and the Trust contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of the Act or the Exchange Act, and the representations, warranties,
covenants, agreements and indemnities of the several Underwriters shall also be
for the benefit of each Trustee, each director of the Guarantor, each person who
has signed the Registration Statement and the person or persons, if any, who
control the Guarantor and the Trust within the meaning of the Act.
26
<PAGE>
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
13. Counterparts. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and the
Guarantor and the Trust. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Guarantor and the Trust for examination upon request, but without warranty
on your part as to the authority of the signers thereof.
27
<PAGE>
Very truly yours,
HL&P Capital Trust II
By: Houston Lighting & Power
Company, as Depositor
By: /s/ LINDA GEIGER
__________________________________
Name: Linda Geiger
Title: Authorized Agent
Houston Lighting & Power Company
By: /s/ LINDA GEIGER
__________________________________
Name: Linda Geiger
Title: Authorized Agent
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
By: /s/ GOLDMAN, SACHS & CO.
_______________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
28
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Liquidation
Amount of
Securities to be
Underwriters Purchased
- ------------ ---------
<S> <C>
Goldman, Sachs & Co..................... $ 50,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................... 50,000,000
------------
Total................................... $100,000,000
</TABLE>
29
<PAGE>
EXHIBIT 4.1
HOUSTON LIGHTING & POWER COMPANY
to
THE BANK OF NEW YORK,
Trustee
---------------------------------------------
JUNIOR SUBORDINATED INDENTURE
Dated as of February 1, 1997
---------------------------------------------
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of February 1, 1997, between
HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (hereinafter called the
"Company") having its principal office at Houston Industries Plaza, 1111
Louisiana, Houston, Texas 77002, and The Bank of New York, a New York banking
corporation, as Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each an "HL&P Trust,"
and, collectively, the "HL&P Trusts") of beneficial interests in such Trusts
(such interests to be called either "Preferred Securities" or "Capital
Securities" and, collectively, the "Preference Securities") and common interests
in such Trusts (the "Common Securities" and, collectively with the Preference
Securities, the "Trust Securities"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the
premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
2
<PAGE>
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by the Company; and
(4) The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series the payment of which has not been made
on the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in such Security, compounded as set
forth in the Board Resolutions or supplemental indenture hereto establishing the
terms of a series of Securities. Additional Interest will accrue under the
circumstances contemplated under this Indenture, to the extent permitted by
applicable law.
"Additional Sums" has the meaning specified in Section 10.6.
3
<PAGE>
"Additional Taxes" means the sum of any additional taxes, duties and other
governmental charges to which an HL&P Trust has become subject from time to time
as a result of a Tax Event.
"Administrative Trustee" means, in respect of any HL&P Trust, each Person
identified as an "Administrative Trustee" in the related Trust Agreement, solely
in such Person's capacity as Administrative Trustee of such HL&P Trust under
such Trust Agreement and not in such Person's individual capacity, or any
successor administrative trustee appointed as therein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, no HL&P Trust to which
Securities have been issued shall be deemed to be an Affiliate of the Company.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors, or such committee of the Board of Directors or officers of the
Company to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of a
series initially issued to an HL&P Trust, the principal corporate trust office
of the Property Trustee under the related Trust Agreement, is closed for
business.
4
<PAGE>
"Capital Securities" has the meaning specified in the first recital of this
Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in the first recital of this
Indenture.
"Common Stock" means the common stock of the Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Agent" means any officer of Houston Industries, the parent company
of the Company, who is authorized and empowered pursuant to one or more Board
Resolutions to negotiate, execute and deliver on behalf of the Company
instruments, certificates and documents in connection with the Company's
financing activities including, without limitation, the President, any Vice
President, the Treasurer, the Secretary, and Assistant Secretary or any
Assistant Treasurer of Houston Industries.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman of the Board
of Directors, any Vice Chairman of the Board of Directors, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary of the Company or a Company Agent, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
at the date hereof is 101 Barclay Street, Floor 21 West, New York, New York
10286. Attention: Corporate Trust Trustee Administration.
"Corporation" includes a corporation, association, company, joint-stock
company or business trust.
5
<PAGE>
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
or the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) every
obligation of such Person for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options, swaps and similar arrangements; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 3.1 with
respect to such series (or any successor thereto).
"Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions," with respect to the Trust Securities issued by an HL&P
Trust, means amounts payable in respect of such Trust Securities as provided in
the related Trust Agreement and referred to therein as "Distributions."
"Dollar" means the currency of the United States of America that, as at the
time of payment, is legal tender for the payment of public and private debts.
"Event of Default" unless otherwise specified in the supplemental indenture
creating a series of Securities has the meaning specified in Article V.
6
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4(f).
"Extension Period" has the meaning specified in Section 3.11.
"Global Security" means a Security in the form prescribed in Section 2.4
evidencing all or part of a series of Securities, issued to the Depository or
its nominee for such series, and registered in the name of such Depository or
its nominee.
"Guarantee Agreement," with respect to an HL&P Trust, means the Guarantee
Agreement substantially in the form attached hereto as Annex D or Annex E, or
substantially in such form as may be specified as contemplated by Section 3.1
with respect to the Securities of any series, in each case as amended from time
to time.
"HL&P Guarantee," with respect to an HL&P Trust, means the guarantee by the
Company of Distributions on the Preference Securities of such HL&P Trust to the
extent provided in the Guarantee Agreement with respect to such HL&P Trust.
"HL&P Trust" has the meaning specified in the first recital of this
Indenture.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Houston Industries" means Houston Industries Incorporated, a Texas
corporation.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of each particular series of Securities established as
contemplated by Section 3.1.
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Investment Company Act Event" means the receipt by an HL&P Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a written
7
<PAGE>
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that such HL&P Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended, which change becomes effective on or after the Original Issue
Date.
"Junior Subordinated Payment" has the meaning specified in Section 13.2.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (and who may be an employee of the Company), and who shall be
acceptable to the Trustee.
"Original Issue Date" means the date of issuance specified in the
supplemental indenture relating to each Security.
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent in
trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated
8
<PAGE>
and delivered or which have been paid pursuant to Section 3.6, unless proof
satisfactory to the Trustee is presented that any such Securities are held
by Holders in whose hands such Securities are valid, binding and legal
obligations of the Company; provided, however, that in determining whether
the Holders of the requisite principal amount of Outstanding Securities
have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company
or any other obligor upon the Securities or any Affiliate of the Company or
such other obligor. Upon the written request of the Trustee, the Company
shall furnish to the Trustee promptly an Officers' Certificate listing and
identifying all Securities, if any, known by the Company to be owned or
held by or for the account of the Company, or any other obligor on the
Securities or any Affiliate of the Company or such obligor, and, subject to
the provisions of Section 6.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are Outstanding for
the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal (and premium, if any) of or interest on any
Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment" means, with respect to the Securities of any
series, the place or places where the principal of (and premium, if any) and
interest on the Securities of such series are payable pursuant to Sections 3.1
and 3.11.
9
<PAGE>
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Securities" has the meaning specified in the first recital
of this Indenture.
"Preference Securities" means the Preferred Securities and the Capital
Securities.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any HL&P Trust, the commercial
bank or trust company identified as the "Property Trustee" in the related Trust
Agreement, solely in its capacity as Property Trustee of such HL&P Trust under
such Trust Agreement and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as
therein provided.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, (i) in the case
of Securities of a series represented by one or more Global Securities, the
Business Day next preceding such Interest Payment Date and (ii) in the case of
Securities of a series not represented by one or more Global Securities, the
date which is fifteen days next preceding such Interest Payment Date (whether or
not a Business Day).
"Responsible Officer" means, with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Assistant
Treasurer, or any other officer of the Corporate Trust Office of the Trustee and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred
10
<PAGE>
because of that officer's knowledge of and familiarity with the particular
subject.
"Rights Plan" means a plan of the Company providing for the issuance
by the Company to all holders of its Common Stock of rights entitling the
holders thereof to subscribe for or purchase shares of Common Stock or any class
or series of preferred stock or preference stock of the Company, which rights
(i) are deemed to be transferred with such shares of Common Stock, (ii) are not
currently exercisable and (iii) are also issued in respect of future issuances
of Common Stock, in each case until the occurrence of a specified event or
events.
"S&P" means Standard & Poor's Ratings Services.
"Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Company, whether incurred on or prior to the date of this Indenture
or hereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Securities or to other
Debt which is pari passu with, or subordinated to, the Securities, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which, when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to
the Company, (b) any Debt of the Company to any of its Subsidiaries, (c) Debt to
any employee of the Company, (d) Debt that by its terms is subordinated to trade
accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
holders of the Securities as a result of the subordination provisions of this
Indenture would be greater than such payments otherwise would have been (absent
giving effect to this clause (d)) as a result of any obligation of such holders
of such Debt to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject, and (e) any Securities;
provided further, however,
11
<PAGE>
with respect to Securities of a series initially issued to an HL&P Trust which
has a series of outstanding Preferred Securities, Senior Debt shall include all
Debt of the Company to any of its Subsidiaries.
"Special Event" means an Investment Company Act Event or a Tax Event.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
pursuant to the terms of such Security as the date on which the principal of
such Security or such installment of interest is due and payable, in the case of
such principal, as such date may be advanced or extended as provided pursuant to
the terms of such Security and this Indenture.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
"Tax Event" means the receipt by an HL&P Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
date of issuance of the Preference Securities of such HL&P Trust, there is more
than an insubstantial risk that (i) such HL&P Trust is, or will be within 90
days of the date of such Opinion of Counsel, subject to United States Federal
income tax with respect to income received or accrued on the corresponding
series of Securities issued by the Company to such HL&P Trust, (ii) interest
payable by the Company on such corresponding series of Securities is not, or
within 90 days of the date of such Opinion of Counsel, will not be, deductible
by the Company, in whole or in part, for United States Federal income tax
purposes or (iii) such HL&P Trust
12
<PAGE>
is, or will be within 90 days of the date of such Opinion of Counsel, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.
"Trust Agreement," with respect to an HL&P Trust, means a Trust
Agreement substantially in the form attached hereto as Annex A, as amended by
the form of Amended and Restated Trust Agreement substantially in the form
attached hereto as Annex B or Annex C, or substantially in such form as may be
specified as contemplated by Section 3.1 with respect to the Securities of any
series, in each case as amended from time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder and,
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S) 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the first recital of
this Indenture.
"Vice President" when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitute a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or
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request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.5) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made or caused to be made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer or counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual
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matters is in the possession of the Company, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
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(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record
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date is set pursuant to this paragraph, the Holders of Outstanding Securities of
such series on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Trustee from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record date may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 10.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
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SECTION 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Preference Securities or
the Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee, any Holder or any holder of Preference
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
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SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Debt, the Holders of the Securities and, to the
extent provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1, 9.2, 10.6, 13.5,
13.6 and 13.7, the holders of Preference Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
SECTION 1.13. Non-Business Days.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day (and no interest shall accrue for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, until such next succeeding Business Day) except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day (in each case with
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the same force and effect as if made on the Interest Payment Date or Redemption
Date or at the Stated Maturity).
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ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or automated quotation system on which the Securities may be
listed or traded as may, consistently herewith, be determined by the officers
executing such Securities, as conclusively evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 with respect to the authentication and
delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.
The definitive Securities shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods, if required by any
securities exchange or automated quotation system on which the Securities may be
listed or traded, on a steel engraved border or steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
or automated quotation system on which the Securities may be listed or traded,
all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities.
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SECTION 2.2. Form of Face of Security.
HOUSTON LIGHTING & POWER COMPANY (Title of Security)
No. $ CUSIP No.____________
HOUSTON LIGHTING & POWER COMPANY, a corporation organized and existing
under the laws of Texas (hereinafter called the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _____________, or registered assigns,
the principal sum of __________ Dollars on _____________, __; provided that the
Company may, subject to certain conditions specified in Section 3.14 of the
Indenture, (i) advance the Stated Maturity of the principal of this Security to
date not earlier than _________, ________ and (ii) extend the Stated Maturity of
the principal of this Security at any time on one or more occasions, but in no
event to a date later than _______, ____. The Company further promises to pay
interest on said principal sum from _________, ________ or from the most recent
interest payment date (each such date, an "Interest Payment Date") on which
interest has been paid or duly provided for, __________ (subject to deferral as
set forth herein) in arrears on [specify Interest Payment Dates] of each year,
commencing ____________________, _____, at the rate of _____% per annum, until
the principal hereof shall have become due and payable, plus Additional
Interest, to the extent permitted by applicable law, if any, until the principal
hereof is paid or duly provided for or made available for payment and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the rate of ____% per annum, compounding _____. The amount of
interest payable for any period shall be computed on the basis of twelve 30-day
months and a 360-day year. The amount of interest payable for any partial period
shall be computed on the basis of a 360-day year of twelve 30-day months and the
days elapsed in any partial month. In the event that any date on which interest
is payable on this Security is not a Business Day, then a payment of the
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date the payment was
originally payable. A "Business Day" shall mean any day other than (i) a
Saturday or Sunday, (ii) a day on which banking institutions in The City of New
York are authorized
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or required by law or executive order to remain closed or (iii) a day on which
the Corporate Trust Office of the Trustee, or, with respect to the Securities of
this series initially issued to an HL&P Trust, the principal corporate trust
office of the Property Trustee under the Trust Agreement hereinafter referred to
or HL&P Capital Trust [ ] is closed for business. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest installment, which shall
be the [specify Regular Record Dates] next preceding the applicable Interest
Payment Date. Any such interest installment not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange or automated quotation system on which the Securities of
this series may be listed or traded, and upon such notice as may be required by
such exchange or automated quotation system, all as more fully provided in said
Indenture.
[If applicable, insert--So long as no Event of Default has occurred
and is continuing, the Company shall have the right at any time during the term
of this Security to defer payment of interest on this Security, at any time or
from time to time, for up to ____ consecutive ____ interest payment periods with
respect to each deferral period (each an "Extension Period"), during which
Extension Periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of which the Company shall
pay all interest then accrued and unpaid (together with Additional Interest
thereon to the extent permitted by applicable law); provided, however, that no
Extension Period shall extend beyond the Stated Maturity of the principal of
this Security; provided, further, that during any such Extension Period, the
Company shall not, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock or (ii) make any payment of principal of or interest
or premium, if any, on or repay, repurchase or redeem any debt security of the
Company that, in either case, ranks pari passu with or junior in interest
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to this Security or make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any Subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to this Security (other
than (a) dividends or distributions in capital stock of the Company, (b) any
declaration of a dividend under a Rights Plan or in connection with the
implementation of a Rights Plan, the issuance of capital stock of the Company
under a Rights Plan or the redemption or repurchase of any rights distributed
pursuant to a Rights Plan,(c) payments under any HL&P Guarantee, and (d)
purchases of Common Stock related to the issuance of Common Stock or rights
under any of the Company's benefit plans for its directors, officers or
employees, related to the issuance of Common Stock or rights under a dividend
reinvestment and stock purchase plan, or related to the issuance of Common Stock
(or securities convertible into or exchangeable for Common Stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of such Extension Period). Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period shall exceed _____ consecutive ______ or
extend beyond the Stated Maturity of the principal of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period except at the end thereof.
The Company shall give the Holder of this Security and the Trustee notice of its
election to begin any Extension Period at least one Business Day prior to the
next succeeding Interest Payment Date on which interest on this Security would
be payable but for such deferral or, with respect to the Securities issued to an
HL&P Trust, so long as such Securities are held by such HL&P Trust, prior to the
earlier of (i) the next succeeding date on which Distributions on the Preference
Securities would be payable but for such deferral or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or other applicable self-regulatory organization or to holders of such
Preference Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the Person entitled
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thereto as such address shall appear in the Securities Register or (ii) by wire
transfer in immediately available funds at such place and to such account as may
be designated in writing by the Person entitled thereto as specified in the
Securities Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
HOUSTON LIGHTING & POWER COMPANY
By:_____________________________
[Authorized Officer]
Attest:_________________________
Secretary
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SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued under a Junior
Subordinated Indenture, dated as of February 1, 1997 (herein called the
"Indenture"), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $________________.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of _____________________,
______, as amended (the "Trust Agreement"), for HL&P Capital Trust [ ], among
Houston Lighting & Power Company, as Depositor, and the Trustees named therein,
shall have the meanings assigned to them in the Indenture or the Trust
Agreement, as the case may be.
The redemption provisions for each series of Securities shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case in accordance with the provisions of this
Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of all series to be affected by such supplemental
indenture and, under certain circumstances, in the case of Securities of a
Series issued to an HL&P Trust, the consent of holders
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of at least a majority in Aggregate Liquidation Amount of Preference Securities
then Outstanding. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of all series at the
time Outstanding, on behalf of the Holders of all Securities of such series, and
in the case of Securities of a Series issued to an HL&P Trust, the Holders of
Preference Securities issued by such HL&P Trust to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security,--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series may
declare the principal amount (and premium, if any) of all the Securities of this
series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), provided that, in the case of the
Securities of this series issued to an HL&P Trust, if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of this series fails to declare the principal (and
premium, if any) of all the Securities of this series to be immediately due and
payable, the holders of at least 25% in aggregate Liquidation Amount of the
Preference Securities then outstanding shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration the
principal amount (and premium, if any) of and the accrued interest (including
any Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal (and
premium, if any) and interest (including any Additional Interest) on such
Securities shall remain subordinated to the extent provided in Article XIII of
the Indenture.]
[If the Security is a Discount Security, --As provided in and subject
to the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than such portion
of the principal
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amount as may be specified in the terms of this series may declare an amount of
principal of (and premium, if any) the Securities of this series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), provided that, in the case of the Securities of this
series issued to an HL&P Trust, if upon an Event of Default, the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series fails to declare the principal of all the Securities of this
series to be immediately due and payable, the holders of at least 25% in
aggregate Liquidation Amount of the Preference Securities then outstanding shall
have such right by a notice in writing to the Company and the Trustee. Upon any
such declaration, such amount of the principal of (and premium, if any) and the
accrued interest (including any Additional Interest) on all the Securities of
this series shall become immediately due and payable, provided that the payment
of principal (and premium, if any) and interest (including any Additional
Interest) on such Securities shall remain subordinated to the extent provided in
Article XIII of the Indenture. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal (and
premium, if any) and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and interest, if any,
on this Security shall terminate.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
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Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $___ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities of this series are exchangeable for a like aggregate principal
amount of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 2.4. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 2.2 and 2.3, bear a legend in substantially the
following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is exchangeable for
Securities registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the Indenture
and may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary."
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SECTION 2.5. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within mentioned
Indenture.
Dated: The Bank of New York, as Trustee
By:_____________________________
Authorized Signatory
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ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:
(a) the title of the Securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities which, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof and
the right, pursuant to Section 3.14 or as otherwise set forth therein, of the
Company to advance or extend the Stated Maturity of a series of Securities;
(d) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable in respect of any Securities of such series,
the Interest Payment Dates on which such interest shall be payable, the right,
pursuant to Section 3.11 or as otherwise set forth therein, of the Company to
defer or extend an Interest Payment Date, and the Regular Record Date for the
interest payable on any Interest Payment Date or the method by which any of the
foregoing shall be determined;
(e) the place or places where the principal of (and premium, if any)
and interest on the Securities of such series shall be payable, the place or
places where the
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Securities of such series may be presented for registration of transfer or
exchange, and the place or places where notices and demands to or upon the
Company in respect of the Securities of such series may be made;
(f) the period or periods within or the date or dates on which, if
any, the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company;
(g) the obligation or the right, if any, of the Company to redeem,
repay or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiple thereof;
(i) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Securities of the series shall be payable, or in which
the Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the Events
of Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with respect
to the Securities of such series as shall be necessary to permit or facilitate
the issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
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(n) whether the Securities of the series, or any portion thereof,
shall initially be issuable in the form of a temporary Global Security
representing all or such portion of the Securities of such series and provisions
for the exchange of such temporary Global Security for definitive Securities of
such series;
(o) if applicable, that any Securities of the series shall be issuable
in whole or in part in the form of one or more Global Securities and, in such
case, the respective Depositaries for such Global Securities, the form of any
legend or legends which shall be borne by any such Global Security in addition
to or in lieu of that set forth in Section 2.4 and any circumstances in addition
to or in lieu of those set forth in Section 3.5 in which any such Global
Security may be exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered, in the
name or names of Persons other than the Depositary for such Global Security or a
nominee thereof;
(p) the appointment of any Paying Agent or Agents for the Securities
of such series;
(q) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;
(r) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
(s) any other terms of the Securities of such series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or
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prior to the delivery of the Officers' Certificate setting forth the terms of
the series.
The Securities shall be subordinated in right of payment to Senior
Debt as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations as contemplated by Section 3.1.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
President or one of its Vice Presidents under its corporate seal reproduced or
impressed thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and make available for delivery such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
conclusively relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 2.1, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted
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by Section 3.1, that such terms have been established in conformity with the
provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
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SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Securities of such
series in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations having
the same Original Issue Date and Stated Maturity and having the same terms as
such temporary Securities. Until so exchanged, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
SECTION 3.5. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities and
of transfers of Securities. Such register is herein sometimes referred to as
the "Securities Register." The Trustee is hereby appointed "Securities
Registrar" for the purpose of registering Securities and transfers of Securities
as herein provided. If any indenture supplemental hereto refers to any transfer
agents (in addition to the Securities Registrar) initially designated by the
Company with respect to any series of Securities, the Company may at any time
rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, provided that the Company
maintains a transfer agent in each place of payment for such series. The
Company may at any time designate
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additional transfer agents with respect to any series of Securities.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated for that purpose the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security or
a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
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(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
has ceased to be a clearing agency registered under the Exchange Act at a time
when the Depositary is required to be so registered to act as depositary, in
each case unless the Company has approved a successor Depositary within 90 days,
(B) there shall have occurred and be continuing an Event of Default with respect
to such Global Security, (C) the Company in its sole discretion determines that
such Global Security will be so exchangeable or transferable or (D) there shall
exist such circumstances, if any, in addition to or in lieu of the foregoing as
have been specified for this purpose as contemplated by Section 3.1.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued in
exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.6 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of mailing of notice of redemption pursuant to Article XI and ending at
the close of business on the day of mailing of such notice of redemption or (b)
to transfer or exchange any Security so selected for redemption in whole or in
part, except, in the case of any Security to be redeemed in part, any portion
thereof not to be redeemed.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them
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harmless, the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a new Security of the same issue and
series of like tenor and principal amount, having the same Original Issue Date
and Stated Maturity, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity as such destroyed, lost or stolen
Security, and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including fees and expenses of counsel to the Company and fees and
expenses of the Trustee, its agents and counsel) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is
punctually paid or duly provided for, on any
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Interest Payment Date, shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest in respect of Securities of such
series, except that, unless otherwise provided in the Securities of such series,
interest payable on the Stated Maturity of the principal of a Security shall be
paid to the Person to whom principal is paid. The initial payment of interest
on any Security of any series which is issued between a Regular Record Date and
the related Interest Payment Date shall be payable as provided in such Security
or in the Board Resolution pursuant to Section 3.1 with respect to the related
series of Securities. Except in the case of a Global Security, at the option of
the Company, interest on any series of Securities may be paid (i) by check
mailed to the address of the Person entitled thereto as it shall appear on the
Securities Register of such series or (ii) by wire transfer in immediately
available funds at such place and to such account as designated in writing by
the Person entitled thereto as specified in the Securities Register of such
series.
Any paying agents will be identified in a supplemental indenture
hereto. The Company may at any time designate additional paying agents or
rescind the designation of any paying agent; however, the Company at all times
will be required to maintain a paying agent in each place of payment for each
series of Securities.
Except as described in Section 3.11, any interest on any Security
which is payable, but is not timely paid or duly provided for, on any Interest
Payment Date for Securities of such series (herein called "Defaulted Interest"),
shall forthwith cease to be payable to the registered Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the
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proposed payment, such money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed, first
class, postage prepaid, to each Holder of a Security of such series at the
address of such Holder as it appears in the Securities Register not less than 10
days prior to such Special Record Date. Unless all of the Securities of a
series are held by an HL&P Trust, The Trustee shall, in the name and at the
expense of the Company, cause a similar notice to be published at least once in
a newspaper, customarily published in the English language on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
but such publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable pursuant
to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Securities of the series in
respect of which interest is in default may be listed or traded and, upon such
notice as may be required by such exchange (or by the Trustee if the Securities
are not listed), if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such payment shall be deemed
practicable by the Trustee.
Any interest on any Security which is deferred or extended pursuant to
Section 3.11 shall not be Defaulted Interest for the purposes of this
Section 3.7.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
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SECTION 3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Security is registered on the applicable
record date as the owner of such Security for the purpose of receiving payment
of principal of and (subject to Section 3.7) any interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities shall be returned by the Trustee to the Company.
SECTION 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360-day year of twelve 30-day months
and interest on the Securities of each series for any partial period shall be
computed on the basis of a 360-day year of twelve 30-day months and the number
of days elapsed in any partial month.
SECTION 3.11. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with
respect to the Securities of a particular series, so long as no Event of Default
has occurred and is continuing, the Company shall have the right, at any time
during the term of such series, from time to time to defer the payment of
interest on such Securities for such period or periods as may be specified as
contemplated by Section 3.1 (each, an "Extension Period") during which Extension
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Periods the Company shall have the right to make partial payments of interest on
any Interest Payment Date. No Extension Period shall end on a date other than
an Interest Payment Date. At the end of any such Extension Period the Company
shall pay all interest then accrued and unpaid on the Securities (together with
Additional Interest thereon, if any, at the rate specified for the Securities of
such series to the extent permitted by applicable law) to the Persons in whose
names that Securities are registered at the close of business on the Regular
Record Date with respect to the Interest Payment Date at the end of such
Extension Period; provided, however, that no Extension Period shall extend
beyond the Stated Maturity of the principal of the Securities of such series;
provided further, that during any such Extension Period, the Company shall not,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock, or (ii) make any payment of principal of or interest or premium,
if any, on or repay, repurchase or redeem any debt security of the Company that,
in either case, ranks pari passu with or junior in interest to the Securities of
such series or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any Subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the securities of such
series (other than (a) dividends or distributions in the capital stock of the
Company, (b) any declaration of a dividend under a Rights Plan or in connection
with the implementation of a Rights Plan, the issuance of capital stock of the
Company under a Rights Plan or the redemption or repurchase of any rights
distributed pursuant to a Rights Plan, (c) payments under any HL&P Guarantee,
and (d) purchases of Common Stock related to the issuance of Common Stock or
rights under any of the Company's benefit plans for its directors, officers or
employees, related to the issuance of Common Stock or rights under a dividend
reinvestment and stock purchase plan, or related to the issuance of Common Stock
(or securities convertible into or exchangeable for Common Stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of such Extension Period). Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period shall exceed the period or periods specified
in such Securities or extend beyond the Stated Maturity of the principal of such
Securities. Upon termination of any Extension Period and upon the payment of
all accrued and unpaid interest and any Additional Interest then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period,
subject to the above requirements. No interest shall be due and payable during
an Extension Period, except at the end thereof. The Company shall give the
Holders of the Securities of such series and
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the Trustee notice of its election to begin any such Extension Period at least
one Business Day prior to the next succeeding Interest Payment Date on which
interest on Securities of such series would be payable but for such deferral or,
with respect to the Securities of a series issued to an HL&P Trust, so long as
such Securities are held by such HL&P Trust, prior to the earlier of (i) the
next succeeding date on which Distributions on the Preference Securities of such
HL&P Trust would be payable but for such deferral or (ii) the date the
Administrative Trustees of such HL&P Trust are required to give notice to any
securities exchange or other applicable self- regulatory organization or to
holders of such Preference Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date.
The Trustee shall promptly give notice of the Company's election to
begin any such Extension Period to the Holders of the Outstanding Securities of
such series.
SECTION 3.12. Right of Set-Off.
With respect to the Securities of a series issued to an HL&P Trust,
notwithstanding anything to the contrary in the Indenture, the Company shall
have the right to set-off any payment it is otherwise required to make
thereunder in respect of any such Security to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the HL&P Guarantee relating to such Security or under Section 5.8.
SECTION 3.13. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by
its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that such
Security constitute indebtedness.
SECTION 3.14. Advancing or Extending of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with
respect to the Securities of a particular series, the Company shall have the
right to (i) advance the Stated Maturity of the principal of the Securities of
such series at any time to any date not earlier than the first date on which the
Company has the right to redeem the Securities of such series, and (ii) extend
the Stated Maturity of the principal of the Securities of such series at any
time at its election for one or more periods, but in
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no event to a date later than the 49th anniversary of the first Interest Payment
Date following the Original Issue Date of the Securities of such series;
provided that, if the Company elects to exercise its right to extend the Stated
Maturity of the principal of the Securities of such series pursuant to clause
(ii), above, at the time such election is made and at the time of extension (A)
the Company is not in bankruptcy, otherwise insolvent or in liquidation, (B) the
Company is not in default in the payment of any interest or principal on such
Securities, (C) in the case of any series of Securities issued to an HL&P Trust,
such HL&P Trust is not in arrears on payments of Distributions on the Preference
Securities issued by such HL&P Trust and no deferred Distributions are
accumulated and (D) if any of such Securities are held by any Person other than
an HL&P Trust such Securities are rated not less than BBB- by S&P or Baa3 by
Moody's or the equivalent by any other nationally recognized statistical rating
organization. In the event the Company elects to advance or extend the Stated
Maturity of the Securities, it shall give notice to the Trustee, and the Trustee
shall give notice of such advancing or extension to the Holders, no less than 30
and no more than 60 days prior to the effectiveness thereof.
SECTION 3.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee in writing of any change in CUSIP numbers.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.3) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year of the date of deposit, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of Clause (B) (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies in which the
Securities of such series are payable sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and interest
(including any Additional Interest) to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
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(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Company under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest (including any Additional Interest) for the payment of which
such money or obligations have been deposited with or received by the Trustee.
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ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any interest payment date in the case of an
Extension Period); or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Company in this Indenture with respect to that
series (other than a covenant or warranty a default in the performance of which
or the breach of which is elsewhere in this Section specifically dealt with),
and continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied; or
(4) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
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(5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit for creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt, or the taking of corporate action
by the Company in furtherance of any such action; or
(6) any other Event of Default provided with respect to Securities of
that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
the Securities of a series issued to an HL&P Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series fail to declare the principal amount
(or, if the Securities of that series are Discount Securities, such portion of
the principal amount as may be specified in the terms of that series) of all the
Securities of that series to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of the corresponding series of
Preference Securities then outstanding shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration such
principal amount (or specified portion thereof) of and the accrued interest
(including any Additional Interest to the extent permitted under applicable law)
on all, the Securities of such series shall become immediately due and payable.
Payment of principal and interest (including any Additional Interest to the
extent permitted under applicable law) on such
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Securities shall remain subordinated to the extent provided in Article XIII
notwithstanding that such amount shall become immediately due and payable as
herein provided.
If an Event of Default specified in Section 5.1(4) or 5.1(5) with
respect to Securities of any series at the time Outstanding occurs, the
principal amount of all the Securities of that series (or, if the Securities of
that series are Discount Securities, such portion of the principal amount of
such Securities as may be specified by the terms of that series) shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest (including any
Additional Interest) on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series which
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.13.
In the case of Securities of a series issued to an HL&P Trust, the
holders of a majority in aggregate Liquidation Amount (as defined in the Trust
Agreement under which such HL&P Trust is formed) of the related series of
Preference Securities issued by such HL&P Trust shall also have the right to
rescind and annul such declaration and its
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consequences by written notice to the Company and the Trustee, subject to the
satisfaction of the conditions set forth in Clauses (1) and (2) above of this
Section 5.2.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement of
Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (and premium,
if any, on) any Security at the Maturity thereof, the Company will, upon demand
of the Trustee, pay to the Trustee, for the benefit of the holders of such
Securities, the whole amount then due and payable on such Securities for
principal, including any sinking fund payment or analogous obligations (and
premium, if any) and interest (including any Additional Interest); and, in
addition thereto, all amounts owing the Trustee, its agents and counsel under
Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization,
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arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration of acceleration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal (and premium, if any) or interest (including any Additional Interest))
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal
(or, if the Securities of that series are Discount Securities, such portion
of the principal amount as may be due and payable pursuant to a declaration
in accordance with Section 5.2) (and premium, if any) and interest
(including any Additional Interest) owing and unpaid in respect to the
Securities and to file such other papers or documents as may be necessary
or advisable and to take any and all actions as are authorized under the
Trust Indenture Act in order to have the claims of the Holders and any
predecessor to the Trustee under Section 6.7 allowed in any such judicial
proceedings; and
(ii) in particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same in accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee for
distribution in accordance with Section 5.6, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it and any predecessor Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election
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of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 5.5. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.7, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee, its agents and
counsel and any predecessor Trustee, its agents and counsel under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then
due and unpaid upon such series of Securities for principal (and premium, if
any), interest (including any Additional Interest) and Additional Taxes, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such series of Securities for principal (and premium, if any)
and interest (including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
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SECTION 5.7. Limitation on Suits.
No Holder of any Securities of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of security or indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of Preference Securities.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 3.11)
interest (including any Additional Interest) on such Security on the respective
Stated Maturities
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expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder. In the case of
Securities of a series issued to an HL&P Trust, any holder of the corresponding
series of Preference Securities issued by such HL&P Trust shall have the right,
upon the occurrence of an Event of Default described in Section 5.1(1) or
5.1(2), to institute a suit directly against the Company for enforcement of
payment to such holder of principal of (premium, if any) and (subject to
Section 3.11) interest (including any Additional Interest) on the Securities
having a principal amount equal to the aggregate Liquidation Amount (as defined
in the Trust Agreement under which such HL&P Trust is formed) of such Preference
Securities of the corresponding series held by such holder and such right shall
not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preference Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of
Preference Securities, then and in every such case the Company, the Trustee, the
Holders and such holder of Preference Securities shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, the Holders and the holders of Preference Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security or any
holder of any Preference Security to exercise any right or remedy accruing upon
any Event of
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Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee
or to the Holders and the right and remedy given to the holders of Preference
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of
Preference Securities, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, determine that the proceeding so
directed would involve the Trustee in personal liability or would otherwise be
contrary to applicable law.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series and, in the case of any Securities
of a series issued to an HL&P Trust, the holders of Preference Securities issued
by such HL&P Trust may waive any past default hereunder and its consequences
with respect to such series except a default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
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Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities of such series or, in the case of a waiver by holders of
Preference Securities issued by such HL&P Trust, by all holders of Preference
Securities issued by such HL&P Trust.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for my action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest (including any
Additional Interest) on any Security on or after the respective Stated
Maturities expressed in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform on their
face to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the
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Trustee, under this Indenture with respect to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be fully protected
in withholding such notice if and so long as a committee of Responsible Officers
of the Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders of Securities of such series; and provided,
further, that, in the case of any default of the character specified in
Section 5.1(3), no such notice to Holders of Securities of such series shall be
given until at least 30 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, Security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company, upon
reasonable notice to the Company, during business hours, personally or by agent
or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or
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within the discretion or rights or powers conferred upon it by this Indenture;
and
(i) the Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Securities Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Securities Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation for all
services rendered by it hereunder in such amounts as the Company and the Trustee
shall agree from time to time (which compensation shall not be limited by any
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provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors, shareholders,
employees and agents for, and to hold it harmless against, any and all loss,
damage, claim, liability or expense (including the reasonable compensation and
the expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. This indemnification shall survive the termination of this
Indenture.
This Section 6.7 shall survive the termination of this Indenture or
the earlier resignation or removal of the Trustee.
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee. Such lien
shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b).
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SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States of America or of any State or Territory or the District of
Columbia, authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by Federal, State, Territorial or District
of Columbia authority, or
(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees, in either case having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Company nor any Person directly or indirectly controlling, controlled by or
under common control with the Company shall serve as Trustee for the Securities
of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of
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such notice of removal or resignation, the Trustee being removed or resigning
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Securities of
such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide Holder
of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company, acting pursuant to the
authority of a Board Resolution, may remove the Trustee with respect to all
Securities, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to the Securities of such series and
supersede
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the successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, subject to Section 5.14, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring
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Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 6.12. Merger, Conversion, Consolidation of Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such
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corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor). For purposes of Section 311(b)(4) and
(6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks and
payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security; provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the Company
(or any such obligor) arising from the making, drawing, negotiating or incurring
of the draft, bill of exchange, acceptance or obligation.
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SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State or Territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to
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such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
The Bank of New York,
As Trustee
By:___________________________
As Authenticating Agent
By:___________________________
Authorized Officer
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ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after June 15 and December 15
in each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such June 15 and December 15, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.
SECTION 7.2. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this
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Indenture as may be required pursuant to the Trust Indenture Act, at the times
and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than January 31 in each
calendar year, commencing with the first January 31 after the first issuance of
Securities under this Indenture.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed and also with the Commission. The Company will promptly
notify the Trustee when any Securities are listed on any stock exchange.
SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and with the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided in the Trust Indenture Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act shall be filed with
the Trustee within 15 days after the same is required to be filed with the
Commission. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall continue to file with the Commission and provide the
Trustee with the annual reports and the information, documents and other reports
which are specified in Sections 13 and 15(d) of the Exchange Act. The Company
also shall comply with the other provisions of Trust Indenture Act
Section 314(a).
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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ARTICLE VIII
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust organized and existing
under the laws of the United States of America or any State or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and interest
(including any Additional Interest) on all the Securities and the performance of
every covenant of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of the Securities of a series issued to an HL&P Trust,
such consolidation, merger, conveyance, transfer or lease is permitted under the
related Trust Agreement and HL&P Guarantee and does not give rise to any breach
or violation of the related Trust Agreement or HL&P Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and any such supplemental indenture complies with
this Article and that all conditions precedent herein provided for relating to
such transaction have been complied with; and the Trustee, subject to
Section 6.1, may rely upon such Officers' Certificate and Opinion of Counsel
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as conclusive evidence that such transaction complies with this Section 8.1.
SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with
Section 8.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; and in the event of any such
conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall cause
to be signed and delivered to the Trustee on its behalf for the purpose pursuant
to such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon the
Company; or
(3) to establish the form or terms of Securities of any series as
permitted by Section 2.1 or 3.1; or
(4) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(5) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events of
Default are to be for the benefit of less than all series of Securities, stating
that such additional Events of Default are expressly being included solely for
the benefit of such series); or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause (7)
shall not adversely affect the
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interest of the Holders of Securities of any series in any material respect or,
in the case of the Securities of a series issued to an HL&P Trust and for so
long as any of the corresponding series of Preference Securities issued by such
HL&P Trust shall remain outstanding, the holders of such Preference Securities;
or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of
Section 6.11 (b); or
(9) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) except to the extent permitted by Section 3.11 or as otherwise
specified as contemplated by Section 2.1 or Section 3.1 with respect to the
deferral of the payment of interest on the Securities of any series and except
to the extent permitted by Section 3.14 or as otherwise specified as
contemplated by Section 2.1 or Section 3.1 with respect to the advancing or
extension of Stated Maturity of the Securities of any Series, change the Stated
Maturity of the principal of, or any installment of interest (including any
Additional Interest) on, any Security, or reduce the principal amount thereof or
the rate of interest thereon or reduce any premium payable upon the redemption
thereof, or reduce the amount of principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, or change the place of payment where, or the coin or
currency in which, any Security or interest thereon
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is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.5, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby; or
(4) modify the provisions in Article XIII of this Indenture with
respect to the subordination of Outstanding Securities of any series in a manner
adverse to the Holders thereof;
provided, further, that, in the case of the Securities of a series issued to an
HL&P Trust, so long as any of the corresponding series of Preference Securities
issued by such HL&P Trust remains outstanding, (i) no such amendment shall be
made that adversely affects the holders of such Preference Securities in any
material respect, and no termination of this Indenture shall occur, and no
waiver of any Event of Default or compliance with any covenant under this
Indenture shall be effective, without the prior consent of the holders of at
least a majority of the aggregate Liquidation Amount (as defined in the Trust
Agreement under which such HL&P Trust is organized) of such Preference
Securities then outstanding unless and until the principal (and premium, if any)
of the Securities of such series and all accrued and, subject to Section 3.7,
unpaid interest (including any Additional Interest) thereon have been paid in
full and (ii) no such amendment shall be made where a consent under this
Indenture would require the consent of each holder of Securities, unless each
holder of Preference Securities, which corresponds to such series of Securities,
also consents to such amendment, unless and until the principal (and premium, if
any) of the Securities of such series and all accrued and (subject to
Section 3.7) unpaid interest (including any Additional Interest) thereon have
been paid in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of
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one or more particular series of Securities or Preference Securities, or which
modifies the rights of the Holders of Securities or holders of Preference
Securities of such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Indenture of the Holders of
Securities or holders of Preference Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in conclusively relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture, and that all conditions precedent have been complied with. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
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provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
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ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including Additional Interest) on the Securities of that
series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities, an office or agency where Securities of that series may be presented
or surrendered for payment and an office or agency where Securities of that
series may be surrendered for transfer or exchange and where notices and demands
to or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and
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premium, if any) or interest (and any Additional Interest) on any of the
Securities of such series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest (and any Additional Interest) so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to 11:00 a.m. New York City time on each due date of the principal of or
interest (and any Additional Interest) on any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest
(and any Additional Interest) so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal and premium (if any) or
interest (and any Additional Interest), and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest (including Additional Interest) on Securities in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of principal
(and premium, if any) or interest (including Additional Interest);
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which
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such sums were held by the Company or such Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest (including Additional Interest) on any Security and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be paid
on Company Request to the Company, or (if then held by the Company) shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee, its
officers, directors, shareholders employees and agents or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 10.4. Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the
end of each calendar year of the Company ending after the date hereof, an
Officers' Certificate covering the preceding calendar year, stating whether or
not to the best knowledge of the signers thereof the Company, are of the signers
of which shall be the principal executive, principal accounting or principal
financial officer of the Company, is in default in the performance, observance
or fulfillment of or compliance with any of the terms, provisions, covenants and
conditions of this Indenture, and if the Company shall be in default, specifying
all such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.4, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.
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SECTION 10.5. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition provided pursuant to Section 3.1, 9.1(3) or 9.1(4) with
respect to the Securities of any series, if before or after the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.
SECTION 10.6. Additional Sums.
In the case of the Securities of a series issued to an HL&P Trust, so
long as no Event of Default has occurred and is continuing and except as
otherwise specified as contemplated by Section 2.1 or Section 3.1, in the event
that (i) an HL&P Trust is the Holder of all of the Outstanding Securities of
such series, (ii) a Tax Event or an Investment Company Act Event in respect of
such HL&P Trust shall have occurred and be continuing and (iii) the Company
shall not have (A) redeemed the Securities of such series pursuant to Section 11
and the applicable supplemental indenture or (B) terminated such HL&P Trust
pursuant to Section 9.2(b) of the related Trust Agreement, the Company shall pay
to such HL&P Trust (and its permitted successors or assigns under the related
Trust Agreement) for so long as such HL&P Trust (or its permitted successor or
assignee) is the registered holder of any Securities of such series, such
additional amounts as may be necessary in order that the amount of Distributions
(including any Additional Amounts (as defined in such Trust Agreement)) then due
and payable by such HL&P Trust on the related Preference Securities and Common
Securities that at any time remain outstanding in accordance with the terms
thereof shall not be reduced as a result of any Additional Taxes (the
"Additional Sums"). Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of
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interest pursuant to Section 3.11 on the Securities shall not defer the payment
of any Additional Sums that may be due and payable.
SECTION 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of
each series that it shall not, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's capital stock, or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt security
(including other series of the Securities) of the Company that, in either case,
ranks pari passu with or junior in interest to the Securities of such series or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such guarantee ranks pari
passu with or junior in interest to the Securities (other than (a) dividends or
distributions in capital stock of the Company, (b) any declaration of a dividend
under a Rights Plan or in connection with the implementation of a Rights Plan,
the issuance of capital stock of the Company under a Rights Plan or the
redemption or repurchase of any rights distributed pursuant to a Rights Plan,
(c) payments under any HL&P Guarantee, and (d) purchases of Common Stock related
to the issuance of Common Stock or rights under any of the Company's benefit
plans for its directors, officers or employees, related to the issuance of
Common Stock or rights under a dividend reinvestment and stock purchase plan or
related to the issuance of Common Stock (or securities convertible into or
exchangeable for Common Stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period) if at
such time (i) an Event of Default with respect to the Securities of such series
shall have occurred and be continuing, (ii) if the Securities of such series are
held by an HL&P Trust, the Company shall be in default with respect to its
payment of any obligations under the HL&P Guarantee relating to the Preference
Securities issued by such HL&P Trust or (iii) the Company shall have given
notice of its election to begin an Extension Period with respect to the
Securities of such series as provided herein and shall not have rescinded such
notice, or such Extension Period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to an HL&P Trust (i) to maintain directly or indirectly 100% ownership of
the Common Securities of such HL&P Trust; provided, however, that any permitted
successor of the Company hereunder may succeed to the Company's ownership of
such Common Securities, (ii) not
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to voluntarily terminate, wind-up or liquidate such HL&P Trust, except (a) in
connection with a distribution of the Securities of such series to the holders
of the Trust Securities in liquidation of such HL&P Trust or (b) in connection
with certain mergers, consolidations or amalgamations permitted by the related
Trust Agreement and (iii) to use its reasonable efforts, consistent with the
terms and provisions of such Trust Agreement, to cause such HL&P Trust to remain
classified as a grantor trust and not an association taxable as a corporation
for United States federal income tax purposes.
SECTION 10.8. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
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ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.
Redemption of Securities of any series (whether by operation of a
sinking fund or otherwise) as permitted or required by any form of Security
issued pursuant to this Indenture shall be made in accordance with such form of
Security and this Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern. Each Security of such series
shall be subject to partial redemption only as set forth in the form of Security
for such series.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at the
election of the Company of any Securities of a series, the Company shall, not
less than 45 nor more than 60 days prior to the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
date and of the principal amount of Securities of that series to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities, the
Company shall furnish the Trustee with an Officers' Certificate and an Opinion
of Counsel evidencing compliance with such restriction.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified
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tenor are to be redeemed (unless such redemption affects only a single
Security), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.
With respect to Securities of each series to be redeemed, each notice
of redemption shall identify the Securities to be redeemed (including CUSIP
numbers) and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of such particular series
and having the same terms are to be redeemed, the identification (and, in the
case of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price; and
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(f) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 11:00 a.m. New York City time on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Company will deposit with the Trustee or with one or more Paying Agents (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section 10.3) an amount of money sufficient to pay
the Redemption Price of, and any accrued interest (including Additional
Interest) on, all the Securities which are to be redeemed on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in
Section 11.4, the Securities or portion of Securities with respect to which such
notice has been given shall become due and payable on the date and at the place
or places stated in such notice at the applicable Redemption Price. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Redemption Price, together
with accrued interest (including any Additional Interest) to the Redemption
Date; provided, however, that, unless otherwise specified as contemplated by
Section 3.1, installments of interest whose Stated Maturity is on or prior to
the Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates According to their terms and the provisions of
Section 3.7.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of the
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same series, of authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms. If a Global Security is so surrendered,
such new Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
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ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Securities of a series in cash, the Company may at its
option, at any time no more than 16 months and no less than 30 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Securities of such series that have been redeemed through the
application of mandatory or optional sinking fund payments pursuant to the terms
of the Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such obligations and stating that the Securities of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value; provided that the Securities to be so credited have not
been previously so credited. The Securities to be so credited shall be received
and credited for such purpose by the Trustee at the redemption price for such
Securities, as specified in the Securities so to be redeemed, for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
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SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to
Section 3.1) and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities pursuant to Section 12.2 and will also
deliver to the Trustee any Securities to be so delivered. Such Officers'
Certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the succeeding sinking fund payment date. In the case of the failure
of the Company to deliver such Officers' Certificate (or, as required by this
Indenture, the Securities and coupons, if any, specified in such Officers'
Certificate), the sinking fund payment due on the succeeding sinking fund
payment date for such series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of the Securities of such series
subject to a mandatory sinking fund payment without the right to deliver or
credit securities as provided in Section 12.2 and without the right to make the
optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Securities
of such series at the Redemption Price specified in such Securities with respect
to the sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or, if the Company is acting as its own Paying Agent, segregated and
held in trust by the Company as provided in Section 10.3) for such series and
together with such payment (or such amount so segregated) shall be applied in
accordance with the provisions of this Section 12.3. Any and all sinking fund
moneys with respect to the Securities of any particular series held by the
Trustee (or if the Company is acting as its own Paying Agent, segregated and
held in trust as provided in Section 10.3) on the last sinking fund payment date
with respect to
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Securities of such series and not held for the payment or redemption of
particular Securities of such series shall be applied by the Trustee (or by the
Company if the Company is acting as its own Paying Agent), together with other
moneys, if necessary, to be deposited (or segregated) sufficient for the
purpose, to the payment of the principal of the Securities of such series at
Maturity. The Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 11.4. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Section 11.6. On or before each sinking fund payment
date, the Company shall pay to the Trustee (or, if the Company is acting as its
own Paying Agent, the Company shall segregate and hold in trust as provided in
Section 10.3) in cash a sum in the currency in which Securities of such series
are payable (except as provided pursuant to Section 3.1) equal to the principal
and any interest accrued to the Redemption Date for Securities or portions
thereof to be redeemed on such sinking fund payment date pursuant to this
Section 12.3.
Neither the Trustee nor the Company shall redeem any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
such series or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to the Securities of such
series except that if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Company, if the
Company is then acting as its own Paying Agent) shall redeem such Securities if
cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Company) for that purpose in accordance with the terms of this
Article XII. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of Default shall occur and any
moneys thereafter paid into such sinking fund shall, during the continuance of
such default or Event of Default, be held as security for the payment of the
Securities and coupons, if any, of such series; provided, however, that in case
such default or Event of Default shall have been cured or waived herein, such
moneys shall thereafter be applied on the next sinking fund payment date for the
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section 12.3.
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ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article, the payment of the
principal of (and premium, if any) and interest (including any Additional
Interest) on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Debt.
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Company (each such event, if any,
herein sometimes referred to as a "Proceeding"), then the holders of Senior Debt
shall be entitled to receive payment in full of all amounts due or to become due
on such Senior Debt, or provision shall be made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior Debt,
before the Holders of the Securities are entitled to receive or retain any
payment or distribution of any kind or character, whether in cash, property or
Securities (including any payment or distribution which may be payable or
deliverable by reason of the payment of any other Debt of the Company (including
any series of the Securities) subordinated to the payment of the Securities,
such payment or distribution being hereinafter referred to as a "Junior
Subordinated Payment"), on account of principal of (or premium, if any) or
interest (including any Additional Interest) on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any Subsidiary
and to that end the holders of Senior Debt shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any Junior
Subordinated Payment, which may be payable or deliverable in respect of the
Securities in any such Proceeding; provided, however, that nothing in this
Section shall prevent the satisfaction of any sinking fund payment in accordance
with this Indenture or as otherwise specified as contemplated by Section 3.1 for
the Securities of any series by delivering and crediting pursuant to
Section 12.2 or as otherwise specified as contemplated by Section 3.1 for the
Securities
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of any series of Securities which have been acquired (upon redemption or
otherwise) prior to such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment or any sinking fund payment (except as described in the immediately
preceding paragraph), before all amounts due or to become due on all Senior Debt
are paid in full or payment thereof is provided for in cash or cash equivalents
or otherwise in a manner satisfactory to the holders of Senior Debt, then and in
such event such payment or distribution shall be received in trust and paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
amounts due or to become due on all Senior Debt remaining unpaid, to the extent
necessary to pay all amounts due or to become due on all Senior Debt in full,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article VIII shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by sale such properties and assets as an entirety, as the case may be,
shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article VIII.
SECTION 13.3. Prior Payment to Senior Debt Upon Acceleration of
Securities.
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time
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such Securities so become due and payable shall be entitled to receive payment
in full of all amounts due on or in respect of such Senior Debt (including any
amounts due upon acceleration), or provision shall be made for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt, before the Holders of the Securities are entitled to receive any
payment or distribution of any kind or character, whether in cash, properties or
securities (including any Junior Subordinated Payment or, except as provided
below, any sinking fund payment) by the Company on account of the principal of
(or premium, if any) or interest (including any Additional Interest) on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary; provided, however, that nothing in this Section
shall prevent the satisfaction of any sinking fund payment in accordance with
this Indenture or as otherwise specified as contemplated by Section 3.1 for the
Securities of any series by delivering and crediting pursuant to Section 12.2 or
as otherwise specified as contemplated by Section 3.1 for the Securities of any
series Securities which have been acquired (upon redemption or otherwise) prior
to such declaration of acceleration.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made actually known to a Responsible Officer of
the Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the holders of Senior Debt
or their representatives or agents.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.4. No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior Debt, or
in the event that any event of default with respect to any Senior Debt shall
have occurred and be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or in the event any judicial
proceeding shall be pending with respect to any such default in payment or such
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event of default, then no payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment or any sinking fund payment, except as provided below) shall be made by
the Company on account of principal of (or premium, if any) or interest
(including any Additional Interest), if any, on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any
Subsidiary, in each case unless and until all amounts due or to become due on
such Senior Debt are paid in full.
Nothing in this Section shall prevent the satisfaction of any sinking
fund payment in accordance with this Indenture or as otherwise specified as
contemplated by Section 3.1 for the Securities of any series by delivering and
crediting pursuant to Section 12.2 or as otherwise specified as contemplated by
Section 3.1 for the Securities of any series Securities which have been acquired
(upon redemption or otherwise) prior to such default in payment or event of
default.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, have been made
actually known to a Responsible Officer of the Trustee or, as the case may be,
such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the holders of Senior Debt or their representatives or
agents.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.5. Obligations of Company Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any Proceeding referred to in Section 13.2 or under the
conditions described in Sections 13.3 and 13.4, from making payments at any time
of principal of (and premium, if any) or interest (including Additional
Interest) on the Securities, or (b) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the principal of
(and premium, if any) or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, a Responsible Officer of the Trustee did not
have actual knowledge that such payment would have been prohibited by
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the provisions of this Article. Notwithstanding the foregoing, the failure of
the Company to make a payment on account of principal of (or premium, if any) or
interest on (including any Additional Interest) the Securities by reason of any
provision of this Article XIII shall not prevent the occurrence of an Event of
Default under Article V, or prevent the Holder of any Security from exercising
all remedies otherwise permitted by applicable law upon the occurrence of an
Event of Default, subject to the rights, if any, under this Article XIII of the
holders of Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
SECTION 13.6. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on
all Senior Debt to the extent provided herein, or the provision for such payment
in cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Senior Debt, the Holders of the Securities shall be subrogated to the extent
of the payments or distributions made to the holders of such Senior Debt
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Company which by its express terms is subordinated to
Senior Debt of the Company to substantially the same extent as the Securities
are subordinated to the Senior Debt and is entitled to like rights of
subrogation by reason of any payments or distributions made to holders of such
Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and interest (including
Additional Interest) on the Securities shall be paid in full. For purposes of
such subrogation, no payments or distributions to the holders of the Senior Debt
of any cash, property or securities to which the Holders of the Securities or
the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Debt by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Debt, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt. A release of any claim by any holder of Senior Debt
shall not limit the Rights of the Holders of Securities under this Section 13.6.
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SECTION 13.7. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as between the Company and the Holders of the Securities,
the obligations of the Company, which are absolute and unconditional, to pay to
the Holders of the Securities the principal of (and premium, if any) and
interest (including any Additional Interest) on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and
creditors of the Company other than their rights in relation to the holders of
Senior Debt; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture including, without limitation, filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
SECTION 13.8. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article and appoints the Trustee his or her attorney-in-fact for any and
all such purposes.
SECTION 13.9. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the immediately
preceding paragraph, the holders of Senior Debt may, at any time and from to
time, without the consent of or
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notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt or any instrument evidencing the
same or any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (iii) release any Person liable in any manner
for the collection of Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
SECTION 13.10. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor; provided, however, that if the Trustee shall not have received the
notice provided for in this Section at least two Business Days prior to the date
upon which by the terms hereof any monies may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest (including any Additional Interest) on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall be
entitled to assume conclusively that such facts do not exist and the Trustee
shall have full power and authority to receive such monies and to apply the same
to the purpose for which they were received and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Debt (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Debt (or a trustee therefor). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
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as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 13.11. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent of
the foregoing or other Person making such payment or distribution, delivered to
the Trustee or to the Holders of Securities, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Debt and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall
not be deemed to owe any fiduciary duty to the holders of Senior Debt and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 13.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article
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shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.7.
SECTION 13.14. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment.
For the purposes of this Article only, (a) the issuance and delivery
of junior securities upon conversion or exchange of Securities shall not be
deemed to constitute a payment or distribution on account of the principal of
(or premium, if any) or interest (including any Additional Interest) on
Securities or on account of the purchase or other acquisition of Securities, and
(b) the payment, issuance or delivery of cash, property or securities (other
than junior securities) upon conversion or exchange of a Security shall be
deemed to constitute payment on account of the principal of such security. For
the purposes of this Section, the term "junior securities" means (i) shares of
any stock of any class of the Company and (ii) securities of the Company which
are subordinated in right of payment to all Senior Debt which may be outstanding
at the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.
* * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
Houston Lighting & Power Company
By: /s/ LINDA GEIGER
_____________________________
Name: Linda Geiger
Title: Authorized Agent
The Bank of New York, as trustee
By: /s/ REMO J. REALE
_____________________________
Name: Remo J. Reale
Title: Assistant Vice President
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EXHIBIT 4.2-A
================================================================================
HOUSTON LIGHTING & POWER COMPANY
to
THE BANK OF NEW YORK, as Trustee
--------------------------
SUPPLEMENTAL INDENTURE No. 1
Dated as of February 1, 1997
--------------------------
8.125% Junior Subordinated Deferrable Interest Debentures
Series A
$257,732,000
===============================================================================
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
SUPPLEMENTAL INDENTURE No. 1
$257,732,000
8.125% Junior Subordinated Deferrable Interest Debentures
Series A
SUPPLEMENTAL INDENTURE No. 1, dated as of February 1, 1997, between HOUSTON
LIGHTING & POWER COMPANY, a Texas corporation (the "Company"), and THE BANK OF
NEW YORK, a New York banking corporation, as Trustee (the "Trustee").
Recitals
--------
The Company has heretofore executed and delivered to the Trustee a Junior
Subordinated Indenture, dated as of February 1, 1997 (the "Indenture"),
providing for the issuance from time to time of series of the Company's
Securities.
Section 3.1 of the Indenture provides that various matters with respect to
any series of Securities issued under the Indenture may be established in an
indenture supplemental to the Indenture.
Section 9.1(3) of the Indenture provides that the Company and the Trustee
may enter into an indenture supplemental to the Indenture to establish the form
or terms of Securities of any series as permitted by Section 2.1 or 3.1 of the
Indenture.
For and in consideration of the premises and the issuance of the series of
Securities provided for herein, it is mutually covenanted and agreed, for the
equal and proportionate benefit of the Holders of the Securities of such series,
as follows:
ARTICLE 1
Relation to Indenture; Definitions
Section 1.1. This Supplemental Indenture No. 1 constitutes an integral
part of the Indenture.
Section 1.2. For all purposes of this Supplemental Indenture No. 1:
<PAGE>
(1) Capitalized terms used herein shall have the meanings specified herein
or in the Indenture or in the Amended and Restated Trust Agreement, dated as of
February 1, 1997, among the Company, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and the
Administrative Trustees named therein, as the case may be.
(2) "Securities Trust" means HL&P Capital Trust I, a statutory business
trust formed by the Company under Delaware law to issue Preference Securities,
the proceeds of which will be used to purchase the Securities.
(3) "Original Issue Date" means February 4, 1997.
(4) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture No. 1; and
(5) The terms "herein", "hereof", "hereunder" and other words of similar
import refer to this Supplemental Indenture No. 1.
ARTICLE 2
The Series of Securities
Section 2.1. Title of the Securities. There shall be a series of
Securities designated the "8.125% Junior Subordinated Deferrable Interest
Debentures, Series A" (the "Series A Securities").
Section 2.2. Limitation on Aggregate Principal Amount; Date of Series A
Securities. The aggregate principal amount of the Series A Securities shall be
limited to $257,732,000; provided, however, that the authorized aggregate
principal amount of the Series A Securities may be increased above such amount
by a Board Resolution to such effect. Each Series A Security shall be dated the
date of its authentication.
Section 2.3. Stated Maturity. The Stated Maturity of the Series A
Securities shall be March 31, 2046; provided, if a Tax Event occurs, then the
Company will have the right (a) prior to the dissolution of the Securities
Trust, to advance the Stated Maturity of the Securities to the minimum extent
required, but not less than 19 and one-half years from the date of the Original
Issue Date, or (b) to dissolve the Securities Trust (if not previously
dissolved) and advance the Stated Maturity of the Securities to the minimum
extent required, but not less than
2
<PAGE>
19 and one-half years from the date of the Original Issue Date, in each case
such that in the opinion of counsel to the Company, after advancing the Stated
Maturity, interest paid on the Series A Securities will be deductible for
federal income tax purposes.
Section 2.4. Interest and Interest Rates. The rate of interest on each
Series A Security shall be 8.125% per annum, accruing from February 4, 1997 and,
subject to Section 2.5, interest shall be payable, quarterly in arrears, on
March 31, June 30, September 30 and December 31, of each year (each such date,
an "Interest Payment Date"), commencing March 31, 1997. The rate of any
Additional Interest that shall accrue on each Series A Security shall be at the
same rate per annum as the interest rate on such Series A Security, compounded
quarterly. The amount of interest payable for any period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any partial period shall be computed on the basis of a 360-day year
of twelve 30-day months and the number of days elapsed in a partial month. In
the event that any date on which interest is payable on a Series A Security is
not a Business Day, then a payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the date such payment was originally payable. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name such Series A
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest installment. In the event
interest payable on any Series A Security is not punctually paid or duly
provided for on any Interest Payment Date, such interest shall forthwith cease
to be payable to the Holder on the applicable Regular Record Date and shall
either (i) be paid to the Person in whose name such Series A Security (or one or
more Predecessor Securities) is registered at the close of business on the
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of the Series A Securities
not less than 10 days prior to such Special Record Date, or (ii) be paid to the
Holder at such time in such lawful manner not inconsistent with the requirements
of any securities exchange, the Nasdaq National Market or other applicable
interdealer quotation system or self-regulatory organization on which the Series
A Securities may be listed, and upon such notice as may be
3
<PAGE>
required by such exchange or other self-regulatory organization, all as more
fully provided in the Indenture.
Section 2.5. Extension of Interest Payment Period. (a) So long as no
Event of Default has occurred and is continuing, the Company shall have the
right, at any time and from time to time during the term of the Series A
Securities to defer the payment of interest on the Securities for up to 20
consecutive quarterly periods with respect to each Extension Period, during
which Extension Periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date; provided, however, that no
Extension Period may extend beyond the Stated Maturity of the Series A
Securities. At the end of any such Extension Period, the Company shall pay all
interest then accrued and unpaid on the Series A Securities (together with
Additional Interest thereon, if any, to the extent permitted by applicable law);
provided, that during any such Extension Period, the Company will not, (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock or (ii) make any payment of principal or of interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu with or junior in interest to the Series A Securities or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company, if such guarantee ranks pari passu
with or junior in interest to the Series A Securities (other than (a) dividends
or distributions in capital stock of the Company, (b) any declaration of a
dividend under a Rights Plan or in connection with the implementation of a
Rights Plan, the issuance of capital stock of the Company under a Rights Plan or
the redemption or repurchase of any such rights distributed pursuant to a Rights
Plan, (c) payments under the HL&P Guarantee and (d) purchases of Common Stock
related to the issuance of Common Stock or rights under any of the Company's
benefit plans for its directors, officers or employees, related to the issuance
of Common Stock or rights under a dividend reinvestment and stock purchase plan
or related to the issuance of Common Stock (or securities convertible into or
exchangeable for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest on the Series A Securities, provided that no Extension
Period shall exceed 20 consecutive quarters or extend beyond the Stated Maturity
of the Series A Securities. Upon termination of any such Extension Period and
upon the payment of all interest then accrued and unpaid, including Additional
Interest, if any, then due, the Company may elect to begin a new
4
<PAGE>
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
shall give the Property Trustee, the Administrative Trustees and the Trustee
notice of its election to begin any such Extension Period at least one Business
Day prior to the earliest of (i) the date the Distributions on the Preferred
Securities would have been payable except for the election to begin such
Extension Period, (ii) the date the Administrative Trustees are required to give
notice to any securities exchange, the Nasdaq National Market or other
applicable stock exchange or automated quotation system or to holders of such
Series A Securities of the record date for such Distributions or (iii) the date
such Distributions are payable, but in any event not less than one Business Day
prior to such record date. The Trustee shall promptly give notice of the
Company's election to begin any such Extension Period to the holders of the
outstanding Preferred Securities.
Section 2.6. Place of Payment. The Place of Payment where the Securities
may be presented or surrendered for payment, where the Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Series A Securities and the
Indenture may be served shall be the Corporate Trust Office of the Trustee.
Section 2.7. Redemption. At any time on or after February 4, 2002 the
Company may, at its option, subject to the terms and conditions of Article XI of
the Indenture, redeem the Series A Securities in whole at any time or in part
from time to time, without premium or penalty, at a redemption price equal to
100% of the principal amount thereof plus the accrued and unpaid interest,
including Additional Interest, if any, to the Redemption Date; provided that in
the event partial redemption of the Series A Securities would result in the
delisting of the Preference Securities issued by the Securities Trust, the
Company may only redeem the Series A Securities in whole.
If a Special Event in respect of the Securities Trust shall occur and be
continuing, the Company may, at its option, redeem the Series A Securities
within 90 days of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of Article XI of the Indenture. The redemption
price for any Series A Security so redeemed shall be equal to 100% of the
principal amount thereof plus accrued and unpaid interest, including Additional
Interest, if any, to the Redemption Date.
Section 2.8. Distribution of Series A Securities. At any time, the
Company may terminate the Securities Trust
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<PAGE>
and cause the Series A Securities to be distributed to Holders of the Trust
Securities in liquidation of the Securities Trust.
Section 2.9. Denomination. The Series A Securities shall be in registered
form without coupons and shall be issuable in denominations of $25 and integral
multiples thereof.
Section 2.10. Currency. Principal and interest on the Series A Securities
shall be payable in Dollars.
Section 2.11. Form of Securities. The Series A Securities shall be
substantially in the form attached as Exhibit A hereto.
Section 2.12. Securities Registrar and Paying Agent. The Trustee shall
initially serve as Securities Registrar and Paying Agent.
Section 2.13. Sinking Fund Obligations. The Company has no obligation to
redeem or purchase any Series A Securities pursuant to any sinking fund or
analogous requirement or upon the happening of a specified event or at the
option of a Holder thereof.
ARTICLE 3
Miscellaneous Provisions
Section 3.1. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 1, is in all respects hereby adopted, ratified and
confirmed.
Section 3.2. This Supplemental Indenture No. 1 may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 3.3. THIS SUPPLEMENTAL INDENTURE NO. 1 AND EACH SERIES A SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 1 to be duly executed, as of the day and year first written above.
HOUSTON LIGHTING & POWER COMPANY
By: /s/ LINDA GEIGER
______________________________________
Name: Linda Geiger
Title: Authorized Agent
THE BANK OF NEW YORK,
as Trustee
By: /s/ REMO J. REALE
______________________________________
Name: Remo J. Reale
Title: Assistant Vice President
7
<PAGE>
Exhibit A
---------
[FORM OF FACE OF SECURITY]
IF THE SECURITY IS TO BE A GLOBAL SECURITY - This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture and no transfer of this
Security (other than a transfer of this Security as a whole by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository) may be registered except in limited
circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to Houston Lighting &
Power Company or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
HOUSTON LIGHTING & POWER COMPANY
8.125% Junior Subordinated Deferrable Interest Debentures
Series A
No. _______________ $___________
HOUSTON LIGHTING & POWER COMPANY, a corporation organized and existing
under the laws of Texas (hereinafter called the "Company"), which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ___________, or registered assigns,
the principal sum of _____________ Dollars on March 31, 2046; provided, if a Tax
Event occurs, then the Company will have the right (a) prior to the dissolution
of the Securities Trust, to advance the Stated Maturity of the Securities to the
minimum extent required, but not less than 19 and one-half years from the date
of Original Issue Date, or (b) to dissolve the Securities Trust
A-1
<PAGE>
(if not previously dissolved) and advance the Stated Maturity of the Securities
to the minimum extent required, but not less than 19 and one-half years from the
Original Issue Date, in each case such that in the opinion of counsel to the
Company, after advancing the maturity date, interest paid on the Securities will
be deductible for federal income tax purposes. The Company further promises to
pay interest on said principal sum from February 4, 1997 or from the most recent
interest payment date (each such date, an "Interest Payment Date") on which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 31, June 30, September 30 and December 31,
of each year, commencing March 31, 1997, at the rate of 8.125% per annum, until
the principal hereof shall have become due and payable, plus Additional
Interest, if any, until the principal hereof is paid or duly provided for or
made available for payment and on any overdue principal and (without duplication
and to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the rate of 8.125% per annum,
compounded quarterly. The amount of interest payable for any period will be
computed on the basis of twelve 30-day months and a 360-day year. The amount of
interest payable for any partial period shall be computed on the basis of a 360-
day year of twelve 30-day months and the number of days elapsed in a partial
month. In the event that any date on which interest is payable on this Security
is not a Business Day, then a payment of the interest payable on such date will
be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee or, with respect to the Securities of this series
initially issued to an HL&P Trust, the principal office of the Property Trustee
under the Trust Agreement is closed for business. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities, as defined in the Indenture) is
registered at the close of business on the Regular Record Date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and
A-2
<PAGE>
may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, the Nasdaq National Market or other applicable interdealer
quotation system or self-regulatory organization on which the Securities of this
series may be listed or traded, and upon such notice as may be required by such
exchange or other self-regulatory organization, all as more fully provided in
said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Security, from
time to time, to defer the payment of interest on such Security for up to 20
consecutive quarterly periods with respect to each deferral period (each an
"Extension Period"), provided, however, that no Extension Period may extend the
Stated Maturity of the Security. During such Extension Periods the Company shall
have the right to make partial payments of interest on any Interest Payment
Date, and at the end of which the Company shall pay all interest then accrued
and unpaid (together with Additional Interest thereon to the extent permitted
by applicable law); provided that during any such Extension Period, the Company
will not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal or of interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to this Security or make
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
with or junior in interest to the Securities (other than (a) dividends or
distributions in capital stock of the Company, (b) any declaration of a dividend
under a Rights Plan in connection with the implementation of a Rights Plan, the
issuance of capital stock of the Company under a Rights Plan or the redemption
or repurchase of any such rights distributed pursuant to a Rights Plan, (c)
payments under any HL&P Guarantee and (d) purchases of Common Stock related to
the issuance of Common Stock or rights under any of the Company's benefit plans
for its directors, officers or employees, related to the issuance of Common
Stock or rights under a dividend reinvestment and stock purchase plan or related
to the issuance of Common Stock (or securities convertible into or exchangeable
for common stock) as consideration in an acquisition transaction that was
entered
A-3
<PAGE>
into prior to the commencement of such Extension Period). Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that no Extension Period shall exceed 20
consecutive quarters or extend beyond the Maturity of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period except at the end thereof.
The Company shall give the Property Trustee, the Administrative Trustees and the
Trustee notice of its election to begin an Extension Period at least one
Business Day prior to the earliest of (i) the date the Distributions on the
Preferred Securities would have been payable except for the election to begin
such Extension Period, (ii) the date the Administrative Trustees are required to
give notice to any securities exchange, the Nasdaq National Market or other
applicable stock exchange as automated quotation system or self-regulatory
organization or to holders of such Preferred Securities of the record date for
such Distributions or (iii) the date such Distributions are payable, but in any
event not less than one Business Day prior to such record date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that except in the case of a Global Security
at the option of the Company payment of interest may be made (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Securities Register or (ii) by wire transfer in immediately available funds
at such place and to such account as may be designated by the Person entitled
thereto as specified in the Securities Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein
A-4
<PAGE>
and in the Indenture by each holder of Senior Debt, whether not outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
HOUSTON LIGHTING & POWER COMPANY
By: _____________________________________
Authorized Officer
Attest: __________________________
[Secretary]
This is one of the Securities referred to in the within mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
By: _____________________________________
Authorized Signatory
A-6
<PAGE>
[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (hereinafter called the "Securities"), issued and to be issued in one or
more series under a Junior Subordinated Indenture, dated as of February 1, 1997
(herein called the "Indenture"), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $257,732,000.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of February 4, 1997 (the
"Trust Agreement"), for the Securities Trust among Houston Lighting & Power
Company, as Depositor, and the Trustees named therein, shall have the meanings
assigned to them in the Indenture or the Trust Agreement, as the case may be.
On or after February 4, 2002, the Company may at any time, at its
option, subject to the terms and conditions of Article XI of the Indenture,
redeem this Security in whole at any time or in part from time to time, without
premium or penalty, at a redemption price equal to 100% of the principal amount
thereof plus the accrued and unpaid interest, including Additional Interest,if
any, to the Redemption Date; provided that in the event partial redemption of
the Securities would result in the delisting of the Preferred Securities issued
by the Securities Trust, the Company may only redeem the Securities in whole.
If a Special Event in respect of the Securities Trust shall occur and
be continuing, the Company may, at its option, redeem this Security within 90
days of the occurrence of such Special Event, in whole but not in part, subject
to the provisions of Article XI of the Indenture. The redemption price for any
Security so redeemed shall be equal to 100% of the principal amount thereof plus
accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date.
Each Security of this series that shall be subject to a partial
redemption, shall be redeemable only in the amount of $25 or, in the case the
Securities of this Series
A-7
<PAGE>
are issued to the Securities Trust, $25, or integral multiples thereof.
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
the
A-8
<PAGE>
Securities of a series issued to the Securities Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series fail to declare the principal amount
(or, if the Securities of that series are Discount Securities, such portion of
the principal amount as may be specified in the terms of that series) of all the
Securities of that series to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of the corresponding series of
Preferred Securities then outstanding shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration such
principal amount (or specified amount) of and the accrued interest (including
any Additional Interest) on all the Securities of such series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article Thirteen of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
A-9
<PAGE>
The Securities of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
A-10
<PAGE>
EXHIBIT 4.2-B
================================================================================
HOUSTON LIGHTING & POWER COMPANY
to
THE BANK OF NEW YORK, as Trustee
------------------------------------------
SUPPLEMENTAL INDENTURE No. 2
Dated as of February 1, 1997
------------------------------------------
8.257% Junior Subordinated Deferrable Interest Debentures
Series B
$103,093,000
===============================================================================
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
SUPPLEMENTAL INDENTURE No. 2
$103,093,000
8.257% Junior Subordinated Deferrable Interest Debentures
Series B
SUPPLEMENTAL INDENTURE No. 2, dated as of February 1, 1997, between HOUSTON
LIGHTING & POWER COMPANY, a Texas corporation (the "Company"), and THE BANK OF
NEW YORK, a New York banking corporation, as Trustee (the "Trustee").
Recitals
--------
The Company has heretofore executed and delivered to the Trustee a Junior
Subordinated Indenture, dated as of February 1, 1997 (the "Indenture"),
providing for the issuance from time to time of series of the Company's
Securities.
Section 3.1 of the Indenture provides that various matters with respect to
any series of Securities issued under the Indenture may be established in an
indenture supplemental to the Indenture.
Section 9.1(3) of the Indenture provides that the Company and the Trustee
may enter into an indenture supplemental to the Indenture to establish the form
or terms of Securities of any series as permitted by Section 2.1 or 3.1 of the
Indenture.
For and in consideration of the premises and the issuance of the series of
Securities provided for herein, it is mutually covenanted and agreed, for the
equal and proportionate benefit of the Holders of the Securities of such series,
as follows:
ARTICLE 1
Relation to Indenture; Definitions
Section 1.1. This Supplemental Indenture No. 2 constitutes an integral
part of the Indenture.
Section 1.2. For all purposes of this Supplemental Indenture No. 2:
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(1) Capitalized terms used herein shall have the meanings specified herein
or in the Indenture or in the Amended and Restated Trust Agreement, dated as of
February 1, 1997, among the Company, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and the
Administrative Trustees named therein, as the case may be.
(2) "Securities Trust" means HL&P Capital Trust II, a statutory business
trust formed by the Company under Delaware law to issue Preference Securities,
the proceeds of which will be used to purchase the Securities.
(3) "Original Issue Date" means February 4, 1997.
(4) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture No. 2; and
(5) The terms "herein", "hereof", "hereunder" and other words of similar
import refer to this Supplemental Indenture No. 2.
ARTICLE 2
The Series of Securities
Section 2.1. Title of the Securities. There shall be a series of
Securities designated the "8.257% Junior Subordinated Deferrable Interest
Debentures, Series B" (the "Series B Securities").
Section 2.2. Limitation on Aggregate Principal Amount; Date of Series B
Securities. The aggregate principal amount of the Series B Securities shall be
limited to $103,093,000; provided, however, that the authorized aggregate
principal amount of the Series B Securities may be increased above such amount
by a Board Resolution to such effect. Each Series B Security shall be dated the
date of its authentication.
Section 2.3. Stated Maturity. The Stated Maturity of the Series B
Securities shall be February 1, 2037; provided, if a Tax Event occurs, then the
Company will have the right (a) prior to the dissolution of the Securities
Trust, to advance the Stated Maturity of the Series B Securities to the minimum
extent required, but not less than 19 and one-half years from the date of the
Original Issue Date, or (b) to dissolve the Securities Trust (if not previously
dissolved) and advance the Stated Maturity of the Series B Securities to the
minimum extent required, but not less than 19 and one-half years from the
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date of the Original Issue Date, in each case such that in the opinion of
counsel to the Company, after advancing the Stated Maturity, interest paid on
the Series B Securities will be deductible for federal income tax purposes.
Section 2.4. Interest and Interest Rates. The rate of interest on each
Series B Security shall be 8.257% per annum, accruing from February 4, 1997 and,
subject to Section 2.5, interest shall be payable, semi-annually in arrears, on
February 1 and August 1 of each year (each such date, an "Interest Payment
Date"), commencing August 1, 1997. The rate of any Additional Interest that
shall accrue on each Series B Security shall be at the same rate per annum as
the interest rate on such Series B Security, compounded semi-annually. The
amount of interest payable for any period shall be computed on the basis of a
360-day year of twelve 30-day months. The amount of interest payable for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the number of days elapsed in a partial month. In the event that any
date on which interest is payable on a Series B Security is not a Business Day,
then a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the Person in whose name such Series B Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest installment. In the event interest payable on any
Series B Security is not punctually paid or duly provided for on any Interest
Payment Date, such interest shall forthwith cease to be payable to the Holder on
the applicable Regular Record Date and shall either (i) be paid to the Person in
whose name such Series B Security (or one or more Predecessor Securities) is
registered at the close of business on the Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of the Series B Securities not less than 10 days prior to such
Special Record Date, or (ii) be paid to the Holder at such time in such lawful
manner not inconsistent with the requirements of any securities exchange, the
Nasdaq National Market or other applicable interdealer quotation system or self-
regulatory organization on which the Series B Securities may be listed, and upon
such notice as may be required by such exchange or other self-regulatory
organization, all as more fully provided in the Indenture.
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Section 2.5. Extension of Interest Payment Period. (a) So long as no
Event of Default has occurred and is continuing, the Company shall have the
right, at any time and from time to time during the term of the Series B
Securities, from time to time, to defer the payment of interest on the Series B
Securities for up to 10 consecutive semi-annual periods with respect to each,
during which Extension Periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date; provided, however, that no
Extension Period may extend beyond the Stated Maturity of the Series B
Securities. At the end of any such Extension Period the Company shall pay all
interest then accrued and unpaid on the Securities (together with Additional
Interest thereon, if any, to the extent permitted by applicable law), provided,
that during any such Extension Period, the Company will not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal or of interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Series B Securities or make any guarantee
payments with respect to any guarantee by the Company or the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
in interest to the Securities (other than (a) dividends or distributions in
capital stock of the Company, (b) any declaration of a dividend under a Rights
Plan or in connection with the implementation of a Rights Plan, the issuance of
capital stock of the Company under a Rights Plan or the redemption or repurchase
of any such rights distributed pursuant to a Rights Plan, (c) payments under the
HL&P Guarantee and (d) purchases of Common Stock or rights related to the
issuance of Common Stock under any of the Company's benefit plans for its
directors, officers or employees, related to the issuance of Common Stock or
rights under a dividend reinvestment and stock purchase plan or related to the
issuance of Common Stock (or securities convertible into or exchangeable for
common stock) as consideration in an acquisition transaction that was entered
into prior to the commencement of such Extension Period). Prior to the
termination of any such Extension Period, the Company may further defer the
payment of interest on the Series B Securities, provided that no Extension
Period shall exceed 10 consecutive semi-annual periods or extend beyond the
Stated Maturity of the Series B Securities. Upon termination of any such
Extension Period and upon the payment of all accrued and unpaid, including
Additional Interest, if any, then due, the Company may elect to begin a new
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
shall give the Property Trustee,
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the Administrative Trustees and the Trustee notice of its election to begin any
such Extension Period at least one Business Day prior to the earliest of (i) the
date the Distributions on the Capital Securities would have been payable except
for the election to begin such Extension Period, (ii) the date the
Administrative Trustees are required to give notice to any securities exchange,
the Nasdaq National Market or other applicable stock exchange or automated
quotation system or to holders of such Capital Securities of the record date for
such Distributions or (iii) the date such Distributions are payable, but in any
event not less than one Business Day prior to such record date. The Trustee
shall promptly give notice of the Company's election to begin any such Extension
Period to the holders of the outstanding Capital Securities.
Section 2.6. Place of Payment. The Place of Payment where the Securities
may be presented or surrendered for payment, where the Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Series B Securities and the
Indenture may be served shall be the Corporate Trust Office of the Trustee.
Section 2.7. Redemption. The Company has the right to redeem the Series B
Securities (i) on or after February 4, 2007, in whole at any time or in part
from time to time, or (ii) prior to February 4, 2007, in whole (but not in part)
within 90 days following the occurrence of a Special Event, in each case subject
to the provisions of Article XI of the Indenture.
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices expressed in percentages of the principal amount
hereof, plus accrued and unpaid interest, including Additional Interest, if any,
to the Redemption Date. If redeemed during the 12 month period beginning
February 4:
Year Percentage
2007 ............. 104.1285%
2008 ............. 103.7157%
2009 ............. 103.3028%
2010 ............. 102.8810%
2011 ............. 102.4771%
2012 ............. 102.0643%
2013 ............. 101.6514%
2014 ............. 101.2386%
2015 ............. 100.8257%
2016 ............. 100.4129%
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and at 100% on or after February 4, 2017.
The Redemption Price, in the case of a redemption following a Special Event
as described under (ii) above, shall equal the Make-Whole Amount plus accrued
and unpaid interest, including Additional Interest, if any, to the Redemption
Date. The "Make-Whole Amount" shall be equal to the greater of (i) 100% of the
principal amount of the Series Securities or (ii) as determined by a Quotation
Agent (as defined below), the sum of the present values of the principal amount
and premium payable as part of the Redemption Price with respect to an optional
redemption of such Series B Security on February 4, 2007, together with
scheduled payments of interest from the Redemption Date to February 4, 2007 (the
"Remaining Life"), in each case discounted to the Redemption Date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate (as defined below).
"Adjusted Treasury Rate" means with respect to any Redemption Date, the
Treasury Rate (as defined below) plus (i) 1.10% if such Redemption Date occurs
on or before February 4, 1998 or (ii) .50% if such Redemption Date occurs after
February 4, 1998.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Remaining Life (if no maturity is within
three months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue
(as defined below), calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price (as defined below) for such Redemption Date. The Treasury Rate
shall be calculated on the third Business Day preceding the Redemption Date.
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"Comparable Treasury Issue" means, with respect to any Redemption Date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after February 4, 2007, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Comparable Treasury Price" means (i) the average of five Reference
Treasury Dealer Quotations (as defined below) for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(ii) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Quotation Agent" means Goldman, Sachs & Co. and its successors; provided,
however, that if the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Section 2.8. Distribution of Series B Securities. At any time, the Company
may terminate the Securities Trust and cause the Series B Securities to be
distributed to Holders of the Trust Securities in liquidation of the Securities
Trust.
Section 2.9. Denomination. The Series B Securities shall be in registered
form without coupons and shall be issuable in denominations of $1,000 and
integral multiples thereof.
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Section 2.10. Currency. Principal and interest on the Series B Securities
shall be payable in Dollars.
Section 2.11. Form of Securities. The Series B Securities shall be
substantially in the form attached as Exhibit A hereto.
Section 2.12. Securities Registrar and Paying Agent. The Trustee shall
initially serve as Series B Securities Registrar and Paying Agent.
Section 2.13. Sinking Fund Obligations. The Company has no obligation to
redeem or purchase any Securities pursuant to any sinking fund or analogous
requirement or upon the happening of a specified event or at the option of a
Holder thereof.
ARTICLE 3
Miscellaneous Provisions
Section 3.1. The Indenture, as supplemented and amended by this
Supplemental Indenture No 2, is in all respects hereby adopted, ratified and
confirmed.
Section 3.2. This Supplemental Indenture No. 2 may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 3.3. THIS SUPPLEMENTAL INDENTURE NO. 2 AND EACH SERIES B SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 2 to be duly executed, as of the day and year first written above.
HOUSTON LIGHTING & POWER COMPANY
By: /s/ LINDA GEIGER
______________________________________
Name: Linda Geiger
Title: Authorized Agent
THE BANK OF NEW YORK, as Trustee
By: /s/ REMO J. REALE
______________________________________
Name: Remo J. Reale
Title: Assistant Vice President
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Exhibit A
---------
[FORM OF FACE OF SECURITY]
IF THE SECURITY IS TO BE A GLOBAL SECURITY - This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture and no transfer of this
Security (other than a transfer of this Security as a whole by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository) may be registered except in limited
circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to Houston Lighting &
Power Company or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
HOUSTON LIGHTING & POWER COMPANY
8.257% Junior Subordinated Deferrable Interest Debentures
Series B
No. _______________ $____________
HOUSTON LIGHTING & POWER COMPANY, a corporation organized and existing
under the laws of Texas (hereinafter called the "Company"), which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ___________, or registered assigns,
the principal sum of _____________ Dollars on February 1, 2037; provided, if a
Tax Event occurs, then the Company will have the right (a) prior to the
dissolution of the Securities Trust, to advance the Stated Maturity of the
Securities to the minimum extent required, but not less than 19 and one-half
years from the
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date of Original Issue Date, or (b) to dissolve the Securities Trust (if not
previously dissolved) and advance the Stated Maturity of the Securities to the
minimum extent required, but not less than 19 and one-half years from the date
of Original Issue Date, in each case such that in the opinion of counsel to the
Company, after advancing the maturity date, interest paid on the Securities will
be deductible for federal income tax purposes. The Company further promises to
pay interest on said principal sum from February 4, 1997 or from the most recent
interest payment date (each such date, an "Interest Payment Date") on which
interest has been paid or duly provided for, semi-annually (subject to deferral
as set forth herein) in arrears on February 1 and August 1 of each year,
commencing August 1, 1997, at the rate of 8.257% per annum, until the principal
hereof shall have become due and payable, plus Additional Interest, if any,
until the principal hereof is paid or duly provided for or made available for
payment and on any overdue principal and (without duplication and to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the rate of 8.257% per annum, compounded
semi-annually. The amount of interest payable for any period will be computed on
the basis of twelve 30-day months and a 360-day year. The amount of interest
payable for any partial period shall be computed on the basis of a 360-day year
of twelve 30-day months and the days elapsed in any partial month. In the event
that any date on which interest is payable on this Security is not a Business
Day, then a payment of the interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable. A "Business Day" shall mean any
day other than (i) a Saturday or Sunday, (ii) a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee or with respect to the Securities of this series initially
issued to any HL&P Trust the principal office of the Property Trustee under the
Trust Agreement is closed for business. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities, as defined in the Indenture) is registered
at the close of business on the Regular Record Date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. Any such interest installment not so
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punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange, the Nasdaq National Market or other
applicable interdealer quotation system or self-regulatory organization on which
the Securities of this series may be listed or traded, and upon such notice as
may be required by such exchange or other self-regulatory organization, all as
more fully provided in said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Security, from
time to time, to defer the payment of interest on such Security for up to 10
consecutive semi-annual periods with respect to each deferral period (each an
"Extension Period"); provided, however, that no Extension Period may extend the
Stated Maturity of the Security. During such Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid (together with Additional Interest thereon to the extent
permitted by applicable law); provided that during any such Extension Period,
the Company will not, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock or (ii) make any payment of principal or of interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to this Security or make
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
with or junior in interest to the Securities (other than (a) dividends or
distributions in Capital Stock of the Company, (b) any declaration of a dividend
under a Rights Plan or in connection with the implementation of a Rights Plan,
the issuance of capital stock of the Company under a Rights Plan or the
redemption or repurchase of any such rights distributed pursuant to a Rights
Plan, (c) payments under any HL&P Guarantee and (d) purchases of Common Stock
related to the issuance of Common Stock under any of the Company's benefit plans
for its directors, officers or employees, related to the issuance of Common
Stock or rights under a dividend reinvestment and stock purchase plan or related
to the issuance of Common Stock (or securities convertible into
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or exchangeable for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period). Prior
to the termination of any such Extension Period, the Company may further extend
the interest payment period, provided that no Extension Period shall exceed 10
consecutive semi-annual periods or extend beyond the Stated Maturity of this
Security. Upon the termination of any such Extension Period and upon the payment
of all accrued and unpaid interest and any Additional Interest then due, the
Company may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period
except at the end thereof. The Company shall give the Property Trustee, the
Administrative Trustees and the Trustee notice of its election to begin an
Extension Period at least one Business Day prior to the earliest of (i) the date
the Distributions on the Capital Securities would have been payable except for
the election to begin such Extension Period, (ii) the date the Administrative
Trustees are required to give notice to any securities exchange, the Nasdaq
National Market or other applicable stock exchange or automated quotation system
or self-regulatory organization or to holders of such Capital Securities of the
record date for such Distributions or (iii) the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that except in the case of a Global Security
at the option of the Company payment of interest may be made (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Securities Register or (ii) by wire transfer in immediately available funds
at such place and to such account as may be designated in writing by the Person
entitled thereto as specified in the Securities Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his
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attorney-in-fact for any and all such purposes. Each Holder hereof, by his
acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior Debt,
whether not outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
HOUSTON LIGHTING & POWER COMPANY
By:______________________________________
Authorized Officer
Attest: __________________________
[Secretary]
Dated:
This is one of the Securities referred to in the within mentioned
Indenture.
THE BANK OF NEW YORK, as Trustee
By:______________________________________
Authorized Signatory
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[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (hereinafter called the "Securities"), issued and to be issued in one or
more series under a Junior Subordinated Indenture, dated as of February 1, 1997
(herein called the "Indenture"), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $103,093,000.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of February 1, 1997 (the
"Trust Agreement"), for the Securities Trust among Houston Lighting & Power
Company, as Depositor, and the Trustees named therein, shall have the meanings
assigned to them in the Indenture or the Trust Agreement, as the case may be.
The Company has the right to redeem this Security (i) on or after
February 4, 2007, in whole at any time or in part from time to time, or (ii)
prior to February 4, 2007, in whole (but not in part) within 90 days following
the occurrence of a Special Event, in each case subject to the provisions of
Article XI of the Indenture.
The Redemption Price, in the case of a redemption under (i) above,
shall equal the following prices expressed in percentages of the principal
amount hereof, plus accrued and unpaid interest, including Additional Interest,
if any, to the Redemption Date. If redeemed during the 12 month period
beginning February 4:
Year Percentage
2007 ............. 104.1285%
2008 ............. 103.7157%
2009 ............. 103.3028%
2010 ............. 102.8810%
2011 ............. 102.4771%
2012 ............. 102.0643%
2013 ............. 101.6514%
2014 ............. 101.2386%
2015 ............. 100.8257%
2016 ............. 100.4129%
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<PAGE>
and at 100% on or after February 4, 2017.
The Redemption Price, in the case of a redemption following a Special
Event, as described under (ii) above, shall equal the Make-Whole Amount plus
accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date. The "Make-Whole Amount" shall be equal to the greater of (i)
100% of the principal amount hereof or (ii) as determined by a Quotation Agent
(as defined below), the sum of the present values of the principal amount and
premium payable as part of the Redemption Price with respect to an optional
redemption hereof on February 4, 2007, together with scheduled payments of
interest from the Redemption Date to February 4, 2007 (the "Remaining Life"), in
each case discounted to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of 30-day months) at the Adjusted Treasury Rate (as
defined below).
"Adjusted Treasury Rate" means with respect to any Redemption Date,
the Treasury Rate (as defined below) plus (i) 1.10% if such Redemption Date
occurs on or before February 4, 1998 or (ii) .50% if such Redemption Date
occurs after February 4, 1998.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the immediately prior week, appearing in the most
recently published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life (if
no maturity is within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to the Remaining
Life shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue (as defined below), calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price (as defined below) for such Redemption
Date. The Treasury Rate shall be calculated on the third Business Day preceding
the Redemption Date.
A-8
<PAGE>
"Comparable Treasury Issue" means, with respect to any Redemption
Date, the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after February 4, 2007,
the two most closely corresponding United States Treasury securities shall be
used as the Comparable Treasury Issue, and the Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding to the nearest
month using such securities.
"Comparable Treasury Price" means (i) the average of five Reference
Treasury Dealer Quotations (as defined below) for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(ii) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Quotation Agent" means Goldman, Sachs & Co. and their successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Each Security of this series that shall be subject to a partial
redemption shall be redeemable only in the amount of $1000 or, in the case the
Securities of this Series are issued to the Securities Trust, $1000, or integral
multiples thereof.
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
A-9
<PAGE>
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
the Securities of a series issued to the Securities Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series fail to declare the principal amount
(or, if the Securities of that series are Discount Securities, such portion of
the principal amount as may be specified in the terms of that series) of all the
Securities of that series to be immediately due and payable, the
A-10
<PAGE>
holders of at least 25% in aggregate liquidation amount of the corresponding
series of Capital Securities then outstanding shall have such right by a notice
in writing to the Company and the Trustee; and upon any such declaration such
principal amount (or specified amount) of and the accrued interest (including
any Additional Interest) on all the Securities of such series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article Thirteen of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
A-11
<PAGE>
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
A-12
<PAGE>
EXHIBIT 4.3-A
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
HOUSTON LIGHTING & POWER COMPANY, as Depositor,
THE BANK OF NEW YORK,
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of February 4, 1997
HL&P CAPITAL TRUST I
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I Defined Terms 1
SECTION 1.1 Definitions 1
ARTICLE II Establishment of the Trust 10
SECTION 2.1 Name. 10
SECTION 2.2 Office of the Delaware Trustee; Principal Place of Business;
Agents for Service of Process 10
SECTION 2.3 Initial Contribution of Trust Property; Organizational Expenses. 10
SECTION 2.4 Issuance of the Preferred Securities. 11
SECTION 2.5 Issuance of the Common Securities; Subscription
and Purchase of Debentures 11
SECTION 2.6 Declaration of Trust. 11
SECTION 2.7 Authorization to Enter into Certain Transactions. 12
SECTION 2.8 Assets of Trust. 17
SECTION 2.9 Title to Trust Property. 18
ARTICLE III Payment Account 18
SECTION 3.1 Payment Account. 18
ARTICLE IV Distributions; Redemption 18
SECTION 4.1 Distributions. 18
SECTION 4.2 Redemption. 19
SECTION 4.3 Subordination of Common Securities. 21
SECTION 4.4 Payment Procedures. 22
SECTION 4.5 Tax Returns and Reports. 22
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Trust. 23
SECTION 4.7 Payments under Indenture or Pursuant to Direct Actions. 23
ARTICLE V Trust Securities Certificates 23
SECTION 5.1 Initial Ownership 23
SECTION 5.2 The Trust Securities Certificates 23
SECTION 5.3 Execution and Delivery of Trust Securities Certificates 24
SECTION 5.4 Registration of Transfer and Exchange
of Preferred Securities Certificates 24
SECTION 5.5 Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates 25
SECTION 5.6 Persons Deemed Securityholders 25
SECTION 5.7 Access to List of Securityholders' Names and Addresses 26
SECTION 5.8 Maintenance of Office or Agency 26
SECTION 5.9 Appointment of Paying Agent 26
SECTION 5.10 Ownership of Common Securities by Depositor 27
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.11 Book-Entry Preferred Securities Certificates;
Common Securities Certificate 27
SECTION 5.12 Notices to Clearing Agency 28
SECTION 5.13 Definitive Preferred Securities Certificates 28
SECTION 5.14 Rights of Securityholders 29
SECTION 5.15 CUSIP Numbers 31
ARTICLE VI Acts of Securityholders; Meetings; Voting 32
SECTION 6.1 Limitations on Voting Rights 32
SECTION 6.2 Notice of Meetings 33
SECTION 6.3 Meetings of Preferred Securityholders 33
SECTION 6.4 Voting Rights 33
SECTION 6.5 Proxies, Etc. 33
SECTION 6.6 Securityholder Action by Written Consent 34
SECTION 6.7 Record Date for Voting and Other Purposes 34
SECTION 6.8 Acts of Securityholders 34
SECTION 6.9 Inspection of Records 35
ARTICLE VII Representations and Warranties 36
SECTION 7.1 Representations and Warranties of the Property
Trustee and the Delaware Trustee 36
SECTION 7.2 Representations and Warranties of Depositor 37
ARTICLE VIII The Trustees 37
SECTION 8.1 Certain Duties and Responsibilities 37
SECTION 8.2 Certain Notices 40
SECTION 8.3 Certain Rights of Property Trustee 40
SECTION 8.4 Not Responsible for Recitals or Use of Proceeds 43
SECTION 8.5 May Hold Securities 43
SECTION 8.6 Compensation; Indemnity; Fees 43
SECTION 8.7 Corporate Property Trustee Required; Eligibility of Trustees 45
SECTION 8.8 Conflicting Interests 45
SECTION 8.9 Co-Trustees and Separate Trustee 45
SECTION 8.10 Resignation and Removal; Appointment of Successor 47
SECTION 8.11 Acceptance of Appointment by Successor 48
SECTION 8.12 Merger, Conversion, Consolidation or Succession to Business 49
SECTION 8.13 Preferential Collection of Claims Against Depositor or Trust 49
SECTION 8.14 Trustee May File Proofs of Claim. 49
SECTION 8.15 Reports by Property Trustee 50
SECTION 8.16 Reports to the Property Trustee 50
SECTION 8.17 Evidence of Compliance with Conditions Precedent 51
SECTION 8.18 Number of Trustees 51
SECTION 8.19 Delegation of Power 51
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE IX Termination, Liquidation and Merger 52
SECTION 9.1 Termination Upon Expiration Date 52
SECTION 9.2 Early Termination 52
SECTION 9.3 Termination 52
SECTION 9.4 Liquidation 53
SECTION 9.5 Mergers, Consolidations, Amalgamations or
Replacements of the Trust 54
ARTICLE X Miscellaneous Provisions 55
SECTION 10.1 Limitation of Rights of Securityholders 55
SECTION 10.2 Liability of Holder of Common Securities 55
SECTION 10.3 Amendment 55
SECTION 10.4 Separability 57
SECTION 10.5 Governing Law 57
SECTION 10.6 No Recourse 57
SECTION 10.7 Payments Due on Non-Business Day 58
SECTION 10.8 Successors 58
SECTION 10.9 Headings 58
SECTION 10.10 Reports, Notices and Demands 58
SECTION 10.11 Agreement Not to Petition 59
SECTION 10.12 Trust Indenture Act; Conflict with Trust Indenture Act 59
SECTION 10.13 Acceptance of Terms of Trust Agreement, Guarantee and Indenture 60
EXHIBIT A Certificate of Trust
EXHIBIT B Certificate Depository Agreement
EXHIBIT C Common Securities Certificate
EXHIBIT D Expense Agreement
EXHIBIT E Preferred Securities Certificate
</TABLE>
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<PAGE>
HL&P CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- ------------------ ------------------
<S> <C>
((S)) 310 (a)(1) 8.7
(a)(2) 8.7
(a)(3) 8.9
(a)(4) 2.7(a)(ii)
(b) 8.8
((S)) 311 (a) 8.13
(b) 8.13
((S)) 312 (a) 5.7
(b) 5.7
(c) 5.7
((S)) 313 (a) 8.15(a)
(a)(8) 8.15(b)
(b) 8.15(b)
(c) 10.10
(d) 8.15(a)
((S)) 314 (a) 8.16
(b) Not Applicable
(c)(1) 8.17
(c)(2) 8.17
(c)(3) Not Applicable
(d) Not Applicable
(e) 1.1, 8.17
((S)) 315 (a) 8.1(a), 8.3(a)
(b) 8.2, 10.10
(c) 8.1(d)
(d) 8.1, 8.3
(e) Not Applicable
((S)) 316 (a) Not Applicable
(a)(1)(A) Not Applicable
(a)(1)(B) Not Applicable
(a)(2) Not Applicable
(b) 5.14
(c) 6.7
((S)) 317 (a)(1) Not Applicable
(a)(2) Not Applicable
(b) 5.9
((S)) 318 (a) 10.12
- ----------
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
-i-
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of February 4, 1997, among
(a) Houston Lighting & Power Company, a Texas corporation (including any
successors or assigns, the "Depositor"), (b) The Bank of New York, a New York
banking corporation, as property trustee (in each such capacity, the "Property
Trustee" and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank"), (c) The Bank of New York (Delaware), a Delaware
banking corporation, as Delaware trustee (the "Delaware Trustee"), (d) Norman J.
Shuman, an individual, Linda Geiger, an individual, and Philip W. Parker, an
individual, each of whose address is 200 West 9th Street Plaza, Box 2015,
Wilmington, Delaware 19899 (each an "Administrative Trustee" and collectively
the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and
the Administrative Trustees referred to collectively as the "Trustees") and (e)
the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and created a business trust pursuant to the Delaware Business Trust
Act by entering into that certain Trust Agreement, dated as of January 10, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on January 10, 1997, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (a) the issuance of the Common Securities by the Trust to
the Depositor, (b) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (c) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(d) the appointment of the Property Trustee and the Administrative Trustees;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
Defined Terms
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
-1-
<PAGE>
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on Debentures having a principal
amount equal to such Liquidation Amount for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each of the Persons identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in such
Person's capacity as Administrative Trustee of the Trust formed and continued
hereunder and not in such Person's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
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<PAGE>
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.11.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the
Property Trustee and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means the Time of Delivery, as defined in the Underwriting
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
-3-
<PAGE>
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means, (a) when used with respect to the Property
Trustee, the principal corporate trust office of the Property Trustee located at
101 Barclay Street, Floor 21 West, New York, New York 10286 and, (b) when used
with respect to the Debenture Trustee, the principal corporate trust office of
the Debenture Trustee located in New York, New York.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's 8.125%
Junior Subordinated Deferrable Interest Debentures, Series A, or any debentures
or other indebtedness of the Depositor issued in exchange for such 8.125% Junior
Subordinated Deferrable Interest Debentures, Series A, in either case as issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificates as provided in Section 5.11(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ((S)) 3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in
the preamble to this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor trustee
appointed as herein provided.
-4-
<PAGE>
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Direct Action" has the meaning specified in Section 5.14(c).
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with in clause (b) or (c) above) and continuation of such default or breach for
a period of 90 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees and to the Depositor by the Holders of at
least 25% in aggregate Liquidation Amount of the Outstanding Preferred
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(e) the occurrence of a Bankruptcy Event with respect to the Trust.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement, dated as of February 4, 1997,
between the Depositor, as the holder of all the Common Securities, and The Bank
of New York, a New York
-5-
<PAGE>
banking corporation, as guarantee trustee, for the benefit of the Holders of the
Trust Securities, as amended from time to time.
"Holder" has the meaning specified in the definition of the term
"Securityholder."
"Indenture" means the Junior Subordinated Indenture, dated as of February
1, 1997, between the Depositor and the Debenture Trustee, as trustee, as amended
or supplemented from time to time.
"Legal Action" has the meaning specified in Section 2.7(a)(i)(D).
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture,
the proceeds of which will be used to pay the Redemption Price of such Trust
Securities and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a dissolution and winding up of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a dissolution and winding up
of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, the President or a Vice President, and by the
Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary, of the Depositor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 8.17 shall be the principal executive, financial or
accounting officer of the Depositor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor, which may be an employee
of the Depositor but not an employee of the Trust or the Property Trustee, and
who shall be reasonably acceptable to the Property Trustee. Any Opinion of
Counsel pertaining to federal income tax matters may rely on published rulings
of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in the recitals
hereto.
"Outstanding," when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Securities Registrar or
delivered to the Securities Registrar for cancellation;
(b) Trust Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Property Trustee or any Paying
Agent for the Holders of such Trust Securities; provided that, if such Trust
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of
which other Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that a Responsible Officer of such Trustee
actually knows to be so owned shall be so disregarded and (b) the foregoing
shall not apply at any time when all of the outstanding Preferred Securities are
owned by the Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee
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establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9, and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its Global Trust
Services Office for the benefit of the Securityholders in which all amounts paid
in respect of the Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached as Exhibit E.
"Property Trustee" means the Person identified as the "Property Trustee" in
the preamble to this Trust Agreement solely in its capacity as Property Trustee
of the Trust heretofore formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the stated maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.
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"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions (including Additional Amounts, if applicable) to the Redemption
Date, plus the related amount of the premium, if any, paid by the Depositor upon
the concurrent redemption of a Like Amount of Debentures, allocated on a pro
rata basis (based on Liquidation Amounts) among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" means, with respect to a Trustee, any Vice President,
any Assistant Vice President, any Assistant Secretary, any Assistant Treasurer
or any other officer of the Corporate Trust Office of such Trustee, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Trust Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act; provided, however, that in determining whether the Holders
of the requisite amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, then for the purpose of any such
determination, so long as Definitive Preferred Securities Certificates have not
been issued, the term "Securityholders" or "Holders" as used herein shall refer
to the Owners.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including (a) all exhibits hereto and (b) for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the Property
Trustee under the Expense Agreement, (c) any cash on deposit in, or owing to,
the Payment Account and (d) all
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proceeds and rights in respect of the foregoing, and any other property and
assets for the time being held or deemed to be held by the Property Trustee
pursuant to the terms of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means the Persons identified as "Trustees" in the preamble to
this Trust Agreement solely in their capacities as Trustees of the Trust formed
and continued hereunder and not in their individual capacities, or their
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Underwriting Agreement" means the Underwriting Agreement, dated January
30, 1997, among the Trust, the Depositor and the underwriters named therein.
ARTICLE II.
Establishment of the Trust
SECTION 2.1. Name.
The Trust continued hereby shall be known as "HL&P Capital Trust I," as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may conduct the business of the Trust, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued. The Administrative Trustees may change the name of the Trust from time
to time following written notice to the Holders.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business;
Agents for Service of Process.
The address of the Delaware Trustee in the State of Delaware is The Bank of
New York (Delaware), White Clay Center, Route 273, Newark, Delaware, 19711,
Attention: Corporate Trust Department, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is 200 West 9th Street Plaza, Box 2015, Wilmington, Delaware 19899. All agents
for service of process for the Trust shall be located outside the State of
Texas.
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The
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Depositor shall pay organizational expenses of the Trust as they arise or shall,
upon request of any Trustee, promptly reimburse such Trustee for any such
expenses paid by such Trustee. The Depositor shall make no claim upon the Trust
Property for the payment of such expenses.
SECTION 2.4. Issuance of the Preferred Securities.
On January 30, 1997, the Depositor, on behalf of the Trust and pursuant to
the Original Trust Agreement, executed and delivered the Underwriting Agreement.
On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver in accordance with Section
5.11 Preferred Securities Certificates, registered in the name of the nominee of
the initial Clearing Agency, in an aggregate amount of 10,000,000 Preferred
Securities having an aggregate Liquidation Amount of $250,000,000, against
receipt of such aggregate purchase price of such Preferred Securities of
$250,000,000, which amount the Administrative Trustee shall promptly deliver to
the Property Trustee.
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures.
On the Closing Date, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2 and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of 309,280 Common Securities having an aggregate Liquidation
Amount of $7,732,000 against payment by the Depositor of such amount, which
amount such Administrative Trustee shall promptly deliver to the Property
Trustee. Contemporaneously therewith, an Administrative Trustee, on behalf of
the Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Trust and having an aggregate principal amount
equal to $257,732,000, and, in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $257,732,000 (being the sum of the amounts delivered to the
Property Trustee pursuant to (a) the second sentence of Section 2.4 and (b) the
first sentence of this Section 2.5).
SECTION 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole
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and limited purpose of fulfilling the requirements of Section 3807 of the
Delaware Business Trust Act and for taking such actions as are required to be
taken by a Delaware trustee under the Delaware Business Trust Act.
SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section, Article VIII and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including, without limitation, the following:
(i) As among the Trustees, the Administrative Trustees, acting singly or
jointly, shall have the exclusive power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) to acquire the Debentures with the proceeds of the sale of the
Trust Securities; provided, however, the Administrative Trustees shall
cause legal title to all of the Debentures to be vested in, and the
Debentures to be held of record in the name of, the Property Trustee for
the benefit of the Trust and the Securityholders;
(B) to give the Depositor and the Property Trustee prompt written
notice of the occurrence of any Special Event (as defined in the Indenture)
and to take any ministerial actions in connection therewith; provided, that
the Administrative Trustees shall consult with the Depositor and the
Property Trustee before taking or refraining to take any ministerial action
in relation to a Special Event;
(C) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of (S)316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Securityholders as to such actions and applicable
record dates;
(D) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 2.7(a)(ii)(E), the Property
Trustee has the power to bring such Legal Action;
(E) to delegate to or otherwise engage employees and agents of the
Trust (who may be designated as officers with titles) and managers,
contractors, advisors and consultants and pay reasonable compensation for
such services;
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(F) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(G) to give the certificate to the Property Trustee required by (S)
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Administrative Trustee;
(H) to take all actions and perform such duties as may be required of the
Administrative Trustees pursuant to the terms of this Trust Agreement;
(I) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Securityholders or to enable
the Trust to effect the purposes for which the Trust has been created;
(J) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Administrative Trustees, on behalf of the
Trust;
(K) to issue and sell the Trust Securities;
(L) to cause the Trust to enter into, and to execute, deliver and perform
on behalf of the Trust, the Expense Agreement and the Certificate Depository
Agreement and such other agreements as may be necessary or desirable in
connection with the purposes and function of the Trust;
(M) to assist in the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or blue sky laws,
and the qualification of this Trust Agreement as a trust indenture under the
Trust Indenture Act;
(N) to assist in the listing, if any, of the Preferred Securities upon such
securities exchange or exchanges or automated quotation system or systems as
shall be determined by the Depositor and the registration of the Preferred
Securities under the Securities Exchange Act of 1934, as amended, and the
preparation and filing of all periodic and other reports and other documents
pursuant to the foregoing;
(O) to send notices (other than notices of default) and other information
regarding the Trust Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
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(P) to appoint a Paying Agent, authenticating agent and Securities
Registrar in accordance with this Trust Agreement;
(Q) to register transfers of the Trust Securities in accordance with
this Trust Agreement;
(R) in connection with the winding up of the affairs of and
liquidation of the Trust, to prepare, execute and file the certificate of
cancellation with the Secretary of State of the State of Delaware;
(S) to execute and deliver any closing certificates pursuant to the
Underwriting Agreement and to make application for a taxpayer
identification number for the Trust;
(T) unless otherwise determined by the Depositor, the Property Trustee
or the Administrative Trustees, or as otherwise required by the Delaware
Business Trust Act or the Trust Indenture Act, to execute on behalf of the
Trust (either acting alone or together with any or all of the
Administrative Trustees) any documents that the Administrative Trustees
have the power to execute pursuant to this Trust Agreement; and
(U) to take any action incidental to the foregoing as the Trustees may
from time to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement for the benefit of the Securityholders
(without consideration of the effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the exclusive
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) to engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Trust Securities to
the extent the Debentures are redeemed or mature;
(B) upon notice of distribution issued by the Administrative Trustees
in accordance with the terms of this Trust Agreement, to engage in such
ministerial activities as shall be necessary or appropriate to effect
promptly the distribution pursuant to terms of this Trust Agreement of
Debentures to Securityholders ;
(C) subject to the terms hereof, to exercise all of the rights, powers
and privileges of a holder of the Debentures under the Indenture and, if a
Debenture Event of Default occurs and is continuing, shall enforce for the
benefit of, and subject to the rights of, the Securityholders, its rights
as holder of the Debentures under the Indenture;
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(D) to take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust Agreement;
(E) to take any Legal Action specifically required of the Property Trustee
pursuant to the terms of this Trust Agreement which arises out of or in
connection with an Event of Default or the Property Trustee's duties and
obligations under this Trust Agreement, the Delaware Business Trust Act or the
Trust Indenture Act;
(F) to establish and maintain the Payment Account;
(G) to receive and hold legal title to the Debentures as described herein;
(H) to collect interest, principal and any other payments made in respect
of the Debentures and the holding of such amounts in the Payment Account;
(I) to distribute through the Paying Agent amounts owed to the
Securityholders in respect of the Trust Securities;
(J) to exercise all of the rights, powers and privileges of a holder of the
Debentures;
(K) to send notices of default and other information regarding the Trust
Securities and the Debentures to the Securityholders in accordance with this
Trust Agreement;
(L) to distribute the Trust Property in accordance with the terms of this
Trust Agreement;
(M) to the extent provided in this Trust Agreement, to wind up the affairs
of and liquidate the Trust and to execute the certificate of cancellation with
the Secretary of State of the State of Delaware;
(N) after an Event of Default (other than under paragraph (b), (c), (d) or
(e) of the definition of such term if such Event of Default is by or with
respect to the Property Trustee), to take any action incidental to the foregoing
as the Property Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement and to protect and
conserve the Trust Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder); and
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(O) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to be classified as an association taxable as a corporation or as other
than a grantor trust for United States federal income tax purposes, (iv) incur
any indebtedness for borrowed money or issue any other debt, (v) take or consent
to any action that would result in the placement of a Lien on any of the Trust
Property, (vi) issue any securities other than the Trust Securities, (vii) have
any power to, or agree to any action by the Depositor that would, vary the
investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of
the Trust or of the Securityholders or (viii) on or after the date hereof, enter
into any contract or agreement for or on behalf of the Trust (other than the
Certificate Depository Agreement or any other depositary agreement or any
agreement with any securities exchange or automated quotation system) that does
not expressly provide that the Holders of the Preferred Securities, in their
capacities as such, have limited liability (in accordance with the provisions of
the Delaware Business Trust Act) for the liabilities and obligations of the
Trust, which express provision may be in the following form, "The Holders of the
Preferred Securities, in their capacities as such, shall not be personally
liable for any liabilities or obligations of the Trust arising out of this
Agreement, and the parties hereto hereby agree that the Holders of the Preferred
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware." The Administrative Trustees shall defend all claims and demands
of all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Trust or the Securityholders in their capacity as
Securityholders. All actions taken by the Administrative Trustees shall be
taken outside of the State of Texas.
(c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor or the Trust in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all respects
without any further act, vote or approval of any Person notwithstanding any
other provision of this Agreement, the Delaware Business Trust Act or other
applicable law, rule or regulation):
(i) the preparation and filing by the Trust with the Commission and the
execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, the Debentures
and the Guarantee, and certain other securities which could have been
issued in lieu of the Preferred Securities, including any amendments
thereto;
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(ii) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any
such states;
(iii) if deemed desirable by the Depositor, the preparation for filing
by the Trust and execution on behalf of the Trust of an application to the
New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market or any other automated quotation system for listing upon
notice of issuance of any Preferred Securities and filing with such
exchange or self-regulatory organization such notifications and documents
as may be necessary from time to time to maintain such listing;
(iv) if required, the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;
(v) the negotiation of the terms of, the execution and delivery of,
and the performance of its obligations under, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, or to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of the Depositor and any Administrative
Trustee determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not adversely affect in any material
respect the interests of the Holders of the Preferred Securities.
SECTION 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
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SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee in trust for the benefit of the Trust and the
Securityholders in accordance with this Trust Agreement. The right, title and
interest of the Property Trustee to the Debentures shall vest automatically in
each Person who may thereafter be appointed as Property Trustee in accordance
with the terms hereof. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
ARTICLE III.
Payment Account
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest (including any Additional
Interest, as defined in the Indenture) or premium or Additional Sums on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV.
Distributions; Redemption
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in the
Trust Property, and Distributions (including any Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including any Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
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(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from February
4, 1997, and, except in the event (and to the extent) that the Depositor
exercises its right to defer the payment of interest on the Debentures
pursuant to the Indenture, shall (assuming that payments of interest on the
Debentures are made when due) be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing on March 31,
1997. If any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment
of such Distribution shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date
(each date on which Distributions are payable in accordance with this
Section 4.1(a), a "Distribution Date").
(ii) Assuming payments of interest on the Debentures are made when due
(and before giving effect to Additional Amounts, if applicable),
Distributions on the Trust Securities shall be payable at a rate of 8.125%
per annum of the Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full Distribution period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial period shall be computed on the basis of a
360-day year of twelve 30-day months and the number of days elapsed in a
partial month. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities at the close of business on the relevant
record date, which shall be at the close of business on the Business Day
immediately preceding such Distribution Date; provided, however, that in the
event that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the close of business on the fifteenth day of the
month immediately preceding the relevant Distribution Date (whether or not such
record date is a Business Day).
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
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(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Trust Securities to be redeemed, at
such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date; and
(vi) if the Preferred Securities are no longer in book-entry-only form,
the place and address where the Holders shall surrender their Preferred
Securities Certificates.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption of
Debentures. Redemptions of the Trust Securities shall be made and the Redemption
Price shall be payable on each Redemption Date only to the extent that the Trust
has funds then on hand and available in the Payment Account for the payment of
such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price, and an Administrative Trustee or the Property
Trustee will give such Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the Holders thereof. If the Preferred Securities
are no longer in book-entry-only form, the Property Trustee, subject to Section
4.2(c), will irrevocably deposit with the Paying Agent funds sufficient to pay
the applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof
upon surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Securityholders holding Trust
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Securities so called for redemption will cease, except the right of such
Securityholders to receive the Redemption Price and any Distribution payable on
or prior to the Redemption Date, but without interest thereon, and such Trust
Securities will cease to be outstanding. In the event that any date on which
any Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accumulate, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities to
the date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of calculating
the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities at the close of business on the relevant record date, which
shall be at the close of business on the Business Day immediately preceding the
relevant Redemption Date; provided, however, that in the event that the
Preferred Securities do not remain in book-entry-only form, the relevant record
date shall be the close of business on the date fifteen days prior to the
relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption, by lot or by such other method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the Security Registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities
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pursuant to Section 4.2(f); provided, however, that if on any Distribution Date
or Redemption Date any Event of Default resulting from a Debenture Event of
Default shall have occurred and be continuing, no payment of any Distribution
(including Additional Amounts, if applicable) on, or Redemption Price of, any
Common Security, and no other payment on account of the redemption, liquidation
or other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions (including Additional
Amounts, if applicable) on all Outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price, the full amount of such Redemption Price on all
Outstanding Preferred Securities then called for redemption, shall have been
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated.
Until any such Event of Default under this Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities, and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee to
act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable Distribution Dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed upon between
the Property Trustee and the Common Securityholder.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form and the
information required to be provided on such form. The Administrative Trustees
shall provide the Depositor and the Property Trustee with a copy of all such
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returns and reports promptly after such filing or furnishing. The Trustees
shall comply with United States federal withholding and backup withholding tax
laws and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority; provided, however, that under no circumstances
shall the Property Trustee have any liability for such sums, including non-
receipt of any Additional Sums under the Debentures.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to Section 5.8 of
the Indenture or Section 5.14 of this Trust Agreement.
ARTICLE V.
Trust Securities Certificates
SECTION 5.1. Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples thereof. The Preferred
Securities Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of at least one Administrative Trustee. The Common
Securities Certificates shall be executed on behalf of the Trust by manual
signature of at least one Administrative Trustee. A Preferred Securities
Certificate bearing a facsimile signature of an Administrative Trustee shall be
authenticated by the Property Trustee. Trust Securities Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at
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the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 5.4, 5.11 and 5.13.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board and
chief executive officer, its president, any executive vice president, any senior
vice president or any vice president, treasurer or assistant treasurer or
controller without further corporate action by the Depositor, in authorized
denominations. Upon a written order of the Trust signed by at least one
Administrative Trustee, the Property Trustee shall authenticate the Preferred
Securities Certificate for original issuance.
SECTION 5.4. Registration of Transfer and Exchange of Preferred
Securities Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which the
registrar designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, or if such
execution is by facsimile signature, the Administrative Trustee or any one of
them shall deliver a written order for the Property Trustee to authenticate and
deliver, in which case the Property Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution (manual or facsimile) by such
Administrative Trustee or Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. The
Administrative Trustees shall not be required to issue, transfer or exchange any
Preferred Securities that have been called for redemption. At the option of a
Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
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Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by an
Administrative Trustee in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust, shall
execute or, if such Trust Securities Certificate is a Preferred Securities
Certificate and such execution is by facsimile signature, the Administrative
Trustee or any one of them shall deliver a written order for the Property
Trustee to authenticate and deliver, in which case the Property Trustee shall
authenticate, and make available for delivery, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new
Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.6. Persons Deemed Securityholders.
The Trustees and the Securities Registrar shall treat the Person in whose
name any Trust Securities Certificate shall be registered in the Securities
Register as the owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
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SECTION 5.7. Access to List of Securityholders' Names and Addresses.
The Administrative Trustees or the Depositor shall furnish or cause to be
furnished (a) to the Property Trustee, semiannually, not more than 15 days after
June 15 and December 15 in each year, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the
Securityholders as of such June 15 and December 15, and (b) to the Property
Trustee, promptly after receipt by any Administrative Trustee or the Depositor
of a request therefor from the Property Trustee in order to enable the Property
Trustee to discharge its obligations under this Trust Agreement, in each case to
the extent such information is in the possession or control of the
Administrative Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee, shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each Owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee, the
Delaware Trustee or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 5.8. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attn.: Corporate Trust Trustee
Administration, as its principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor, the
Bank and the Securityholders of any change in the location of the Securities
Register or any such office or agency.
SECTION 5.9. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent if such Trustees
determine in their sole discretion that the Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect. The
Paying Agent shall initially be the Bank, and any co-paying agent chosen by the
Bank, and acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Paying Agent
or a successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
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Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in its role as
Paying Agent, for so long as the Bank shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in this Trust Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. The Holder of the Common Securities
may not transfer the Common Securities except (a) in connection with a
consolidation or merger of the Depositor into any other Person, or any
conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (b) to the Depositor or an Affiliate thereof in compliance with
applicable law (including the Securities Act of 1933, as amended, and applicable
state securities and blue sky laws), and in either case only upon an effective
assignment and delegation by the Holder of the Common Securities to its
transferee of all of its rights and obligations under the Expense Agreement. To
the fullest extent permitted by law, any attempted transfer of the Common
Securities other than as set forth in the immediately preceding sentence shall
be void. The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating substantially
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF
THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.10 OF THE TRUST
AGREEMENT AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT
OF THE EXPENSE AGREEMENT REFERRED TO THEREIN."
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
Definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 5.13.
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Unless and until Definitive Preferred Securities Certificates have been issued
to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates and
the giving of instructions or directions to Owners of Preferred Securities
evidenced by Book-Entry Preferred Securities Certificates) as the sole
Holder of Preferred Securities evidenced by Book-Entry Preferred Securities
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 5.13, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the Preferred
Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the
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Clearing Agency or (c) after the occurrence of a Debenture Event of Default,
Owners of Preferred Securities Certificates representing beneficial interests
aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustees shall notify
the Clearing Agency and the other Trustees and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten
Preferred Securities Certificate or Certificates representing the Book-Entry
Preferred Securities Certificates by the Clearing Agency, accompanied by
registration instructions, the Administrative Trustees, or any one of them,
shall execute or, if such execution is by facsimile signature, the
Administrative Trustee or any one of them shall deliver a written order for the
Property Trustee to authenticate, in which case the Property Trustee shall
authenticate, the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities Registrar
nor the Trustees shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive
Preferred Securities Certificates as Securityholders. The Definitive Preferred
Securities Certificates shall be typewritten, printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees that meets the requirements of any stock exchange or
automated quotation system on which the Preferred Securities are then listed or
approved for trading, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
SECTION 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property, giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and, when issued and
delivered to Securityholders against payment of the purchase price therefor,
will be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable as set
forth in the Indenture, the Holders of at least 25% in Liquidation Amount of the
Preferred Securities then Outstanding shall have the right to make such
declaration by a notice
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in writing to the Depositor and the Debenture Trustee; and upon any such
declaration such principal amount of and the accrued interest on all of the
Debentures shall become immediately due and payable, provided that the payment
of principal, premium and interest on such Debentures shall remain subordinated
to the extent provided in the Indenture.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, if the Property Trustee fails to annul any such declaration and waive
such default, the Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Depositor has paid or deposited with the Debenture Trustee a sum
sufficient to pay:
(A) all overdue installments of interest (including any Additional
Interest (as defined in the Indenture)) on all of the Debentures,
(B) the principal of (and premium, if any, on) any Debentures which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures, and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Property Trustee, their agents
and counsel; and
(ii) all Events of Default with respect to the Debentures, other than the
nonpayment of the principal of the Debentures which has become due solely by
such acceleration, have been cured or waived as provided in Section 5.13 of the
Indenture.
The Holders of a majority in aggregate Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record
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date shall be at the close of business on the day the Property Trustee receives
such notice. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided, that, unless such
declaration of acceleration, or rescission and annulment, as the case may be,
shall have become effective by virtue of the requisite percentage having joined
in such notice prior to the day which is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or
a proxy of a Holder, from giving, after expiration of such 90-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Preferred Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of any
amounts payable in respect of Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action"). Except as set forth in Section 5.14(b) and this
Section 5.14(c), the Holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Debentures.
(d) Except as otherwise provided in paragraphs (a), (b) and (c) of this
Section 5.14, the Holders of at least a majority in aggregate Liquidation Amount
of the Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
any default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.15. CUSIP Numbers.
The Trust in issuing the Preferred Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Preferred Securities or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Preferred Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Depositor shall promptly notify the Property Trustee in writing of any
change in CUSIP numbers.
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ARTICLE VI.
Acts of Securityholders; Meetings; Voting
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee, on
behalf of the Trust, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or execute any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Preferred Securities, except by a
subsequent vote of the Holders of Preferred Securities. The Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Trustees shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in such matters to
the effect that such action shall not cause the Trust to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution and winding-up of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Preferred Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a majority in Liquidation Amount of the
Outstanding Preferred Securities. Notwithstanding any other provision of this
Trust Agreement, no amendment to this Trust Agreement may be made if, as a
result of such amendment,
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it would cause the Trust to be classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.10 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be
so considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Preferred
Securityholders to vote on any matter upon the written request of the Preferred
Securityholders of record of at least 25% of the Outstanding Preferred
Securities (based upon their Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
Preferred Securityholders to vote on any matters as to which Preferred
Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding more
than a majority of the Preferred Securities (based upon their Liquidation
Amount) held by the Preferred Securities of record present, either in person or
by proxy, at such meeting shall constitute the action of the Preferred
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
SECTION 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5. Proxies, Etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be
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taken. Pursuant to a resolution of the Property Trustee, proxies may be
solicited in the name of the Property Trustee or one or more officers of the
Property Trustee. Only Securityholders of record shall be entitled to vote.
When Trust Securities are held jointly by several Persons, any one of them may
vote at any meeting in person or by proxy in respect of such Trust Securities,
but if more than one of them shall be present at such meeting in person or by
proxy, and such joint owners or their proxies so present disagree as to any vote
to be cast, such vote shall not be received in respect of such Trust Securities.
A proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
SECTION 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled
to notice of and to vote at any meeting or by written consent, or to participate
in any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
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The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents, each of which may do so pursuant to
such appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust or any person or entity.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
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ARTICLE VII.
Representations and Warranties
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Securityholders that:
(a) the Property Trustee is a New York banking corporation and is in
good standing under the laws of the State of New York;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation duly organized,
validly existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement
has been duly authorized by all necessary corporate or other action on the part
of the Property Trustee and the Delaware Trustee and does not require any
approval of stockholders of the Property Trustee and the Delaware Trustee and
such execution, delivery and performance will not (i) violate the charter or by-
laws of the Property Trustee or the Delaware Trustee, (ii) violate any provision
of, or constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound or (iii)
violate any law, governmental rule or regulation of the United States or the
State of Delaware, as the case may be, governing the banking or trust powers of
the Property Trustee or the Delaware Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Delaware
Trustee;
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(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any existing federal
law governing the banking or trust powers of the Property Trustee or the
Delaware Trustee, as the case may be, under the laws of the United States or the
State of Delaware; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement,
and the Securityholders will be, as of each such date, entitled to the benefits
of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII.
The Trustees
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, but subject to Section
8.1(c), no provision of this Trust Agreement shall require any of the Trustees
to expend or risk its or their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder, or in the
exercise of any of its or their rights or powers, if it or they shall have
reasonable grounds for believing that repayment of such funds or
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adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section
8.1. Nothing in this Trust Agreement shall be construed to release an
Administrative Trustee from liability for his or her own negligent action, his
or her own negligent failure to act, or his or her own willful misconduct. To
the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Administrative
Trustees otherwise existing at law or in equity, are agreed by the Depositor and
the Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees, their
officers, directors, shareholders and agents are not personally liable to it for
any amount distributable in respect of any Trust Security or for any other
liability in respect of any Trust Security. This Section 8.1(b) does not limit
the liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the
Property Trustee shall enforce this Trust Agreement for the benefit of the
Holders.
(d) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.11), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.14), the Property Trustee shall exercise such of the rights and
powers vested in it by this Trust Agreement, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
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(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement (including
pursuant to Section 10.11), and the Property Trustee shall not be liable except
for the performance of such duties and obligations as are specifically set forth
in this Trust Agreement (including pursuant to Section 10.11); and
(B) in the absence of bad faith on the part of the Property Trustee,
the Property Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Property Trustee and conforming to the requirements of
this Trust Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically required
to be furnished to the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Trust Agreement;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in Liquidation Amount of
the Trust Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Payment Account
shall be to deal with such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this Trust
Agreement and the Trust Indenture Act;
(v) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Depositor; and money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.1 and except to the extent otherwise
required by law;
(vi) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their respective
duties under this Trust Agreement, nor shall the Property Trustee be liable for
the default or misconduct of the Administrative Trustees or the Depositor; and
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(vii) subject to Section 8.1(c), no provision of this Trust
Agreement shall require the Property Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Property Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Trust Agreement
or adequate indemnity against such risk or liability is not reasonably
assured to it.
(f) The Administrative Trustees shall not be responsible for
monitoring the compliance by the other Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall any Administrative
Trustee be liable for the default or misconduct of any other Administrative
Trustee, the other Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within ten Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.10, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Administrative Trustee shall transmit,
in the manner and to the extent provided in Section 10.10, notice of such
exercise to the Securityholders and the Property Trustee, unless such exercise
shall have been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Preferred Securityholders are
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entitled to vote under the terms of this Trust Agreement, the Property Trustee
shall deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee shall
take such action, or refrain from taking such action, as the Property Trustee
shall be instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not receive such
instructions of the Depositor within ten Business Days after it has delivered
such notice, or such reasonably shorter period of time set forth in such notice
(which to the extent practicable shall not be less than two Business Days), it
may, but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Trust Agreement as it shall deem advisable and in the
best interests of the Securityholders, in which event the Property Trustee shall
have no liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its selection
(which counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders, pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
provided that nothing contained in this Section 8.3(g) shall be taken to relieve
the Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Trust
Agreement;
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(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys; provided that the Property Trustee shall be responsible for
its own negligence or misconduct with respect to the selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received and (iii) shall be protected in acting in
accordance with such instructions;
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement;
(l) the Property Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Trust Agreement; and
(m) the Property Trustee shall not be deemed to have notice of any
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Preferred Securities and this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on any Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which such Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to any Trustee shall be construed to be a duty.
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SECTION 8.4. Not Responsible for Recitals or Use of Proceeds.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, and, except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6. Compensation; Indemnity; Fees.
(a) The Depositor agrees:
(i) to pay to the Property Trustee and the Delaware Trustee from
time to time such compensation for all services rendered by them
hereunder as may be agreed by the Depositor and such Trustees from
time to time (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express
trust);
(ii) except as otherwise expressly provided herein, to reimburse
the Property Trustee and the Delaware Trustee upon request for all
reasonable expenses, disbursements and advances incurred or made by
such Trustees in accordance with any provision of this Trust Agreement
(including the reasonable compensation and the expenses and
disbursements of their agents and counsel), except any such expense,
disbursement or advance as may be attributable to their negligence,
bad faith or willful misconduct; and
(iii) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (A) the Property Trustee and the Delaware
Trustee, (B) any Affiliate of any such Trustee, (C) any officer,
director, shareholder, employee, representative or agent of any such
Trustee and (D) any employee or agent of the Trust or its Affiliates
(referred to herein as an "Indemnified Person"), from and against any
and all loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence, bad faith or misconduct with respect
to such acts or omissions.
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(b) The Trust shall:
(i) pay to the Administrative Trustees from time to time compensation
for all services rendered by them hereunder as may be agreed by the
Depositor and the Administrative Trustees from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, reimburse the
Administrative Trustees upon request for all expenses, disbursements and
advances incurred or made by such Trustees (including compensation and the
expenses and disbursements of their agents and counsel); and
(iii) to the fullest extent permitted by applicable law, indemnify and
hold harmless (A) each Administrative Trustee, (B) any Affiliate of each
such Trustee and (C) any officer, director, shareholder, employee,
representative or agent of each such Trustee to the same extent as the
Depositor has agreed to indemnify an Indemnified Person pursuant to Section
8.6(a)(iii) above.
(c) The provisions of this Section 8.6 shall survive the termination
of this Trust Agreement or the earlier termination or removal of any Trustee.
No Trustee may claim any Lien on any Trust Property as a result of any
amount due pursuant to this Section 8.6.
When any Trustee incurs expenses or renders services after an Event of
Default specified in clause (e) of the definition of Event of Default occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under the Bankruptcy Reform Act of 1978 or any
successor statute.
The Depositor and any Trustee may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor nor any Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
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SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and that has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law and that shall
act through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.
(b) The Guarantee and the Indenture shall be deemed to be specifically
described in this Trust Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all
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instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to the extent
required by law to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Depositor does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section shall either be (i) a natural person who is at least 21
years of age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one or
more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed by one or more of the
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such co-
trustee or separate trustee.
(b) The rights, powers, duties and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such co-
trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
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resignation or removal. A successor to any co-trustee or separate trustee so
resigning or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders
and by appointing a successor Relevant Trustee. The Relevant Trustee shall
appoint a successor by requesting from at least three Persons meeting the
eligibility requirements its expenses and charges to serve as the Relevant
Trustee on a form provided by the Administrative Trustees, and selecting the
Person who agrees to the lowest expenses and charges. If the instrument of
acceptance by the successor Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 60 days after the giving of such notice
of resignation, the Relevant Trustee may petition, at the expense of the Trust,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and, in the case of the Property Trustee, on behalf of the
Trust). An Administrative Trustee may be removed by the Common Securityholder
at any time. If the instrument of acceptance by the successor Trustee required
by Section 8.11 shall not have been delivered to the Relevant Trustee within 60
days after such removal, the Relevant Trustee may petition, at the expense of
the Trust, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the
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Common Securityholder delivered to the retiring Trustee, shall promptly appoint
a successor Trustee or Trustees, and the retiring Trustee shall comply with the
applicable requirements of Section 8.11. If the Property Trustee or the Delaware
Trustee shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when a
Debenture Event of Default shall have occurred and be continuing, the Preferred
Securityholders, by Act of the Securityholders of a majority in Liquidation
Amount of the Preferred Securities then Outstanding delivered to the retiring
Relevant Trustee, shall promptly appoint a successor Relevant Trustee or
Trustees, and such successor Trustee shall comply with the applicable
requirements of Section 8.11. If an Administrative Trustee shall resign, be
removed or become incapable of acting as Administrative Trustee, at a time when
a Debenture Event of Default shall have occurred and be continuing, the Common
Securityholder by Act of the Common Securityholder delivered to the
Administrative Trustee shall promptly appoint a successor Administrative Trustee
or Administrative Trustees and such successor Administrative Trustee or Trustees
shall comply with the applicable requirements of Section 8.11. If no successor
Relevant Trustee shall have been so appointed by the Common Securityholder or
the Preferred Securityholders and accepted appointment in the manner required by
Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders, in the manner provided in Section 10.10, and shall give notice
to the Depositor and to the Administrative Trustees. Each notice shall include
the name of the successor Relevant Trustee and the address of its Corporate
Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Holder of the Common Securities,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of the remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies the
eligibility requirement for the Administrative Trustees or the Delaware Trustee,
as the case may be, set forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing
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herein or in such amendment shall constitute such Relevant Trustees co-trustees
and upon the execution and delivery of such amendment the resignation or removal
of the retiring Relevant Trustee shall become effective to the extent provided
therein and each such successor Relevant Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on request of the Trust or any
successor Relevant Trustee, such retiring Relevant Trustee shall duly assign,
transfer and deliver to such successor Relevant Trustee all Trust Property, all
proceeds thereof and money held by such retiring Relevant Trustee hereunder with
respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all of the rights, powers and
trusts of the Relevant Trustee referred to herein.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Trust.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
SECTION 8.14. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Trust or any other obligor upon the Trust Securities
or the property of the Trust or of such other obligor or their creditors, the
Property Trustee (irrespective of whether any Distributions on the Trust
Securities shall then be due and payable and irrespective of whether the
Property Trustee shall have made any demand on the Trust for the payment of any
past due Distributions) shall be entitled and empowered, to the fullest extent
permitted by law, by intervention in such proceeding or otherwise:
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(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.15. Reports by Property Trustee.
(a) Not later than January 31 of each year, commencing with January
31, 1998, the Property Trustee shall transmit to all Securityholders in
accordance with Section 10.10, and to the Depositor, such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded, if
any, with the Commission and with the Depositor. The Depositor shall promptly
notify the Property Trustee when the Trust Securities are so listed or traded.
SECTION 8.16. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust
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Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Property Trustee is for informational purposes only and the
Property Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Depositor's compliance with any of its covenants
hereunder (as to which the Property Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 8.17. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.18. Number of Trustees.
(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.18(a), or if the
number of Administrative Trustees is increased pursuant to Section 8.18(a), a
vacancy shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to annul,
dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.19. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments
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either in the name of the Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
this Trust Agreement.
ARTICLE IX.
Termination, Liquidation and Merger
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2051 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Holder of the Common Securities;
(b) the written direction to the Property Trustee from the Holder of the
Common Securities at any time to dissolve the Trust and, after satisfaction or
the making of reasonable provision for the payment of liabilities to creditors
of the Trust, to distribute Debentures to Securityholders in exchange for the
Preferred Securities (which direction is optional and wholly within the
discretion of the Holder of the Common Securities);
(c) the redemption of all of the Preferred Securities in connection with
the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
of all amounts required to be distributed hereunder upon the liquidation of the
Trust pursuant to Section 9.4, or upon the redemption of all of the Trust
Securities pursuant to Section 4.2; (b) the payment of any expenses owed by the
Trust; and (c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.
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SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be wound up
by the Property Trustee as expeditiously as the Property Trustee determines to
be possible by distributing, after satisfaction or the making of reasonable
provision for the payment of liabilities to creditors of the Trust as provided
by applicable law, to each Securityholder a Like Amount of Debentures, subject
to Section 9.4(d). Notice of dissolution shall be given by the Property Trustee
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All such notices of
dissolution shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Property Trustee (after consultation with the
Administrative Trustees) shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the dissolution and winding-up of the Trust and distribution of the Debentures
to Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other stock exchange, interdealer quotation
system or self-regulatory organization on which the Preferred Securities are
then listed or traded, if any, (iv) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal will
be made to Holders of Trust Securities Certificates with respect to such
Debentures) and (v) all rights of Securityholders holding Trust Securities will
cease, except the right of such Securityholders to receive Debentures upon
surrender of Trust Securities Certificates.
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(d) In the event that, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, or if an Early
Termination Event specified in clause (c) of Section 9.2 occurs, the Trust
Property shall be liquidated, and the Trust shall be dissolved, wound-up and
terminated, by the Property Trustee in such manner as the Property Trustee
determines. In such event, in connection with the winding-up of the Trust,
Securityholders will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution and winding-up, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, subject
to the next succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution and winding-up pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a Debenture
Event of Default specified in Section 5.1(1) or 5.1(2) of the Indenture has
occurred and is continuing, the Preferred Securities shall have a priority over
the Common Securities as provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to Section 9.4 or this Section 9.5. At the request of the Holder of Common
Securities, with the consent of the Administrative Trustees and without the
consent of the Holders of the Preferred Securities, the Property Trustee or the
Delaware Trustee, the Trust may merge with or into, consolidate, amalgamate or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided that (a) such successor entity either (i) expressly assumes all
of the obligations of the Trust with respect to the Preferred Securities or (ii)
substitutes for the Preferred Securities other securities having substantially
the same material terms as the Preferred Securities (the "Successor Securities")
so long as the Successor Securities have the same priority as the Preferred
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise; (b) a trustee of such successor entity possessing the
same powers and duties as the Property Trustee is appointed to hold the
Debentures; (c) the Successor Securities are listed or traded, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed or traded, if any; (d) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization; (e) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the material rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any material
respect; (f) such successor
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entity has a purpose substantially identical to that of the Trust; (g) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Property Trustee has received an Opinion of Counsel to the effect
that (i) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the material rights, preferences and
privileges of the Holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (ii) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act; and (h) the Depositor or its permitted
transferee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of Holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as an association
taxable as a corporation or as other than a grantor trust for United States
federal income tax purposes.
ARTICLE X.
Miscellaneous Provisions
SECTION 10.1. Limitation of Rights of Securityholders.
The death, incapacity, liquidation, dissolution, termination or bankruptcy
of any Person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim, to the fullest extent permitted by law, an accounting, take any action
or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
SECTION 10.2. Liability of Holder of Common Securities.
Pursuant to Section 3803 of the Delaware Business Trust Act, the Depositor,
as the Holder of Common Securities, shall be liable for the debts and
obligations of the Trust as set forth in the Expense Agreement, which is made a
part hereof.
SECTION 10.3. Amendment.
(a) This Trust Agreement may be amended from time to time by the Property
Trustee, the Administrative Trustees and the Depositor, without the consent of
any Securityholders, (i) to cure any ambiguity, correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
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this Trust Agreement, which shall not be inconsistent with the other provisions
of this Trust Agreement, (ii) to modify, eliminate or add to any provisions of
this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will not be classified for United States federal income tax purposes as an
association taxable as a corporation or as other than a grantor trust at all
times that any Trust Securities are outstanding or to ensure that the Trust will
not be required to register as an investment company under the 1940 Act, or
(iii) pursuant to Section 8.11 hereof, to evidence the acceptance of the
appointment of a successor Relevant Trustee or to fill a vacancy created by an
increase in the number of Administrative Trustees; provided, however, that in
the case of clause (i) or (ii), such action shall not adversely affect in any
material respect the interests of any Securityholder, and any amendments of this
Trust Agreement shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 10.3(c) hereof, any provision of this
Trust Agreement may be amended by the Administrative Trustees and the Depositor
with (i) the consent of Trust Securityholders representing not less than a
majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust or cause the Trust to be an association taxable as a corporation
for United States federal income tax purposes or the Trust's exemption from
status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.3 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or cause the Trust to be
classified as an association taxable as a corporation or not to be a grantor
trust for United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this Trust
Agreement may not be amended in a manner which imposes any additional obligation
on the Depositor or the Administrative Trustees.
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(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
shall be entitled to receive an Opinion of Counsel and an Officers' Certificate
stating that any amendment to this Trust Agreement is in compliance with this
Trust Agreement.
SECTION 10.4. Separability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES, AND THE LIABILITY OF SECURITYHOLDERS FOR OBLIGATIONS
AND LIABILITIES OF THE TRUST SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. THE PROVISIONS OF SECTIONS 3540 AND 3561 OF TITLE 12 OF THE DELAWARE
CODE ANNOTATED SHALL NOT APPLY TO THE TRUST.
SECTION 10.6. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions (including Additional
Amounts, if applicable) on, and the Redemption Price of, Trust Securities, as
applicable, or for any claim upon the Trust Securities or otherwise in respect
thereof, shall be had against any Securityholder or any Affiliate of a
Securityholder, solely by reason of such person being a Securityholder or an
Affiliate of a Securityholder, it being understood that the Securityholders,
solely by reason of being a Securityholder, have limited liability (in
accordance with the provisions of the Delaware Business Trust Act) for the
liabilities and obligations of the Trust. Nothing contained in this Section
10.6 shall be construed to limit the exercise or enforcement, in accordance with
the terms of this Trust Agreement, the Guarantee and the Indenture, of rights
and remedies against the Trust or the Depositor.
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SECTION 10.7. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no Distributions shall
accumulate on such unpaid amount for the period after such date.
SECTION 10.8. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or any Trustee, including any
successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under Article VIII of
the Indenture and pursuant to which the assignee agrees in writing to perform
the Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.
SECTION 10.9. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.10. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Houston Lighting &
Power Company, Houston Industries Plaza, 1111 Louisiana Street, Houston, Texas
77002, Attention: Treasurer, facsimile no.: (713) 207-3301, or to such other
address as may be specified in a written notice by the Holder of the Common
Securities or the Depositor, as the case may be, to the Property Trustee. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission. Such notice, demand or other communication
to or upon the Depositor shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Depositor.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee, to 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Trustee
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Administration; (b) with respect to the Delaware Trustee, to White Clay Center,
Route 273, Newark, Delaware 19711, Attention: Corporate Trust Department; (c)
with respect to the Administrative Trustees, to 200 West 9th Street Plaza, Box
2105, Wilmington, Delaware 19899, marked "Attention Administrative Trustees of
HL&P Capital Trust I"; and (d) with respect to the Trust, to its principal
office specified in Section 2.2, with a copy to the Property Trustee. Such
notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.
SECTION 10.11. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.11, the
Property Trustee agrees, for the benefit of the Securityholders, that at the
expense of the Depositor, it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be stopped
and precluded therefrom and such other defenses, if any, as counsel for the
Trustee or the Trust may assert. The provisions of this Section 10.11 shall
survive the termination of this Trust Agreement.
SECTION 10.12. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required or
deemed provision shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or excluded, as the case may be.
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(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.13. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE
GUARANTEE AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
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In Witness Whereof, the parties hereof have entered into this Trust
Agreement as of the date first above written.
Houston Lighting & Power Company
By: /s/ LINDA GEIGER
____________________________
Name: Linda Geiger
Title: Authorized Agent
The Bank Of New York,
as Property Trustee
By: /s/ REMO J. REALE
____________________________
Name: Remo J. Reale
Title: Assistant Vice President
The Bank Of New York (Delaware),
as Delaware Trustee
By: /s/ WALTER M. GITLIN
____________________________
Name: Walter M. Gitlin
Title: Authorized Agent
/s/ NORMAN J. SHUMAN
____________________________
Norman J. Shuman,
as Administrative Trustee
/s/ LINDA GEIGER
____________________________
Linda Geiger,
as Administrative Trustee
/s/ PHILIP W. PARKER
____________________________
Philip W. Parker,
as Administrative Trustee
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EXHIBIT A
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST I
THIS CERTIFICATE OF TRUST of HL&P Capital Trust I (the "Trust"), dated
January 10, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act (12 Del.
C. (S) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is HL&P
Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at
the time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: ____________________________
Name:
Title:
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EXHIBIT B
February __, 1997
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099
Attention: Mr. John Drennan
General Counsel's Office
Re: HL&P Capital Trust I 8.125% Trust Preferred Securities, Series A,
CUSIP No. - 404202AA1
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to
the issuance and deposit with The Depository Trust Company ("DTC") of the HL&P
Capital Trust I 8.125% Trust Preferred Securities, Series A (the "Preferred
Securities"), of HL&P Capital Trust I, a Delaware business trust (the "Issuer"),
formed pursuant to a Trust Agreement between Houston Lighting & Power Company
(the "Corporation") and The Bank of New York, as Property Trustee, The Bank of
New York (Delaware), as Delaware Trustee, and the Administrative Trustees named
therein. The payment of distributions on the Preferred Securities, and payments
due upon liquidation of the Issuer or redemption of the Preferred Securities, to
the extent the Issuer has funds available for the payment thereof, are
guaranteed by the Corporation to the extent set forth in a Guarantee Agreement,
dated February 4, 1997 by the Corporation with respect to the Preferred
Securities. The Corporation and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated January 30, 1997 by and among the Underwriters, the
Issuer and the Corporation, and the Underwriters wish to take delivery of the
Preferred Securities through DTC. The Bank of New York is acting as transfer
agent and registrar with respect to the Preferred Securities (the "Transfer
Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's Rules with respect to the
Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC agree
among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about February 4, 1997, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the
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name of DTC's Preferred Securities nominee, Cede & Co., representing an
aggregate of 100% of the liquidation amount of such Preferred Securities. If
the aggregate liquidation amount of any maturity exceeds $200 million, one
certificate will be issued with respect to each $200 million of liquidation
amount and an additional certificate will be issued with respect to any
remaining liquidation amount. Each Preferred Security shall bear the following
legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
The Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Preferred Securities any information contained in the Preferred Security
certificate(s); and (b) acknowledges that neither DTC's Participants nor any
person having an interest in the Preferred Securities shall be deemed to have
notice of the provisions of the Preferred Security certificate(s) by virtue of
submission of such certificate(s) to DTC.
2. The Amended and Restated Trust Agreement of the Issuer provides
for the voting by holders of the Preferred Securities under certain limited
circumstances (without provision for revocation of votes). The Issuer shall
establish a record date for such purposes and shall, to the extent possible,
give DTC notice of such record date not less than 15 calendar days in advance of
such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send to the Reorganization Department of DTC
a notice of such event at least 5 business days prior to the effective date of
such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such
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<PAGE>
notice is in DTC's possession no later than the close of business on the
business day before the Publication Date. The Issuer or the Transfer Agent and
Registrar will forward such notice either in a separate secure transmission for
each CUSIP number or in a secure transmission of multiple CUSIP numbers (if
applicable) that includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 calendar days nor more than 60
calendar days prior to the payment of any such distribution or any such offering
or issuance of rights with respect to the Preferred Securities. After
establishing the amount of payment to be made on the Preferred Securities, the
Issuer or the Transfer Agent and Registrar will notify DTC's Dividend Department
of such payment 5 business days prior to payment date. Notices to DTC's
Dividend Department by telecopy shall be sent to (212) 709-1723. Such notices
by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at (212) 709-
1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Transfer Agent and Registrar
to DTC by a secure means and in a timely manner as described in paragraph 4.
Notices to DTC pursuant to this paragraph and notices of other corporate actions
(including mandatory tenders, exchanges and capital changes), shall be sent,
unless notification to another department is expressly provided for herein, by
telecopy to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094
and receipt of such notice shall be confirmed by telephoning (212) 709-6884, or
by mail or any other means to:
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<PAGE>
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "HL&P Capital Trust I 8.125% Trust Preferred Securities, Series A."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in same-day funds, no
later than 2:30 p.m. (Eastern Time) on each payment date (in accordance with
existing arrangements between the Issuer or the Transfer Agent and Registrar and
DTC). Absent any other arrangements between the Issuer or the Transfer Agent
and Registrar and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
The Issuer or the Transfer Agent and Registrar shall provide distribution
payment information to a standard announcement service subscribed to by DTC. In
the unlikely event that no such service exists, the Issuer agrees that it or the
Transfer Agent and Registrar shall provide this information directly to DTC in
advance of the distribution record date as soon as the information is available.
This information should be conveyed directly to DTC electronically. If
electronic transmission is not available, absent any other arrangements between
the Transfer Agent and Registrar and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686, and
receipt of such notices shall be confirmed by telephoning (212) 709-1270.
Notices to DTC pursuant to the above by mail or by any other means shall be sent
to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
9. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between the Transfer Agent and
Registrar and DTC, such payments shall be wired as follows:
B-4
<PAGE>
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to the Transfer Agent and Registrar.
10. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings, or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between the Transfer Agent and Registrar
and DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
11. DTC may by prior written notice direct the Issuer and the
Transfer Agent and Registrar to use any other telecopy number or address of DTC
as the number or address to which notices or payments may be sent.
12. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
13. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving reasonable written
notice to the Issuer and the Transfer Agent and Registrar (at which time DTC
will confirm with the Issuer or the Transfer Agent and Registrar the aggregate
number of Preferred Securities deposited with it) and discharging its
responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar, and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
B-5
<PAGE>
14. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
15. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of HL&P Capital Trust I.
Very truly yours,
HL&P CAPITAL TRUST I
(as Issuer)
By: ___________________________
Name:
Administrative Trustee
THE BANK OF NEW YORK
(as Transfer Agent and Registrar)
By: ___________________________
Name:
Title:
B-6
<PAGE>
Received and accepted:
THE DEPOSITORY TRUST COMPANY
By: ________________________
Authorized Officer
B-7
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO HOUSTON LIGHTING
& POWER COMPANY OR AN AFFILIATE OF HOUSTON LIGHTING &
POWER COMPANY IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.10 OF THE TRUST AGREEMENT AND ONLY IN CONNECTION
WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE
EXPENSE AGREEMENT REFERRED TO THEREIN
Certificate Number Number of Common Securities
C-1 ___________
Certificate Evidencing Common Securities
of
HL&P Capital Trust I
8.125% Common Securities
(liquidation amount $25 per Common Security)
HL&P Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Houston
Lighting & Power Company (the "Holder") is the registered owner of
____________________________________________________________ (_______) common
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the 8.125% Common Securities (liquidation
amount $25 per Common Security) (the "Common Securities"). In accordance with
Section 5.10 of the Trust Agreement (as defined below), the Common Securities
are not transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Trust Agreement
of the Trust dated as of February 4, 1997, as the same may be amended from time
to time (the "Trust Agreement"), including the designation of the terms of the
Common Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
C-1
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of February, 1997.
HL&P CAPITAL TRUST I
By: _________________________
Name:
Administrative Trustee
C-2
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT, dated as of February 4, 1997, between Houston Lighting &
Power Company, a Texas corporation (the "Corporation"), and HL&P Capital Trust
I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from the Corporation and to issue and
sell its 8.125% Trust Preferred Securities, Series A (the "Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust, dated
as of February 4, 1997, as the same may be amended from time to time (the "Trust
Agreement"); and
WHEREAS, the Corporation will directly or indirectly own all of the
Common Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Corporation, as the holder of the
Common Securities, hereby agrees shall benefit it and which purchase the
Corporation, as the holder of the Common Securities, acknowledges will be made
in reliance upon the execution and delivery of this Agreement, the Corporation,
as the holder of the Common Securities, and the Trust hereby agree as follows:
ARTICLE I.
SECTION 1.1. Agreement and Guarantee by the Corporation.
Subject to the terms and conditions hereof, the Corporation agrees to
pay to the Trust for payment to the Beneficiaries (as hereinafter defined)
amounts equal to the Obligations (as hereinafter defined). In addition, subject
to the terms and conditions hereof, the Corporation, as the holder of the Common
Securities, hereby irrevocably and unconditionally guarantees to each person or
entity to whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all Obligations
to such Beneficiaries. As used herein, "Obligations" means any costs, expenses
or liabilities of the Trust, other than obligations of the Trust to pay to
holders of any Preferred Securities or other similar interests in the Trust the
amounts due such holders pursuant to the terms of the Preferred Securities or
such other similar interests, as the case may be in respect of principal,
interest (including Additional Interest) or Additional Amounts, on the Preferred
Securities. This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
D-1
<PAGE>
SECTION 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement, dated as of the date hereof by the Corporation and The Bank
of New York, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
SECTION 1.3. Waiver of Notice.
The Corporation hereby waives notice of acceptance of this Agreement
and of any Obligation to which it applies or may apply, and the Corporation
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of the Corporation
under this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of the assets of
the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
D-2
<PAGE>
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against the
Corporation and the Corporation waives any right or remedy to require that any
action be brought against the Trust or any other person or entity before
proceeding against the Corporation.
SECTION 1.6. Subrogation.
The Corporation shall be subrogated to all (if any) rights of the
Trust in respect of any amounts paid to the Beneficiaries by the Corporation
under this Agreement; provided, however, that the Corporation shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Agreement.
ARTICLE II.
SECTION 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of the
Corporation and shall inure to the benefit of the Beneficiaries.
SECTION 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities
of any series are outstanding, this Agreement shall not be modified or amended
in any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and, if so given, shall be deemed given
when mailed or upon receipt of an answer back, if sent by telex):
HL&P Capital Trust I
200 West 9th Street Plaza
Box 2105
Wilmington, Delaware 19899
Facsimile No.: (302) 658-0468
Attention: Norman J. Shuman
D-3
<PAGE>
with a copy to:
Houston Industries Incorporated
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
SECTION 2.4. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THERETO.
SECTION 2.5. Limited Liability.
The holders of the Preferred Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the Trust
arising out of this Agreement, and the parties hereto hereby agree that the
holders of the Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
D-4
<PAGE>
THIS AGREEMENT is executed as of the day and year first above
written.
HOUSTON LIGHTING & POWER COMPANY
By: _____________________________
Name:
Title:
HL&P CAPITAL TRUST I
By: ____________________________
Name:
Administrative Trustee
D-5
<PAGE>
EXHIBIT E
IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT - This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
HL&P Capital Trust I or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
Certificate Number Number of Preferred Securities:
P- ________
Aggregate Liquidation Amount:
$__________
CUSIP No.: 404202AA1
Certificate Evidencing Preferred Securities
of
HL&P Capital Trust I
8.125% Trust Preferred Securities, Series A
(liquidation amount $25 per Security)
HL&P Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_______________ (the "Holder") is the registered owner of __________ (________)
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the HL&P Capital Trust I 8.125% Trust
Preferred Securities, Series A (liquidation amount $25 per Preferred Security)
(the "Preferred
E-1
<PAGE>
Securities") and having an aggregate liquidation amount of ______________
Dollars ($__________). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust, dated as of February 4, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of Preferred Securities as set forth therein. The Holder is entitled
to the benefits of the Guarantee Agreement entered into by Houston Lighting &
Power Company, a Texas corporation, and The Bank of New York, as guarantee
trustee, dated as of February 4, 1997 (the "Guarantee"), to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee
to the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ____ day of _______________, 19___.
HL&P CAPITAL TRUST I
By: ___________________________
Name:
Administrative Trustee
This is one of the Preferred Securities referred to in the within mentioned
Trust Agreement.
THE BANK OF NEW YORK,
as Property Trustee
By: __________________________
Dated: ________________ Authorized Signatory
E-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to: _______________________________________________________
______________________________________________________________________________
(Insert assignee's social security or tax identification number)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _____________________________________________________
______________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ___________________________
Signature: ______________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
SIGNATURE(S) GUARANTEED:
____________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
E-3
<PAGE>
EXHIBIT 4.3-B
AMENDED AND RESTATED
TRUST AGREEMENT
among
HOUSTON LIGHTING & POWER COMPANY, as Depositor,
THE BANK OF NEW YORK,
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of February 4, 1997
HL&P CAPITAL TRUST II
<PAGE>
TABLE OF CONTENTS
=================
ARTICLE I Defined Terms......................................... 1
SECTION 1.1 Definitions........................................ 1
ARTICLE II Establishment of the Trust............................ 10
SECTION 2.1 Name............................................... 10
SECTION 2.2 Office of the Delaware Trustee;
Principal Place of Business;
Agents for Service of Process...................... 10
SECTION 2.3 Initial Contribution of Trust Property;
Organizational Expenses............................ 10
SECTION 2.4 Issuance of the Preferred Securities............... 11
SECTION 2.5 Issuance of the Common Securities;
Subscription and Purchase of Debentures............ 11
SECTION 2.6 Declaration of Trust............................... 11
SECTION 2.7 Authorization to Enter into Certain Transactions... 12
SECTION 2.8 Assets of Trust.................................... 17
SECTION 2.9 Title to Trust Property............................ 17
ARTICLE III Payment Account....................................... 18
SECTION 3.1 Payment Account.................................... 18
ARTICLE IV Distributions; Redemption............................. 18
SECTION 4.1 Distributions...................................... 18
SECTION 4.2 Redemption......................................... 19
SECTION 4.3 Subordination of Common Securities................. 21
SECTION 4.4 Payment Procedures................................. 22
SECTION 4.5 Tax Returns and Reports............................ 22
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Trust........ 23
SECTION 4.7 Payments under Indenture or Pursuant
to Direct Actions.................................. 23
ARTICLE V Trust Securities Certificates......................... 23
SECTION 5.1 Initial Ownership.................................. 23
SECTION 5.2 The Trust Securities Certificates.................. 23
SECTION 5.3 Execution and Delivery of Trust
Securities Certificates............................ 24
SECTION 5.4 Registration of Transfer and Exchange of
Preferred Securities Certificates.................. 24
SECTION 5.5 Mutilated, Destroyed, Lost or
Stolen Trust Securities Certificates............... 25
SECTION 5.6 Persons Deemed Securityholders..................... 25
SECTION 5.7 Access to List of Securityholders'
Names and Addresses................................ 25
SECTION 5.8 Maintenance of Office or Agency.................... 26
SECTION 5.9 Appointment of Paying Agent........................ 26
SECTION 5.10 Ownership of Common Securities by Depositor........ 27
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<PAGE>
SECTION 5.11 Book-Entry Preferred Securities Certificates;
Common Securities Certificate...................... 27
SECTION 5.12 Notices to Clearing Agency......................... 28
SECTION 5.13 Definitive Preferred Securities Certificates....... 28
SECTION 5.14 Rights of Securityholders.......................... 29
SECTION 5.15 CUSIP Numbers...................................... 31
ARTICLE VI Acts of Securityholders; Meetings; Voting............. 32
SECTION 6.1 Limitations on Voting Rights....................... 32
SECTION 6.2 Notice of Meetings................................. 33
SECTION 6.3 Meetings of Preferred Securityholders.............. 33
SECTION 6.4 Voting Rights...................................... 33
SECTION 6.5 Proxies, Etc....................................... 33
SECTION 6.6 Securityholder Action by Written Consent........... 34
SECTION 6.7 Record Date for Voting and Other Purposes.......... 34
SECTION 6.8 Acts of Securityholders............................ 34
SECTION 6.9 Inspection of Records.............................. 35
ARTICLE VII Representations and Warranties........................ 36
SECTION 7.1 Representations and Warranties of the Property
Trustee and the Delaware Trustee................... 36
SECTION 7.2 Representations and Warranties of Depositor........ 37
ARTICLE VIII The Trustees.......................................... 37
SECTION 8.1 Certain Duties and Responsibilities................ 37
SECTION 8.2 Certain Notices.................................... 40
SECTION 8.3 Certain Rights of Property Trustee................. 40
SECTION 8.4 Not Responsible for Recitals or Use of Proceeds.... 43
SECTION 8.5 May Hold Securities................................ 43
SECTION 8.6 Compensation; Indemnity; Fees...................... 43
SECTION 8.7 Corporate Property Trustee Required;
Eligibility of Trustees............................ 45
SECTION 8.8 Conflicting Interests.............................. 45
SECTION 8.9 Co-Trustees and Separate Trustee................... 45
SECTION 8.10 Resignation and Removal; Appointment of Successor.. 47
SECTION 8.11 Acceptance of Appointment by Successor............. 48
SECTION 8.12 Merger, Conversion, Consolidation or
Succession to Business............................. 49
SECTION 8.13 Preferential Collection of Claims
Against Depositor or Trust......................... 49
SECTION 8.14 Trustee May File Proofs of Claim................... 49
SECTION 8.15 Reports by Property Trustee........................ 50
SECTION 8.16 Reports to the Property Trustee.................... 50
SECTION 8.17 Evidence of Compliance with Conditions Precedent... 51
SECTION 8.18 Number of Trustees................................. 51
SECTION 8.19 Delegation of Power................................ 51
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<PAGE>
ARTICLE IX Termination, Liquidation and Merger................... 52
SECTION 9.1 Termination Upon Expiration Date .................. 52
SECTION 9.2 Early Termination.................................. 52
SECTION 9.3 Termination........................................ 52
SECTION 9.4 Liquidation........................................ 53
SECTION 9.5 Mergers, Consolidations, Amalgamations
or Replacements of the Trust....................... 54
ARTICLE X Miscellaneous Provisions.............................. 55
SECTION 10.1 Limitation of Rights of Securityholders............ 55
SECTION 10.2 Liability of Holder of Common Securities........... 55
SECTION 10.3 Amendment.......................................... 56
SECTION 10.4 Separability....................................... 57
SECTION 10.5 Governing Law...................................... 57
SECTION 10.6 No Recourse........................................ 57
SECTION 10.7 Payments Due on Non-Business Day................... 58
SECTION 10.8 Successors......................................... 58
SECTION 10.9 Headings........................................... 58
SECTION 10.10 Reports, Notices and Demands....................... 58
SECTION 10.11 Agreement Not to Petition.......................... 59
SECTION 10.12 Trust Indenture Act; Conflict
with Trust Indenture Act........................... 59
SECTION 10.13 Acceptance of Terms of Trust Agreement,
Guarantee and Indenture............................ 60
EXHIBIT A Certificate of Trust
EXHIBIT B Certificate Depository Agreement
EXHIBIT C Common Securities Certificate
EXHIBIT D Expense Agreement
EXHIBIT E Preferred Securities Certificate
-iii-
<PAGE>
HL&P CAPITAL TRUST II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
(S) 310 (a)(1) ........................................ 8.7
(a)(2) ........................................ 8.7
(a)(3) ........................................ 8.9
(a)(4) ........................................ 2.7(a)(ii)
(b) ........................................... 8.8
(S) 311 (a) ........................................... 8.13
(b) ........................................... 8.13
(S) 312 (a) ........................................... 5.7
(b) ........................................... 5.7
(c) ........................................... 5.7
(S) 313 (a) ........................................... 8.15(a)
(a)(8) ........................................ 8.15(b)
(b) ........................................... 8.15(b)
(c) ........................................... 10.10
(d) ........................................... 8.15(a)
(S) 314 (a) ........................................... 8.16
(b) ........................................... Not Applicable
(c)(1) ........................................ 8.17
(c)(2) ........................................ 8.17
(c)(3) ........................................ Not Applicable
(d) ........................................... Not Applicable
(e) ........................................... 1.1, 8.17
(S) 315 (a) ........................................... 8.1(a), 8.3(a)
(b) ........................................... 8.2, 10.10
(c) ........................................... 8.1(d)
(d) ........................................... 8.1, 8.3
(e) ........................................... Not Applicable
(S) 316 (a) ........................................... Not Applicable
(a)(1)(A) ..................................... Not Applicable
(a)(1)(B) ..................................... Not Applicable
(a)(2) ........................................ Not Applicable
(b) ........................................... 5.14
(c) ........................................... 6.7
(S) 317 (a)(1) ........................................ Not Applicable
(a)(2) ........................................ Not Applicable
(b) ........................................... 5.9
(S) 318 (a) ........................................... 10.12
___________________
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
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<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of February 4, 1997, among
(a) Houston Lighting & Power Company, a Texas corporation (including any
successors or assigns, the "Depositor"), (b) The Bank of New York, a New York
banking corporation, as property trustee (in each such capacity, the "Property
Trustee" and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank"), (c) The Bank of New York (Delaware), a Delaware
banking corporation, as Delaware trustee (the "Delaware Trustee"), (d) Norman J.
Shuman, an individual, Linda Geiger, an individual, and Philip W. Parker, an
individual, each of whose address is 200 West 9th Street Plaza, Box 2105,
Wilmington, Delaware 19899 (each an "Administrative Trustee" and collectively
the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and
the Administrative Trustees referred to collectively as the "Trustees") and (e)
the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and created a business trust pursuant to the Delaware Business Trust
Act by entering into that certain Trust Agreement, dated as of January 10, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on January 10, 1997, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (a) the issuance of the Common Securities by the Trust to
the Depositor, (b) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (c) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(d) the appointment of the Property Trustee and the Administrative Trustees;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
Defined Terms
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
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(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on Debentures having a principal
amount equal to such Liquidation Amount for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each of the Persons identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in such
Person's capacity as Administrative Trustee of the Trust formed and continued
hereunder and not in such Person's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
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(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.11.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the
Property Trustee and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means the Time of Delivery, as defined in the Underwriting
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means, (a) when used with respect to the Property
Trustee, the principal corporate trust office of the Property Trustee located at
101 Barclay Street, Floor 21 West, New York, New York 10286 and, (b) when used
with respect to the Debenture Trustee, the principal corporate trust office of
the Debenture Trustee located in New York, New York.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's 8.257%
Junior Subordinated Deferrable Interest Debentures, Series B, or any debentures
or other indebtedness of the Depositor issued in exchange for such 8.257% Junior
Subordinated Deferrable Interest Debentures, Series B, in either case as issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificates as provided in Section 5.11(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ((S)) 3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in
the preamble to this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor trustee
appointed as herein provided.
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"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Direct Action" has the meaning specified in Section 5.14(c).
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with in clause (b) or (c) above) and continuation of such default or breach for
a period of 90 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees and to the Depositor by the Holders of at
least 25% in aggregate Liquidation Amount of the Outstanding Preferred
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(e) the occurrence of a Bankruptcy Event with respect to the Trust.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement, dated as of February 4, 1997,
between the Depositor, as the holder of all the Common Securities, and The Bank
of New York, a New York
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banking corporation, as guarantee trustee, for the benefit of the Holders of the
Trust Securities, as amended from time to time.
"Holder" has the meaning specified in the definition of the term
"Securityholder."
"Indenture" means the Junior Subordinated Indenture, dated as of
February 1, 1997, between the Depositor and the Debenture Trustee, as trustee,
as amended or supplemented from time to time.
"Legal Action" has the meaning specified in Section 2.7(a)(i)(D).
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture,
the proceeds of which will be used to pay the Redemption Price of such Trust
Securities and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a dissolution and winding up of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a dissolution and winding up
of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, the President or a Vice President, and by the
Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary, of the Depositor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 8.17 shall be the principal executive, financial or
accounting officer of the Depositor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor, which may be an employee
of the Depositor but not an employee of the Trust or the Property Trustee, and
who shall be reasonably acceptable to the Property Trustee. Any Opinion of
Counsel pertaining to federal income tax matters may rely on published rulings
of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in the recitals
hereto.
"Outstanding," when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Securities Registrar or
delivered to the Securities Registrar for cancellation;
(b) Trust Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Property Trustee or any Paying
Agent for the Holders of such Trust Securities; provided that, if such Trust
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of
which other Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that a Responsible Officer of such Trustee
actually knows to be so owned shall be so disregarded and (b) the foregoing
shall not apply at any time when all of the outstanding Preferred Securities are
owned by the Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee
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establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9, and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its Global Trust
Services Office for the benefit of the Securityholders in which all amounts paid
in respect of the Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $1,000 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached as Exhibit E.
"Property Trustee" means the Person identified as the "Property Trustee" in
the preamble to this Trust Agreement solely in its capacity as Property Trustee
of the Trust heretofore formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the stated maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions (including Additional Amounts, if applicable) to the Redemption
Date, plus the related amount of the premium, if any, paid by the
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Depositor upon the concurrent redemption of a Like Amount of Debentures,
allocated on a pro rata basis (based on Liquidation Amounts) among the Trust
Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" means, with respect to a Trustee, any Vice President,
any Assistant Vice President, any Assistant Secretary, any Assistant Treasurer
or any other officer of the Corporate Trust Office of such Trustee, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Trust Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act; provided, however, that in determining whether the Holders
of the requisite amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, then for the purpose of any such
determination, so long as Definitive Preferred Securities Certificates have not
been issued, the term "Securityholders" or "Holders" as used herein shall refer
to the Owners.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including (a) all exhibits hereto and (b) for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the Property
Trustee under the Expense Agreement, (c) any cash on deposit in, or owing to,
the Payment Account and (d) all proceeds and rights in respect of the foregoing,
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the terms of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
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"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means the Persons identified as "Trustees" in the preamble to
this Trust Agreement solely in their capacities as Trustees of the Trust formed
and continued hereunder and not in their individual capacities, or their
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Underwriting Agreement" means the Underwriting Agreement, dated
January 30, 1997, among the Trust, the Depositor and the underwriters named
therein.
ARTICLE II.
Establishment of the Trust
SECTION 2.1. Name.
The Trust continued hereby shall be known as "HL&P Capital Trust II," as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may conduct the business of the Trust, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued. The Administrative Trustees may change the name of the Trust from time
to time following written notice to the Holders.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business;
Agents for Service of Process.
The address of the Delaware Trustee in the State of Delaware is The Bank of
New York (Delaware), White Clay Center, Route 273, Newark, Delaware, 19711,
Attention: Corporate Trust Department, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899. All agents
for service of process for the Trust shall be located outside the State of
Texas.
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
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SECTION 2.4. Issuance of the Preferred Securities.
On January 30, 1997, the Depositor, on behalf of the Trust and pursuant to
the Original Trust Agreement, executed and delivered the Underwriting Agreement.
On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver in accordance with
Section 5.11 Preferred Securities Certificates, registered in the name of the
nominee of the initial Clearing Agency, in an aggregate amount of 100,000
Preferred Securities having an aggregate Liquidation Amount of $100,000,000,
against receipt of such aggregate purchase price of such Preferred Securities of
$100,000,000, which amount the Administrative Trustee shall promptly deliver to
the Property Trustee.
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures.
On the Closing Date, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2 and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of 3,093 Common Securities having an aggregate Liquidation
Amount of $3,093,000 against payment by the Depositor of such amount, which
amount such Administrative Trustee shall promptly deliver to the Property
Trustee. Contemporaneously therewith, an Administrative Trustee, on behalf of
the Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Trust and having an aggregate principal amount
equal to $103,093,000, and, in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $103,093,000 (being the sum of the amounts delivered to the
Property Trustee pursuant to (a) the second sentence of Section 2.4 and (b) the
first sentence of this Section 2.5).
SECTION 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act and for taking such actions as
are required to be taken by a Delaware trustee under the Delaware Business Trust
Act.
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SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section, Article VIII and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including, without limitation, the following:
(i) As among the Trustees, the Administrative Trustees, acting singly or
jointly, shall have the exclusive power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) to acquire the Debentures with the proceeds of the sale of the
Trust Securities; provided, however, the Administrative Trustees shall
cause legal title to all of the Debentures to be vested in, and the
Debentures to be held of record in the name of, the Property Trustee for
the benefit of the Trust and the Securityholders;
(B) to give the Depositor and the Property Trustee prompt written
notice of the occurrence of any Special Event (as defined in the Indenture)
and to take any ministerial actions in connection therewith; provided, that
the Administrative Trustees shall consult with the Depositor and the
Property Trustee before taking or refraining to take any ministerial action
in relation to a Special Event;
(C) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of (S)316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Securityholders as to such actions and applicable
record dates;
(D) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 2.7(a)(ii)(E), the Property
Trustee has the power to bring such Legal Action;
(E) to delegate to or otherwise engage employees and agents of the
Trust (who may be designated as officers with titles) and managers,
contractors, advisors and consultants and pay reasonable compensation for
such services;
(F) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
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(G) to give the certificate to the Property Trustee required by
(S) 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Administrative Trustee;
(H) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of this Trust Agreement;
(I) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the
Securityholders or to enable the Trust to effect the purposes for which the
Trust has been created;
(J) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust;
(K) to issue and sell the Trust Securities;
(L) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and the Certificate
Depository Agreement and such other agreements as may be necessary or
desirable in connection with the purposes and function of the Trust;
(M) to assist in the registration of the Preferred Securities under
the Securities Act of 1933, as amended, and under state securities or blue
sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(N) to assist in the listing, if any, of the Preferred Securities upon
such securities exchange or exchanges or automated quotation system or
systems as shall be determined by the Depositor and the registration of the
Preferred Securities under the Securities Exchange Act of 1934, as amended,
and the preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(O) to send notices (other than notices of default) and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(P) to appoint a Paying Agent, authenticating agent and Securities
Registrar in accordance with this Trust Agreement;
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(Q) to register transfers of the Trust Securities in accordance with
this Trust Agreement;
(R) in connection with the winding up of the affairs of and
liquidation of the Trust, to prepare, execute and file the certificate of
cancellation with the Secretary of State of the State of Delaware;
(S) to execute and deliver any closing certificates pursuant to the
Underwriting Agreement and to make application for a taxpayer
identification number for the Trust;
(T) unless otherwise determined by the Depositor, the Property Trustee
or the Administrative Trustees, or as otherwise required by the Delaware
Business Trust Act or the Trust Indenture Act, to execute on behalf of the
Trust (either acting alone or together with any or all of the
Administrative Trustees) any documents that the Administrative Trustees
have the power to execute pursuant to this Trust Agreement; and
(U) to take any action incidental to the foregoing as the Trustees may
from time to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement for the benefit of the Securityholders
(without consideration of the effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the exclusive
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) to engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Trust Securities to
the extent the Debentures are redeemed or mature;
(B) upon notice of distribution issued by the Administrative Trustees
in accordance with the terms of this Trust Agreement, to engage in such
ministerial activities as shall be necessary or appropriate to effect
promptly the distribution pursuant to terms of this Trust Agreement of
Debentures to Securityholders;
(C) subject to the terms hereof, to exercise all of the rights, powers
and privileges of a holder of the Debentures under the Indenture and, if a
Debenture Event of Default occurs and is continuing, shall enforce for the
benefit of, and subject to the rights of, the Securityholders, its rights
as holder of the Debentures under the Indenture;
(D) to take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust
Agreement;
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(E) to take any Legal Action specifically required of the Property
Trustee pursuant to the terms of this Trust Agreement which arises out of
or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Trust Agreement, the Delaware Business Trust Act
or the Trust Indenture Act;
(F) to establish and maintain the Payment Account;
(G) to receive and hold legal title to the Debentures as described
herein;
(H) to collect interest, principal and any other payments made in
respect of the Debentures and the holding of such amounts in the Payment
Account;
(I) to distribute through the Paying Agent amounts owed to the
Securityholders in respect of the Trust Securities;
(J) to exercise all of the rights, powers and privileges of a holder
of the Debentures;
(K) to send notices of default and other information regarding the
Trust Securities and the Debentures to the Securityholders in accordance
with this Trust Agreement;
(L) to distribute the Trust Property in accordance with the terms of
this Trust Agreement;
(M) to the extent provided in this Trust Agreement, to wind up the
affairs of and liquidate the Trust and to execute the certificate of
cancellation with the Secretary of State of the State of Delaware;
(N) after an Event of Default (other than under paragraph (b), (c),
(d) or (e) of the definition of such term if such Event of Default is by or
with respect to the Property Trustee), to take any action incidental to the
foregoing as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust Agreement
and to protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such action on
any particular Securityholder); and
(O) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly
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provided herein or contemplated hereby. In particular, the Trustees shall not
(i) acquire any investments or engage in any activities not authorized by this
Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-
off or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to be classified as an association taxable
as a corporation or as other than a grantor trust for United States federal
income tax purposes, (iv) incur any indebtedness for borrowed money or issue any
other debt, (v) take or consent to any action that would result in the placement
of a Lien on any of the Trust Property, (vi) issue any securities other than the
Trust Securities, (vii) have any power to, or agree to any action by the
Depositor that would, vary the investment (within the meaning of Treasury
Regulation Section 301.7701-4(c)) of the Trust or of the Securityholders or
(viii) on or after the date hereof, enter into any contract or agreement for or
on behalf of the Trust (other than the Certificate Depository Agreement or any
other depositary agreement or any agreement with any securities exchange or
automated quotation system) that does not expressly provide that the Holders of
the Preferred Securities, in their capacities as such, have limited liability
(in accordance with the provisions of the Delaware Business Trust Act) for the
liabilities and obligations of the Trust, which express provision may be in the
following form, "The Holders of the Preferred Securities, in their capacities as
such, shall not be personally liable for any liabilities or obligations of the
Trust arising out of this Agreement, and the parties hereto hereby agree that
the Holders of the Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware." The Administrative Trustees shall defend all claims
and demands of all Persons at any time claiming any Lien on any of the Trust
Property adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders. All actions taken by the Administrative Trustees
shall be taken outside of the State of Texas.
(c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor or the Trust in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all respects
without any further act, vote or approval of any Person notwithstanding any
other provision of this Agreement, the Delaware Business Trust Act or other
applicable law, rule or regulation):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, the Debentures
and the Guarantee, and certain other securities which could have been
issued in lieu of the Preferred Securities, including any amendments
thereto;
(ii) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of
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the Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states;
(iii) if deemed desirable by the Depositor, the preparation for
filing by the Trust and execution on behalf of the Trust of an application
to the New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market or any other automated quotation system for listing
upon notice of issuance of any Preferred Securities and filing with such
exchange or self-regulatory organization such notifications and documents
as may be necessary from time to time to maintain such listing;
(iv) if required, the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;
(v) the negotiation of the terms of, the execution and delivery of,
and the performance of its obligations under, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, or to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of the Depositor and any Administrative
Trustee determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not adversely affect in any material
respect the interests of the Holders of the Preferred Securities.
SECTION 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee in trust for the benefit of the Trust and the
Securityholders in accordance with this Trust Agreement. The right, title and
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interest of the Property Trustee to the Debentures shall vest automatically in
each Person who may thereafter be appointed as Property Trustee in accordance
with the terms hereof. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
ARTICLE III.
Payment Account
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest (including any Additional
Interest, as defined in the Indenture) or premium or Additional Sums on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV.
Distributions; Redemption
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in the
Trust Property, and Distributions (including any Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including any Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from
February 4, 1997, and, except in the event (and to the extent) that the
Depositor exercises its right to defer the payment of interest on the
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Debentures pursuant to the Indenture, shall (assuming that payments of
interest on the Debentures are made when due) be payable semiannually in
arrears on February 1 and August 1 of each year, commencing on August 1,
1997. If any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment
of such Distribution shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date
(each date on which Distributions are payable in accordance with this
Section 4.1(a), a "Distribution Date").
(ii) Assuming payments of interest on the Debentures are made when
due (and before giving effect to Additional Amounts, if applicable),
Distributions on the Trust Securities shall be payable at a rate of 8.257%
per annum of the Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full Distribution period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial period shall be computed on the basis of a
360-day year of twelve 30-day months and the number of days elapsed in a
partial month. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities at the close of business on the relevant
record date, which shall be at the close of business on the Business Day
immediately preceding such Distribution Date; provided, however, that in the
event that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the close of business on the fifteenth day of the
month immediately preceding the relevant Distribution Date (whether or not such
record date is a Business Day).
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Trust Securities to be redeemed, at
such Holder's address appearing in the Security Register. All notices of
redemption shall state:
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(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date; and
(vi) if the Preferred Securities are no longer in book-entry-only
form, the place and address where the Holders shall surrender their
Preferred Securities Certificates.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price, and an Administrative Trustee or the Property
Trustee will give such Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the Holders thereof. If the Preferred Securities are
no longer in book-entry-only form, the Property Trustee, subject to
Section 4.2(c), will irrevocably deposit with the Paying Agent funds sufficient
to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but without interest
thereon, and such Trust Securities will cease to be outstanding. In the event
that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business
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Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case, with the
same force and effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities will
continue to accumulate, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Trust Securities to the date such
Redemption Price is actually paid, in which case the actual payment date will be
the date fixed for redemption for purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities at the close of business on the relevant record date, which
shall be at the close of business on the Business Day immediately preceding the
relevant Redemption Date; provided, however, that in the event that the
Preferred Securities do not remain in book-entry-only form, the relevant record
date shall be the close of business on the date fifteen days prior to the
relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption, by lot or by such other method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000 or an integral multiple of $1,000 in excess
thereof) of the Liquidation Amount of Preferred Securities of a denomination
larger than $1,000. The Property Trustee shall promptly notify the Security
Registrar in writing of the Preferred Securities selected for redemption and, in
the case of any Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of Preferred Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Preferred Securities that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities pursuant to Section 4.2(f); provided,
however, that if on any Distribution Date or Redemption Date any Event of
Default resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption,
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liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions (including
Additional Amounts, if applicable) on all Outstanding Preferred Securities for
all Distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price, the full amount of such Redemption Price on all
Outstanding Preferred Securities then called for redemption, shall have been
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated.
Until any such Event of Default under this Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities, and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee to
act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable Distribution Dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed upon between
the Property Trustee and the Common Securityholder.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form and the
information required to be provided on such form. The Administrative Trustees
shall provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing. The Trustees
shall comply with United States federal withholding and backup withholding tax
laws and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
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SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority; provided, however, that under no circumstances
shall the Property Trustee have any liability for such sums, including non-
receipt of any Additional Sums under the Debentures.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to Section 5.8 of
the Indenture or Section 5.14 of this Trust Agreement.
ARTICLE V.
Trust Securities Certificates
SECTION 5.1. Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum
denominations of $1,000 Liquidation Amount and integral multiples of $1,000 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $1,000 Liquidation Amount and integral multiples thereof. The
Preferred Securities Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of at least one Administrative Trustee. The
Common Securities Certificates shall be executed on behalf of the Trust by
manual signature of at least one Administrative Trustee. A Preferred Securities
Certificate bearing a facsimile signature of an Administrative Trustee shall be
authenticated by the Property Trustee. Trust Securities Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
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SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board and
chief executive officer, its president, any executive vice president, any senior
vice president or any vice president, treasurer or assistant treasurer or
controller without further corporate action by the Depositor, in authorized
denominations. Upon a written order of the Trust by at least one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities
Certificates for original issuance.
SECTION 5.4. Registration of Transfer and Exchange of Preferred
Securities Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which the
registrar designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, or if such
execution is by facsimile signature, the Administrative Trustee or any one of
them shall deliver a written order to the Property Trustee to authenticate and
deliver, in which case the Property Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution (manual or facsimile) by such
Administrative Trustee or Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. The
Administrative Trustees shall not be required to issue, transfer or exchange any
Preferred Securities that have been called for redemption. At the option of a
Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer
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or exchange shall be canceled and subsequently disposed of by an Administrative
Trustee in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust, shall
execute or, if such Trust Securities Certificate is a Preferred Securities
Certificate and such execution is by facsimile signature, the Administrative
Trustee or any one of them shall deliver a written order for the Property
Trustee to authenticate and deliver, in which case the Property Trustee shall
authenticate, and make available for delivery, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new
Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.6. Persons Deemed Securityholders.
The Trustees and the Securities Registrar shall treat the Person in whose
name any Trust Securities Certificate shall be registered in the Securities
Register as the owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.7. Access to List of Securityholders' Names and Addresses.
The Administrative Trustees or the Depositor shall furnish or cause to be
furnished (a) to the Property Trustee, semiannually, not more than 15 days after
June 15 and December 15 in each year, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the
Securityholders as of such June 15 and December 15, and (b) to the Property
Trustee, promptly
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after receipt by any Administrative Trustee or the Depositor of a request
therefor from the Property Trustee in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, in each case to the extent
such information is in the possession or control of the Administrative Trustees
or the Depositor and is not identical to a previously supplied list or has not
otherwise been received by the Property Trustee in its capacity as Securities
Registrar. The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Trustee, shall be as
provided in the Trust Indenture Act. Each Holder, by receiving and holding a
Trust Securities Certificate, and each Owner shall be deemed to have agreed not
to hold the Depositor, the Property Trustee, the Delaware Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 5.8. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attn.: Corporate Trust Trustee
Administration, as its principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor, the
Bank and the Securityholders of any change in the location of the Securities
Register or any such office or agency.
SECTION 5.9. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent if such Trustees
determine in their sole discretion that the Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect. The
Paying Agent shall initially be the Bank, and any co-paying agent chosen by the
Bank, and acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Paying Agent
or a successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled
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thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall
apply to the Bank also in its role as Paying Agent, for so long as the Bank
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Trust Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. The Holder of the Common Securities
may not transfer the Common Securities except (a) in connection with a
consolidation or merger of the Depositor into any other Person, or any
conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (b) to the Depositor or an Affiliate thereof in compliance with
applicable law (including the Securities Act of 1933, as amended, and applicable
state securities and blue sky laws), and in either case only upon an effective
assignment and delegation by the Holder of the Common Securities to its
transferee of all of its rights and obligations under the Expense Agreement. To
the fullest extent permitted by law, any attempted transfer of the Common
Securities other than as set forth in the immediately preceding sentence shall
be void. The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating substantially
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF
THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.10 OF THE TRUST
AGREEMENT AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT
OF THE EXPENSE AGREEMENT REFERRED TO THEREIN."
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
Definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 5.13. Unless and
until Definitive Preferred Securities Certificates have been issued to Owners
pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
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(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates and
the giving of instructions or directions to Owners of Preferred Securities
evidenced by Book-Entry Preferred Securities Certificates) as the sole
Holder of Preferred Securities evidenced by Book-Entry Preferred Securities
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 5.13, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the Preferred
Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to
Section 5.13, the Trustees shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustees shall notify
the Clearing Agency and the
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other Trustees and the Clearing Agency shall notify all Owners of Preferred
Securities Certificates of the occurrence of any such event and of the
availability of the Definitive Preferred Securities Certificates to Owners of
such class or classes, as applicable, requesting the same. Upon surrender to
the Administrative Trustees of the typewritten Preferred Securities Certificate
or Certificates representing the Book-Entry Preferred Securities Certificates by
the Clearing Agency, accompanied by registration instructions, the
Administrative Trustees, or any one of them, shall execute or, if such execution
is by facsimile signature, the Administrative Trustee or any one of them shall
deliver a written order for the Property Trustee to authenticate, in which case
the Property Trustee shall authenticate, the Definitive Preferred Securities
Certificates in accordance with the instructions of the Clearing Agency.
Neither the Securities Registrar nor the Trustees shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
fully protected in relying on, such instructions. Upon the issuance of
Definitive Preferred Securities Certificates, the Trustees shall recognize the
Holders of the Definitive Preferred Securities Certificates as Securityholders.
The Definitive Preferred Securities Certificates shall be typewritten, printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Administrative Trustees that meets the requirements of any
stock exchange or automated quotation system on which the Preferred Securities
are then listed or approved for trading, as evidenced by the execution thereof
by the Administrative Trustees or any one of them.
SECTION 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property, giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and, when issued and
delivered to Securityholders against payment of the purchase price therefor,
will be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable as set
forth in the Indenture, the Holders of at least 25% in Liquidation Amount of the
Preferred Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Depositor and the Debenture Trustee;
and upon any such declaration such principal amount of and the accrued interest
on all of the Debentures shall become immediately due and payable, provided that
the payment of principal, premium and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
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At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, if the Property Trustee fails to annul any such declaration and waive
such default, the Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Depositor has paid or deposited with the Debenture Trustee a
sum sufficient to pay:
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Property Trustee, their
agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other than
the nonpayment of the principal of the Debentures which has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice
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prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Preferred Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of any
amounts payable in respect of Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action"). Except as set forth in Section 5.14(b) and this
Section 5.14(c), the Holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Debentures.
(d) Except as otherwise provided in paragraphs (a), (b) and (c) of this
Section 5.14, the Holders of at least a majority in aggregate Liquidation Amount
of the Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
any default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.15. CUSIP Numbers.
The Trust in issuing the Preferred Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Preferred Securities or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Preferred Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Depositor shall promptly notify the Property Trustee in writing of any
change in CUSIP numbers.
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ARTICLE VI.
Acts of Securityholders; Meetings; Voting
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee, on
behalf of the Trust, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or execute any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Preferred Securities, except by a
subsequent vote of the Holders of Preferred Securities. The Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Trustees shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in such matters to
the effect that such action shall not cause the Trust to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution and winding-up of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Preferred Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a majority in Liquidation Amount of the
Outstanding Preferred Securities. Notwithstanding any other provision of this
Trust Agreement, no amendment to this Trust Agreement may be made if, as a
result of such amendment,
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it would cause the Trust to be classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.10 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be
so considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Preferred
Securityholders to vote on any matter upon the written request of the Preferred
Securityholders of record of at least 25% of the Outstanding Preferred
Securities (based upon their Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
Preferred Securityholders to vote on any matters as to which Preferred
Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding more
than a majority of the Preferred Securities (based upon their Liquidation
Amount) held by the Preferred Securities of record present, either in person or
by proxy, at such meeting shall constitute the action of the Preferred
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
SECTION 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $1,000 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5. Proxies, Etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be
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taken. Pursuant to a resolution of the Property Trustee, proxies may be
solicited in the name of the Property Trustee or one or more officers of the
Property Trustee. Only Securityholders of record shall be entitled to vote.
When Trust Securities are held jointly by several Persons, any one of them may
vote at any meeting in person or by proxy in respect of such Trust Securities,
but if more than one of them shall be present at such meeting in person or by
proxy, and such joint owners or their proxies so present disagree as to any vote
to be cast, such vote shall not be received in respect of such Trust Securities.
A proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
SECTION 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled
to notice of and to vote at any meeting or by written consent, or to participate
in any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
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The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents, each of which may do so pursuant to
such appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust or any person or entity.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
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ARTICLE VII.
Representations and Warranties
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf of
and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Securityholders that:
(a) the Property Trustee is a New York banking corporation and is in good
standing under the laws of the State of New York;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation duly organized,
validly existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement
has been duly authorized by all necessary corporate or other action on the part
of the Property Trustee and the Delaware Trustee and does not require any
approval of stockholders of the Property Trustee and the Delaware Trustee and
such execution, delivery and performance will not (i) violate the charter or by-
laws of the Property Trustee or the Delaware Trustee, (ii) violate any provision
of, or constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound or (iii)
violate any law, governmental rule or regulation of the United States or the
State of Delaware, as the case may be, governing the banking or trust powers of
the Property Trustee or the Delaware Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Delaware
Trustee;
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(g) neither the authorization, execution or delivery by the Property
Trustor the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any existing federal
law governing the banking or trust powers of the Property Trustee or the
Delaware Trustee, as the case may be, under the laws of the United States or the
State of Delaware; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement,
and the Securityholders will be, as of each such date, entitled to the benefits
of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII.
The Trustees
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, but subject to Section
8.1(c), no provision of this Trust Agreement shall require any of the Trustees
to expend or risk its or their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder, or in the
exercise of any of its or their rights or
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powers, if it or they shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it. Whether or not therein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section 8.1. Nothing in this Trust Agreement shall be
construed to release an Administrative Trustee from liability for his or her own
negligent action, his or her own negligent failure to act, or his or her own
willful misconduct. To the extent that, at law or in equity, an Administrative
Trustee has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to the Securityholders, such Administrative Trustee shall not be
liable to the Trust or to any Securityholder for such Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and liabilities of
the Administrative Trustees otherwise existing at law or in equity, are agreed
by the Depositor and the Securityholders to replace such other duties and
liabilities of the Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. Each Securityholder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees, their officers,
directors, shareholders and agents are not personally liable to it for any
amount distributable in respect of any Trust Security or for any other liability
in respect of any Trust Security. This Section 8.1(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust Agreement
or, in the case of the Property Trustee, in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the
Property Trustee shall enforce this Trust Agreement for the benefit of the
Holders.
(d) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.11), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.14), the Property Trustee shall exercise such of the rights and
powers vested in it by this Trust Agreement, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement
(including pursuant to Section 10.11), and the Property Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Trust Agreement (including pursuant to
Section 10.11); and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming
to the requirements of this Trust Agreement; but in the case of any such
certificates or opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Trust
Agreement;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Payment
Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust Indenture Act;
(v) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree in writing with
the Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the Payment
Account maintained by the Property Trustee pursuant to Section 3.1 and
except to the extent otherwise required by law;
(vi) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust
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Agreement, nor shall the Property Trustee be liable for the default or
misconduct of the Administrative Trustees or the Depositor; and
(vii) subject to Section 8.1(c), no provision of this Trust Agreement
shall require the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Property Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Trust Agreement or adequate indemnity against such risk
or liability is not reasonably assured to it.
(f) The Administrative Trustees shall not be responsible for monitoring the
compliance by the other Trustees or the Depositor with their respective duties
under this Trust Agreement, nor shall any Administrative Trustee be liable for
the default or misconduct of any other Administrative Trustee, the other
Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within ten Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in
Section 10.10, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.10, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of
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this Trust Agreement the Property Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (iii) the Property
Trustee is unsure of the application of any provision of this Trust Agreement,
then, except as to any matter as to which the Preferred Securityholders are
entitled to vote under the terms of this Trust Agreement, the Property Trustee
shall deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee shall
take such action, or refrain from taking such action, as the Property Trustee
shall be instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not receive such
instructions of the Depositor within ten Business Days after it has delivered
such notice, or such reasonably shorter period of time set forth in such notice
(which to the extent practicable shall not be less than two Business Days), it
may, but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Trust Agreement as it shall deem advisable and in the
best interests of the Securityholders, in which event the Property Trustee shall
have no liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its selection
(which counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders, pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
provided that nothing contained in this
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Section 8.3(g) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Trust Agreement;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys; provided that the Property Trustee shall be responsible for
its own negligence or misconduct with respect to the selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received and (iii) shall be protected in acting in
accordance with such instructions;
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement;
(l) the Property Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Trust Agreement; and
(m) the Property Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Preferred Securities and this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on any Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it, in any jurisdiction in
which it shall be illegal, or in which such Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to any Trustee shall be construed to be a duty.
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SECTION 8.4. Not Responsible for Recitals or Use of Proceeds.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, and, except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6. Compensation; Indemnity; Fees.
(a) The Depositor agrees:
(i) to pay to the Property Trustee and the Delaware Trustee from
time to time such compensation for all services rendered by them hereunder
as may be agreed by the Depositor and such Trustees from time to time
(which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to reimburse the
Property Trustee and the Delaware Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by such Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of their agents
and counsel), except any such expense, disbursement or advance as may be
attributable to their negligence, bad faith or willful misconduct; and
(iii) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (A) the Property Trustee and the Delaware Trustee, (B)
any Affiliate of any such Trustee, (C) any officer, director, shareholder,
employee, representative or agent of any such Trustee and (D) any employee
or agent of the Trust or its Affiliates (referred to herein as an
"Indemnified Person"), from and against any and all loss, damage,
liability, tax, penalty, expense or claim of any kind or nature whatsoever
incurred by such Indemnified Person by reason of the creation, operation or
termination of the Trust or any act or omission performed or omitted by
such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Trust Agreement,
except that no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence, bad faith or misconduct with respect to such acts or
omissions.
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(b) The Trust shall:
(i) pay to the Administrative Trustees from time to time
compensation for all services rendered by them hereunder as may be agreed
by the Depositor and the Administrative Trustees from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, reimburse the
Administrative Trustees upon request for all expenses, disbursements and
advances incurred or made by such Trustees (including compensation and the
expenses and disbursements of their agents and counsel); and
(iii) to the fullest extent permitted by applicable law, indemnify
and hold harmless (A) each Administrative Trustee, (B) any Affiliate of
each such Trustee and (C) any officer, director, shareholder, employee,
representative or agent of each such Trustee to the same extent as the
Depositor has agreed to indemnify an Indemnified Person pursuant to
Section 8.6(a)(iii) above.
(c) The provisions of this Section 8.6 shall survive the termination
of this Trust Agreement or the earlier termination or removal of any Trustee.
No Trustee may claim any Lien on any Trust Property as a result of any
amount due pursuant to this Section 8.6.
When any Trustee incurs expenses or renders services after an Event of
Default specified in clause (e) of the definition of Event of Default occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under the Bankruptcy Reform Act of 1978 or any
successor statute.
The Depositor and any Trustee may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor nor any Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
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SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and that has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law and that shall
act through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
(b) The Guarantee and the Indenture shall be deemed to be specifically
described in this Trust Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Depositor and the Administrative Trustees, by agreed
action of the majority of such Trustees, shall have power to appoint, and upon
the written request of the Administrative Trustees, the Depositor shall for such
purpose join with the Administrative Trustees in the execution, delivery, and
performance of all
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instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to the extent
required by law to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Depositor does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section shall either be (i) a natural person who is at least 21
years of age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one or
more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed by one or more of the
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such co-
trustee or separate trustee.
(b) The rights, powers, duties and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such co-
trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing executed
by it, with the written concurrence of the Depositor, may accept the resignation
of or remove any co-trustee or separate trustee appointed under this Section,
and, in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Depositor.
Upon the written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
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resignation or removal. A successor to any co-trustee or separate trustee so
resigning or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a co-
trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders
and by appointing a successor Relevant Trustee. The Relevant Trustee shall
appoint a successor by requesting from at least three Persons meeting the
eligibility requirements its expenses and charges to serve as the Relevant
Trustee on a form provided by the Administrative Trustees, and selecting the
Person who agrees to the lowest expenses and charges. If the instrument of
acceptance by the successor Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 60 days after the giving of such notice
of resignation, the Relevant Trustee may petition, at the expense of the Trust,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If a
Debenture Event of Default shall have occurred and be continuing, the Property
Trustee or the Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and,
in the case of the Property Trustee, on behalf of the Trust). An Administrative
Trustee may be removed by the Common Securityholder at any time. If the
instrument of acceptance by the successor Trustee required by Section 8.11 shall
not have been delivered to the Relevant Trustee within 60 days after such
removal, the Relevant Trustee may petition, at the expense of the Trust, any
court of competent jurisdiction for the appointment of a successor Relevant
Trustee.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the
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Common Securityholder delivered to the retiring Trustee, shall promptly appoint
a successor Trustee or Trustees, and the retiring Trustee shall comply with the
applicable requirements of Section 8.11. If the Property Trustee or the Delaware
Trustee shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when a
Debenture Event of Default shall have occurred and be continuing, the Preferred
Securityholders, by Act of the Securityholders of a majority in Liquidation
Amount of the Preferred Securities then Outstanding delivered to the retiring
Relevant Trustee, shall promptly appoint a successor Relevant Trustee or
Trustees, and such successor Trustee shall comply with the applicable
requirements of Section 8.11. If an Administrative Trustee shall resign, be
removed or become incapable of acting as Administrative Trustee, at a time when
a Debenture Event of Default shall have occurred and be continuing, the Common
Securityholder by Act of the Common Securityholder delivered to the
Administrative Trustee shall promptly appoint a successor Administrative Trustee
or Administrative Trustees and such successor Administrative Trustee or Trustees
shall comply with the applicable requirements of Section 8.11. If no successor
Relevant Trustee shall have been so appointed by the Common Securityholder or
the Preferred Securityholders and accepted appointment in the manner required by
Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders, in the manner provided in Section 10.10, and shall give notice
to the Depositor and to the Administrative Trustees. Each notice shall include
the name of the successor Relevant Trustee and the address of its Corporate
Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Holder of the Common Securities,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of the remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies the
eligibility requirement for the Administrative Trustees or the Delaware Trustee,
as the case may be, set forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee, the
retiring Relevant Trustee and each successor Relevant Trustee with respect to
the Trust Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing
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herein or in such amendment shall constitute such Relevant Trustees co-trustees
and upon the execution and delivery of such amendment the resignation or removal
of the retiring Relevant Trustee shall become effective to the extent provided
therein and each such successor Relevant Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on request of the Trust or any
successor Relevant Trustee, such retiring Relevant Trustee shall duly assign,
transfer and deliver to such successor Relevant Trustee all Trust Property, all
proceeds thereof and money held by such retiring Relevant Trustee hereunder with
respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all of the rights, powers and
trusts of the Relevant Trustee referred to herein.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Trust.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
SECTION 8.14. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Trust or any other obligor upon the Trust Securities
or the property of the Trust or of such other obligor or their creditors, the
Property Trustee (irrespective of whether any Distributions on the Trust
Securities shall then be due and payable and irrespective of whether the
Property Trustee shall have made any demand on the Trust for the payment of any
past due Distributions) shall be entitled and empowered, to the fullest extent
permitted by law, by intervention in such proceeding or otherwise:
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(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Trust Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Property Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Property Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel, and
any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.15. Reports by Property Trustee.
(a) Not later than January 31 of each year, commencing with
January 31, 1998, the Property Trustee shall transmit to all Securityholders
in accordance with Section 10.10, and to the Depositor, such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded, if
any, with the Commission and with the Depositor. The Depositor shall promptly
notify the Property Trustee when the Trust Securities are so listed or traded.
SECTION 8.16. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust
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Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act. Delivery of such reports, information
and documents to the Property Trustee is for informational purposes only and the
Property Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Depositor's compliance with any of its covenants
hereunder (as to which the Property Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 8.17. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.18. Number of Trustees.
(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.18(a), or if the
number of Administrative Trustees is increased pursuant to Section 8.18(a), a
vacancy shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.19. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments
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either in the name of the Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
this Trust Agreement.
ARTICLE IX.
Termination, Liquidation and Merger
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2051 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Holder of the Common Securities;
(b) the written direction to the Property Trustee from the Holder of
the Common Securities at any time to dissolve the Trust and, after satisfaction
or the making of reasonable provision for the payment of liabilities to
creditors of the Trust, to distribute Debentures to Securityholders in exchange
for the Preferred Securities (which direction is optional and wholly within the
discretion of the Holder of the Common Securities);
(c) the redemption of all of the Preferred Securities in connection with
the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
of all amounts required to be distributed hereunder upon the liquidation of the
Trust pursuant to Section 9.4, or upon the redemption of all of the Trust
Securities pursuant to Section 4.2; (b) the payment of any expenses owed by the
Trust; and (c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.
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SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be wound up
by the Property Trustee as expeditiously as the Property Trustee determines to
be possible by distributing, after satisfaction or the making of reasonable
provision for the payment of liabilities to creditors of the Trust as provided
by applicable law, to each Securityholder a Like Amount of Debentures, subject
to Section 9.4(d). Notice of dissolution shall be given by the Property Trustee
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All such notices of
dissolution shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Debentures, or if
Section 9.4(d) applies receive a Liquidation Distribution, as the Property
Trustee (after consultation with the Administrative Trustees) shall deem
appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
dissolution and winding-up of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of Trust Securities Certificates, upon surrender of such certificates to the
Administrative Trustees or their agent for exchange, (iii) the Depositor shall
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other stock exchange, interdealer quotation system or self-
regulatory organization on which the Preferred Securities are then listed or
traded, if any, (iv) any Trust Securities Certificates not so surrendered for
exchange will be deemed to represent a Like Amount of Debentures, accruing
interest at the rate provided for in the Debentures from the last Distribution
Date on which a Distribution was made on such Trust Securities Certificates
until such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of
Trust Securities Certificates with respect to such Debentures) and (v) all
rights of Securityholders holding Trust Securities will cease, except the right
of such Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
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(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, or if an Early Termination Event specified in clause (c) of
Section 9.2 occurs, the Trust Property shall be liquidated, and the Trust shall
be dissolved, wound-up and terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, in connection with the winding-
up of the Trust, Securityholders will be entitled to receive out of the assets
of the Trust available for distribution to Securityholders after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution and winding-up, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, subject
to the next succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution and winding-up pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a Debenture
Event of Default specified in Section 5.1(1) or 5.1(2) of the Indenture has
occurred and is continuing, the Preferred Securities shall have a priority over
the Common Securities as provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements
of the Trust.
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to Section 9.4 or this Section 9.5. At the request of the Holder of Common
Securities, with the consent of the Administrative Trustees and without the
consent of the Holders of the Preferred Securities, the Property Trustee or the
Delaware Trustee, the Trust may merge with or into, consolidate, amalgamate or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided that (a) such successor entity either (i) expressly assumes all
of the obligations of the Trust with respect to the Preferred Securities or (ii)
substitutes for the Preferred Securities other securities having substantially
the same material terms as the Preferred Securities (the "Successor Securities")
so long as the Successor Securities have the same priority as the Preferred
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise; (b) a trustee of such successor entity possessing the
same powers and duties as the Property Trustee is appointed to hold the
Debentures; (c) the Successor Securities are listed or traded, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed or traded, if any; (d) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization; (e) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the material rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any material
respect; (f) such successor
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entity has a purpose substantially identical to that of the Trust; (g) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Property Trustee has received an Opinion of Counsel to the effect
that (i) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the material rights, preferences and
privileges of the Holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (ii) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act; and (h) the Depositor or its permitted
transferee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of Holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as an association
taxable as a corporation or as other than a grantor trust for United States
federal income tax purposes.
ARTICLE X.
Miscellaneous Provisions
SECTION 10.1. Limitation of Rights of Securityholders.
The death, incapacity, liquidation, dissolution, termination or bankruptcy
of any Person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim, to the fullest extent permitted by law, an accounting, take any action
or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
SECTION 10.2. Liability of Holder of Common Securities.
Pursuant to Section 3803 of the Delaware Business Trust Act, the Depositor,
as the Holder of Common Securities, shall be liable for the debts and
obligations of the Trust as set forth in the Expense Agreement, which is made a
part hereof.
SECTION 10.3. Amendment.
(a) This Trust Agreement may be amended from time to time by the Property
Trustee, the Administrative Trustees and the Depositor, without the consent of
any Securityholders, (i) to cure any ambiguity, correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
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this Trust Agreement, which shall not be inconsistent with the other provisions
of this Trust Agreement, (ii) to modify, eliminate or add to any provisions of
this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will not be classified for United States federal income tax purposes as an
association taxable as a corporation or as other than a grantor trust at all
times that any Trust Securities are outstanding or to ensure that the Trust will
not be required to register as an investment company under the 1940 Act, or
(iii) pursuant to Section 8.11 hereof, to evidence the acceptance of the
appointment of a successor Relevant Trustee or to fill a vacancy created by an
increase in the number of Administrative Trustees; provided, however, that in
the case of clause (i) or (ii), such action shall not adversely affect in any
material respect the interests of any Securityholder, and any amendments of this
Trust Agreement shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 10.3(c) hereof, any provision of this
Trust Agreement may be amended by the Administrative Trustees and the Depositor
with (i) the consent of Trust Securityholders representing not less than a
majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust or cause the Trust to be an association taxable as a corporation
for United States federal income tax purposes or the Trust's exemption from
status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.3 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or cause the Trust to be
classified as an association taxable as a corporation or not to be a grantor
trust for United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this Trust
Agreement may not be amended in a manner which imposes any additional obligation
on the Depositor or the Administrative Trustees.
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(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
shall be entitled to receive an Opinion of Counsel and an Officers' Certificate
stating that any amendment to this Trust Agreement is in compliance with this
Trust Agreement.
SECTION 10.4. Separability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES, AND THE LIABILITY OF SECURITYHOLDERS FOR OBLIGATIONS
AND LIABILITIES OF THE TRUST SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. THE PROVISIONS OF SECTIONS 3540 AND 3561 OF TITLE 12 OF THE DELAWARE
CODE ANNOTATED SHALL NOT APPLY TO THE TRUST.
SECTION 10.6. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions (including Additional
Amounts, if applicable) on, and the Redemption Price of, Trust Securities, as
applicable, or for any claim upon the Trust Securities or otherwise in respect
thereof, shall be had against any Securityholder or any Affiliate of a
Securityholder, solely by reason of such person being a Securityholder or an
Affiliate of a Securityholder, it being understood that the Securityholders,
solely by reason of being a Securityholder, have limited liability (in
accordance with the provisions of the Delaware Business Trust Act) for the
liabilities and obligations of the Trust. Nothing contained in this Section 10.6
shall be construed to limit the exercise or enforcement, in accordance with the
terms of this Trust Agreement, the Guarantee and the Indenture, of rights and
remedies against the Trust or the Depositor.
SECTION 10.7. Payments Due on Non-Business Day.
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If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no Distributions shall
accumulate on such unpaid amount for the period after such date.
SECTION 10.8. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or any Trustee, including any
successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under Article VIII of
the Indenture and pursuant to which the assignee agrees in writing to perform
the Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.
SECTION 10.9. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.10. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Houston Lighting &
Power Company, Houston Industries Plaza, 1111 Louisiana Street, Houston, Texas
77002, Attention: Treasurer, facsimile no.: (713) 207-3301, or to such other
address as may be specified in a written notice by the Holder of the Common
Securities or the Depositor, as the case may be, to the Property Trustee. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission. Such notice, demand or other communication
to or upon the Depositor shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Depositor.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee, to 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Trustee Administration; (b) with respect to the Delaware Trustee, to White Clay
Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust
Department; (c) with respect to the Administrative
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Trustees, to 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899,
marked "Attention Administrative Trustees of HL&P Capital Trust II"; and (d)
with respect to the Trust, to its principal office specified in Section 2.2,
with a copy to the Property Trustee. Such notice, demand or other communication
to or upon the Trust or the Property Trustee shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing by the Trust
or the Property Trustee.
SECTION 10.11. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.11, the
Property Trustee agrees, for the benefit of the Securityholders, that at the
expense of the Depositor, it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be stopped
and precluded therefrom and such other defenses, if any, as counsel for the
Trustee or the Trust may assert. The provisions of this Section 10.11 shall
survive the termination of this Trust Agreement.
SECTION 10.12. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required or
deemed provision shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
-59-
<PAGE>
SECTION 10.13. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE
GUARANTEE AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
-60-
<PAGE>
In WITNESS WHEREOF, the parties hereof have entered into this Trust
Agreement as of the date first above written.
Houston Lighting & Power Company
By: /s/ LINDA GEIGER
____________________________
Name: Linda Geiger
Title: Authorized Agent
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ REMO J. REALE
____________________________
Name: Remo J. Reale
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ WALTER M. GITLIN
____________________________
Name: Walter M. Gitlin
Title: Authorized Agent
/s/ NORMAN J. SHUMAN
____________________________
Norman J. Shuman,
as Administrative Trustee
/s/ LINDA GEIGER
____________________________
Linda Geiger,
as Administrative Trustee
/s/ PHILIP W. PARKER
____________________________
Philip W. Parker,
as Administrative Trustee
-61-
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST II
THIS CERTIFICATE OF TRUST of HL&P Capital Trust II (the "Trust"),
dated January 10, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act
(12 Del.C. (S) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is HL&P
Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at the
time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By:_____________________________
Name:
Title:
A-1
<PAGE>
EXHIBIT B
February __, 1997
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099
Attention: Mr. John Drennan
General Counsel's Office
Re: HL&P Capital Trust II 8.257% Capital Securities, Series B,
CUSIP No. - 40420EAA5
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to
the issuance and deposit with The Depository Trust Company ("DTC") of the HL&P
Capital Trust II 8.257% Capital Securities, Series B (the "Capital Securities"),
of HL&P Capital Trust II, a Delaware business trust (the "Issuer"), formed
pursuant to a Trust Agreement between Houston Lighting & Power Company (the
"Corporation") and The Bank of New York, as Property Trustee, The Bank of New
York (Delaware), as Delaware Trustee, and the Administrative Trustees named
therein. The payment of distributions on the Capital Securities, and payments
due upon liquidation of the Issuer or redemption of the Capital Securities, to
the extent the Issuer has funds available for the payment thereof, are
guaranteed by the Corporation to the extent set forth in a Guarantee Agreement,
dated February 4, 1997 by the Corporation with respect to the Capital
Securities. The Corporation and the Issuer propose to sell the Capital
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated January 30, 1997 by and among the Underwriters, the
Issuer and the Corporation, and the Underwriters wish to take delivery of the
Capital Securities through DTC. The Bank of New York is acting as transfer agent
and registrar with respect to the Capital Securities (the "Transfer Agent and
Registrar").
To induce DTC to accept the Capital Securities as eligible for deposit
at DTC, and to act in accordance with DTC's rules with respect to the Capital
Securities, the Issuer, the Transfer Agent and Registrar and DTC agree among
each other as follows:
1. Prior to the closing of the sale of the Capital Securities to the
Underwriters, which is expected to occur on or about February 4, 1997, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the name of DTC's Capital
Securities nominee, Cede & Co., representing an aggregate of 100% of the
B-1
<PAGE>
liquidation amount of such Capital Securities. If the aggregate liquidation
amount of any maturity exceeds $200 million, one certificate will be issued with
respect to each $200 million of liquidation amount and an additional certificate
will be issued with respect to any remaining liquidation amount. Each Capital
Security shall bear the following legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
The Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Capital Securities any information contained in the Capital Security
certificate(s); and (b) acknowledges that neither DTC's Participants nor any
person having an interest in the Capital Securities shall be deemed to have
notice of the provisions of the Capital Security certificate(s) by virtue of
submission of such certificate(s) to DTC.
2. The Amended and Restated Trust Agreement of the Issuer provides
for the voting by holders of the Capital Securities under certain limited
circumstances (without provision for revocation of votes). The Issuer shall
establish a record date for such purposes and shall, to the extent possible,
give DTC notice of such record date not less than 15 calendar days in advance of
such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Capital Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send to the Reorganization Department of DTC
a notice of such event at least 5 business days prior to the effective date of
such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Capital Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Capital Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Capital Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the
B-2
<PAGE>
Publication Date. The Issuer or the Transfer Agent and Registrar will forward
such notice either in a separate secure transmission for each CUSIP number or in
a secure transmission of multiple CUSIP numbers (if applicable) that includes a
manifest or list of each CUSIP number submitted in that transmission. (The party
sending such notice shall have a method to verify subsequently the use of such
means and the timeliness of such notice.) The Publication Date shall be not less
than 30 calendar days nor more than 60 calendar days prior to the payment of any
such distribution or any such offering or issuance of rights with respect to the
Capital Securities. After establishing the amount of payment to be made on the
Capital Securities, the Issuer or the Transfer Agent and Registrar will notify
DTC's Dividend Department of such payment 5 business days prior to payment date.
Notices to DTC's Dividend Department by telecopy shall be sent to (212) 709-
1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at (212) 709-
1270.
5. In the event of a redemption by the Issuer of the Capital
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Capital Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes), shall be sent, unless
notification to another department is expressly provided for herein, by telecopy
to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and
receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by
mail or any other means to:
B-3
<PAGE>
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Capital Securities and the accompanying
designation of the Capital Securities, which, as of the date of this letter, is
"HL&P Capital Trust II 8.257% Capital Securities, Series B."
8. Distribution payments or other cash payments with respect to the
Capital Securities evidenced by the Global Certificate shall be received by Cede
& Co., as nominee of DTC, or its registered assigns in same-day funds, no later
than 2:30 p.m. (Eastern Time) on each payment date (in accordance with existing
arrangements between the Issuer or the Transfer Agent and Registrar and DTC).
Absent any other arrangements between the Issuer or the Transfer Agent and
Registrar and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
The Issuer or the Transfer Agent and Registrar shall provide distribution
payment information to a standard announcement service subscribed to by DTC. In
the unlikely event that no such service exists, the Issuer agrees that it or the
Transfer Agent and Registrar shall provide this information directly to DTC in
advance of the distribution record date as soon as the information is available.
This information should be conveyed directly to DTC electronically. If
electronic transmission is not available, absent any other arrangements between
the Transfer Agent and Registrar and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686, and
receipt of such notices shall be confirmed by telephoning (212) 709-1270.
Notices to DTC pursuant to the above by mail or by any other means shall be sent
to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
9. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between the Transfer Agent and
Registrar and DTC, such payments shall be wired as follows:
B-4
<PAGE>
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to the Transfer Agent and Registrar.
10. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings, or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between the Transfer Agent and Registrar
and DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
11. DTC may by prior written notice direct the Issuer and the
Transfer Agent and Registrar to use any other telecopy number or address of DTC
as the number or address to which notices or payments may be sent.
12. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Capital Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
13. DTC may discontinue its services as a securities depositary with
respect to the Capital Securities at any time by giving reasonable written
notice to the Issuer and the Transfer Agent and Registrar (at which time DTC
will confirm with the Issuer or the Transfer Agent and Registrar the aggregate
number of Capital Securities deposited with it) and discharging its
responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Capital Securities, make available one or more
separate global certificates evidencing Capital Securities to any Participant
having Capital Securities credited to its DTC account, or issue definitive
Capital Securities to the beneficial holders thereof, and in any such case, DTC
agrees to cooperate fully with the Issuer and the Transfer Agent and Registrar,
and to return the Global Certificate, duly endorsed for transfer as directed by
the Issuer or the Transfer Agent and Registrar, together with any other
documents of transfer reasonably requested by the Issuer or the Transfer Agent
and Registrar.
B-5
<PAGE>
14. In the event that the Issuer determines that beneficial owners of
Capital Securities shall be able to obtain definitive Capital Securities, the
Issuer or the Transfer Agent and Registrar shall notify DTC of the availability
of certificates. In such event, the Issuer or the Transfer Agent and Registrar
shall issue, transfer and exchange certificates in appropriate amounts, as
required by DTC and others, and DTC agrees to cooperate fully with the Issuer
and the Transfer Agent and Registrar and to return the Global Certificate, duly
endorsed for transfer as directed by the Issuer or the Transfer Agent and
Registrar, together with any other documents of transfer reasonably requested by
the Issuer or the Transfer Agent and Registrar.
15. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of HL&P Capital Trust II.
Very truly yours,
HL&P CAPITAL TRUST II
(as Issuer)
By:_____________________________
Name:
Administrative Trustee
THE BANK OF NEW YORK
(as Transfer Agent and Registrar)
By:_____________________________
Name:
Title:
B-6
<PAGE>
Received and accepted:
THE DEPOSITORY TRUST COMPANY
By:_________________________
Authorized Officer
B-7
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO HOUSTON LIGHTING
& POWER COMPANY OR AN AFFILIATE OF HOUSTON LIGHTING &
POWER COMPANY IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.10 OF THE TRUST AGREEMENT AND ONLY IN CONNECTION
WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE
EXPENSE AGREEMENT REFERRED TO THEREIN
Certificate Number Number of Common Securities
C-1 ___________
Certificate Evidencing Common Securities
of
HL&P Capital Trust II
8.257% Common Securities
(liquidation amount $1,000 per Common Security)
HL&P Capital Trust II, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Houston
Lighting & Power Company (the "Holder") is the registered owner of
____________________________________________________________ (_______) common
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the 8.257% Common Securities (liquidation
amount $1,000 per Common Security) (the "Common Securities"). In accordance
with Section 5.10 of the Trust Agreement (as defined below), the Common
Securities are not transferable and any attempted transfer hereof shall be void.
The designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth in, and this certificate
and the Common Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of February 4, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of the Common Securities as set forth therein. The Trust will furnish
a copy of the Trust Agreement to the Holder without charge upon written request
to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
C-1
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of February, 1997.
HL&P CAPITAL TRUST II
By:_____________________________
Name:
Administrative Trustee
C-2
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT, dated as of February 4, 1997, between Houston Lighting &
Power Company, a Texas corporation (the "Corporation"), and HL&P Capital Trust
II, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from the Corporation and to issue and
sell its 8.257% Capital Securities, Series B (the "Preferred Securities") with
such powers, preferences and special rights and restrictions as are set forth in
the Amended and Restated Trust Agreement of the Trust, dated as of February 4,
1997, as the same may be amended from time to time (the "Trust Agreement"); and
WHEREAS, the Corporation will directly or indirectly own all of the
Common Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Corporation, as the holder of the
Common Securities, hereby agrees shall benefit it and which purchase the
Corporation, as the holder of the Common Securities, acknowledges will be made
in reliance upon the execution and delivery of this Agreement, the Corporation,
as the holder of the Common Securities, and the Trust hereby agree as follows:
ARTICLE I.
SECTION 1.1. Agreement and Guarantee by the Corporation.
Subject to the terms and conditions hereof, the Corporation agrees to
pay to the Trust for payment to the Beneficiaries (as hereinafter defined)
amounts equal to the Obligations (as hereinafter defined). In addition, subject
to the terms and conditions hereof, the Corporation, as the holder of the Common
Securities, hereby irrevocably and unconditionally guarantees to each person or
entity to whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all Obligations
to such Beneficiaries. As used herein, "Obligations" means any costs, expenses
or liabilities of the Trust, other than obligations of the Trust to pay to
holders of any Preferred Securities or other similar interests in the Trust the
amounts due such holders pursuant to the terms of the Preferred Securities or
such other similar interests, as the case may be in respect of principal,
interest (including Additional Interest) or Additional Amounts, on the Preferred
Securities. This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
D-1
<PAGE>
SECTION 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement, dated as of the date hereof by the Corporation and The Bank
of New York, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
SECTION 1.3. Waiver of Notice.
The Corporation hereby waives notice of acceptance of this Agreement
and of any Obligation to which it applies or may apply, and the Corporation
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of the Corporation
under this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence or
extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
D-2
<PAGE>
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against the
Corporation and the Corporation waives any right or remedy to require that any
action be brought against the Trust or any other person or entity before
proceeding against the Corporation.
SECTION 1.6. Subrogation.
The Corporation shall be subrogated to all (if any) rights of the
Trust in respect of any amounts paid to the Beneficiaries by the Corporation
under this Agreement; provided, however, that the Corporation shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Agreement.
ARTICLE II.
SECTION 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of the
Corporation and shall inure to the benefit of the Beneficiaries.
SECTION 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities
of any series are outstanding, this Agreement shall not be modified or amended
in any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and, if so given, shall be deemed given
when mailed or upon receipt of an answer back, if sent by telex):
HL&P Capital Trust II
200 West 9th Street Plaza
Box 2105
Wilmington, Delaware 19899
Facsimile No.: (302) 658-0468
Attention: Norman J. Shuman
D-3
<PAGE>
with a copy to:
Houston Industries Incorporated
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
SECTION 2.4. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THERETO.
SECTION 2.5. Limited Liability.
The holders of the Preferred Securities, in their capacities as such, shall
not be personally liable for any liabilities or obligations of the Trust arising
out of this Agreement, and the parties hereto hereby agree that the holders of
the Preferred Securities, in their capacities as such, shall be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
D-4
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
HOUSTON LIGHTING & POWER COMPANY
By:_____________________________
Name:
Title:
HL&P CAPITAL TRUST II
By:_____________________________
Name:
Administrative Trustee
D-5
<PAGE>
EXHIBIT E
IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT - This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
HL&P Capital Trust II or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
Certificate Number Number of Preferred Securities:
P- ________
Aggregate Liquidation Amount:
$__________
CUSIP No.: 40420EAA5
Certificate Evidencing Preferred Securities
of
HL&P Capital Trust II
8.257% Capital Securities, Series B
(liquidation amount $1,000 per Security)
HL&P Capital Trust II, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_______________ (the "Holder") is the registered owner of __________ (________)
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the HL&P Capital Trust II 8.257%
Capital Securities, Series B (liquidation amount $1,000 per Preferred Security)
(the "Preferred
E-1
<PAGE>
Securities") and having an aggregate liquidation amount of ______________
Dollars ($__________). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust, dated as of February 4, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of Preferred Securities as set forth therein. The Holder is entitled
to the benefits of the Guarantee Agreement entered into by Houston Lighting &
Power Company, a Texas corporation, and The Bank of New York, as guarantee
trustee, dated as of February 4, 1997 (the "Guarantee"), to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee
to the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ____ day of _______________, 19___.
HL&P CAPITAL TRUST II
By:_____________________________
Name:
Administrative Trustee
This is one of the Preferred Securities referred to in the within mentioned
Trust Agreement.
THE BANK OF NEW YORK,
as Property Trustee
By:_____________________________
Authorized Signatory
Dated:
E-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:___________________________________________________
_________________________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ________________________________________________
_________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:_________________________________
Signature:____________________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
SIGNATURE(S) GUARANTEED:
_____________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
E-3
<PAGE>
EXHIBIT 4.6-A
===============================================================================
GUARANTEE AGREEMENT
(Relating to HL&P Capital Trust I)
Between
HOUSTON LIGHTING & POWER COMPANY
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
dated as of
February 4, 1997
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
- ------------------- -------------------
<TABLE>
<CAPTION>
<S> <C>
310(a)................................................. 4.1(a)
310(b)................................................. 4.l(c), 2.8
310(c)................................................. Inapplicable
311(a)................................................. 2.2(b)
311(b)................................................. 2.2(b)
31l(c)................................................. Inapplicable
312(a)................................................. 2.2(a)
312(b)................................................. 2.2(b)
313.................................................... 2.3
314(a)................................................. 2.4
314(b)................................................. Inapplicable
314(c)................................................. 2.5
314(d)................................................. Inapplicable
314(e)................................................. 1.1, 2.5, 3.2
314(f)................................................. 2.1, 3.2
315(a)................................................. 3.1(d)
315(b)................................................. 2.7
315(c)................................................. 3.1
315(d)................................................. 3.1(d)
316(a)................................................. 1.1, 2.6, 5.4
316(b)................................................. 5.3
316(c)................................................. 8.2
317(a)................................................. Inapplicable
317(b)................................................. Inapplicable
318(a)................................................. 2.1 (b)
318(b)................................................. 2.1
318(c)................................................. 2.1 (a)
</TABLE>
_______________________________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS.............................................. 1
SECTION 1.1. DEFINITIONS.......................................... 1
ARTICLE II. TRUST INDENTURE ACT..................................... 4
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION..................... 4
SECTION 2.2. LIST OF HOLDERS...................................... 4
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE..................... 4
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE............ 4
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT..... 5
SECTION 2.6. EVENTS OF DEFAULT; WAIVER............................ 5
SECTION 2.7. EVENTS OF DEFAULT; NOTICE............................ 5
SECTION 2.8. CONFLICTING INTERESTS................................ 5
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE..... 6
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE........... 6
SECTION 3.2. CERTAIN RIGHTS OF THE GUARANTEE TRUSTEE.............. 7
SECTION 3.3. INDEMNITY............................................ 9
SECTION 3.4. COMPENSATION AND REIMBURSEMENT....................... 9
ARTICLE IV. GUARANTEE TRUSTEE....................................... 9
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY....................... 9
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE....................................10
ARTICLE V. GUARANTEE................................................11
SECTION 5.1. GUARANTEE............................................11
SECTION 5.2. WAIVER OF NOTICE AND DEMAND..........................11
SECTION 5.3. OBLIGATIONS NOT AFFECTED.............................11
SECTION 5.4. RIGHTS OF HOLDERS....................................12
SECTION 5.5. GUARANTEE OF PAYMENT.................................12
SECTION 5.6. SUBROGATION..........................................12
SECTION 5.7. INDEPENDENT OBLIGATIONS..............................13
ARTICLE VI. COVENANTS AND SUBORDINATION.............................13
SECTION 6.1. SUBORDINATION........................................13
SECTION 6.2. PARI PASSU GUARANTEES................................13
ARTICLE VII. TERMINATION............................................13
SECTION 7.1. TERMINATION..........................................13
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VIII. MISCELLANEOUS.........................................14
SECTION 8.1. SUCCESSORS AND ASSIGNS...............................14
SECTION 8.2. AMENDMENTS...........................................14
SECTION 8.3. NOTICES..............................................14
SECTION 8.4. BENEFIT..............................................15
SECTION 8.5. INTERPRETATION.......................................15
SECTION 8.6. GOVERNING LAW........................................16
SECTION 8.7. LIMITED LIABILITY....................................16
</TABLE>
iii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of February 4, 1997, is executed and
delivered by HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Guarantor"), having its principal office at Houston Industries Plaza, 1111
Louisiana Street, Houston, Texas 77002, and The Bank of New York, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Preferred Securities
and the Common Securities (each as defined herein and, together, the
"Securities") of HL&P CAPITAL TRUST I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
February 4, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor, the
Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing $250,000,000 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its 8.125% Trust
Preferred Securities, Series A, Liquidation Amount $25 per preferred security
(the "Preferred Securities"), and $7,732,000 aggregate Liquidation Amount (as
defined in the Trust Agreement) of its Common Securities, Series A, Liquidation
Amount $25 per common security (the "Common Securities"), each representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, the Issuer will use the proceeds of the issuance of the Securities
to purchase the Debentures (as defined in the Trust Agreement) of the Guarantor,
which will be deposited with The Bank of New York, a New York banking
corporation, as Property Trustee under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. DEFINITIONS.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but
<PAGE>
not otherwise defined herein shall have the meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debentures" has the meaning specified in the Trust Agreement.
"Event of Default" means a default by the Guarantor on any of its payments
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Securities, to the extent not paid or made by
or on behalf of the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Trust Agreement) required to be paid on the Securities, to the
extent the Issuer shall have funds on hand available therefor at such time, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price"), with respect to any Securities called
for redemption by the Issuer, to the extent the Issuer shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer, unless Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the Liquidation
Amount of $25 per Security plus accrued and unpaid Distributions on the
Securities to the date of payment and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer as required by
applicable law (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, a New York banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Securities Registrar, of any Securities; provided, however, that in determining
whether the holders of the requisite percentage of Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
-2-
<PAGE>
"Indenture" means the Junior Subordinated Indenture, dated as of February
1, 1997, as supplemented and amended, between the Guarantor and The Bank of New
York, a New York banking corporation, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the Liquidation Amount of all then outstanding
Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or a Vice
President, and by the Treasurer, an Associate Treasurer, an Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary, of such Person, and
delivered to the Guarantee Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 2.5 shall be the principal executive,
financial or accounting officer of the Guarantor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Assistant Treasurer, any Trust Officer or any other officer of
the principal corporate trust office of the Guarantee Trustee and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
-3-
<PAGE>
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. LIST OF HOLDERS.
(a) The Guarantor will furnish or cause to be furnished to the Guarantee
Trustee: (i) semiannually, not more than 15 days after June 15 and December 15
in each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders as of such June 15 and
December 15, and (ii) at such other times as the Guarantee Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished, excluding from any such list names and
addresses received by the Guarantee Trustee in its capacity as Securities
Registrar.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.
Not later than January 31 of each year, commencing January 31, 1998, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section
-4-
<PAGE>
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Guarantee Trustee is for informational
purposes only and the Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in Liquidation Amount of the Securities may, by
vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders
notices of all Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as a committee of Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer charged with the administration of
this Guarantee Agreement shall have obtained written notice of such Event of
Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
-5-
<PAGE>
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee Agreement,
and the Guarantee Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
-6-
<PAGE>
provision hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform on their face to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Guarantee Trustee, unless
it shall be proved that the Guarantee Trustee was negligent in ascertaining
the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in Liquidation Amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 3.2. CERTAIN RIGHTS OF THE GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this Guarantee
Agreement shall be sufficiently evidenced by an Officers' Certificate unless
otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
-7-
<PAGE>
upon an Officers' Certificate which, upon receipt of such request from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it hereunder
in good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and may
be one of its employees. The Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall have provided to the
Guarantee Trustee such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee; provided
that nothing contained in this Section 3.2(a)(v) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Guarantee
Agreement.
(vi) The Guarantee Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, and the Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other action hereunder, the
Guarantee Trustee (A) may request instructions from the Holders, (B) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received and (C) shall be fully protected in acting in
accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or
-8-
<PAGE>
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed to be a duty to
act in accordance with such power and authority.
SECTION 3.3. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any and all loss, damage, claims, liability or expense,
including taxes (other than taxes based on the income of the Guarantee Trustee),
incurred without negligence or bad faith on the part of the Guarantee Trustee
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement. This indemnity shall survive the
termination of this Guarantee Agreement.
SECTION 3.4. COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees (i) to pay to the Guarantee Trustee from time to time
such compensation as the Guarantor and the Guarantee Trustee shall from time to
time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and (ii) except as otherwise
expressly provided herein, to reimburse the Guarantee Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Guarantee Trustee in accordance with any provision of this Guarantee Agreement
(including the compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith. This Section 3.4 shall survive the
termination of this Guarantee Agreement.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least $50,000,000,
and shall be a corporation meeting the requirements of Section 310(a) of the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the
-9-
<PAGE>
supervising or examining authority, then, for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed by the Guarantor (i) without cause at any time when an Event of Default
has not occurred and is continuing and (ii) at any time when the Guarantee
Trustee ceases to be eligible to act as the Guarantee Trustee pursuant to
Section 4.1 hereof or becomes incapable of acting or is adjudged a bankrupt or
insolvent or a receiver of the Guarantee Trustee or of its property is appointed
or any public officer takes charge or control of the Guarantee Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
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<PAGE>
ARTICLE V. GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of setoff or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Securities or the
extension of time for the performance of any other obligation under, arising out
of or in connection with the Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Securities, or any action
on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization,
-11-
<PAGE>
arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of not less than
a Majority in Liquidation Amount of the Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Issuer or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon the distribution of Debentures to the Holders as
provided in the Trust Agreement.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this
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<PAGE>
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. SUBORDINATION.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Indenture) of
the Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article XIII of the Indenture
will apply, mutatis mutandis, to the obligations of the Guarantor hereunder.
The obligations of the Guarantor hereunder do not constitute Senior Debt (as
defined in the Indenture) of the Guarantor.
SECTION 6.2. PARI PASSU GUARANTEES.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any HL&P Trust (as defined in the
Indenture).
ARTICLE VII. TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Securities, (ii)
the distribution of Debentures to the Holders in exchange for all of the
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Securities or this Guarantee Agreement. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Issuer or upon distribution of Debentures to
the Holders as provided in the Trust Agreement.
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<PAGE>
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article VIII of the Indenture
and pursuant to which the successor or assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may be amended only with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
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<PAGE>
HL&P Capital Trust I
200 West 9th Street Plaza
Box 2105
Wilmington, Delaware 19899
Facsimile No.: (302) 658-0468
Attention: Norman J. Shuman
with a copy to:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
and
Houston Industries Incorporated
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Securities.
SECTION 8.5. INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.1;
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<PAGE>
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter gender used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.6. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
SECTION 8.7. LIMITED LIABILITY.
The Holders of the Preferred Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the Issuer
arising out of this Guarantee Agreement, and the parties hereto hereby agree
that the Holders of the Preferred Securities, in their capacities as such, shall
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
HOUSTON LIGHTING & POWER COMPANY
By: /s/ LINDA GEIGER
__________________________________
Name: Linda Geiger
Title: Authorized Agent
THE BANK OF NEW YORK,
as Guarantee Trustee
By: /s/ REMO J. REALE
__________________________________
Name: Remo J. Reale
Title: Assistant Vice President
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<PAGE>
EXHIBIT 4.6-B
================================================================================
GUARANTEE AGREEMENT
(Relating to HL&P Capital Trust II)
Between
HOUSTON LIGHTING & POWER COMPANY
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
dated as of
February 4, 1997
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
- ------------------- -------------------
<S> <C>
310(a) 4.1(a)
310(b) 4.l(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
31l(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.3
316(c) 8.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
318(b) 2.1
318(c) 2.1(a)
</TABLE>
________________________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS 1
SECTION 1.1. DEFINITIONS 1
ARTICLE II. TRUST INDENTURE ACT 4
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION 4
SECTION 2.2. LIST OF HOLDERS 4
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE 4
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE 4
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT 5
SECTION 2.6. EVENTS OF DEFAULT; WAIVER 5
SECTION 2.7. EVENTS OF DEFAULT; NOTICE 5
SECTION 2.8. CONFLICTING INTERESTS 5
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 6
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE 6
SECTION 3.2. CERTAIN RIGHTS OF THE GUARANTEE TRUSTEE 7
SECTION 3.3. INDEMNITY 9
SECTION 3.4. COMPENSATION AND REIMBURSEMENT 9
ARTICLE IV. GUARANTEE TRUSTEE 9
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY 9
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE 10
ARTICLE V. GUARANTEE 11
SECTION 5.1. GUARANTEE 11
SECTION 5.2. WAIVER OF NOTICE AND DEMAND 11
SECTION 5.3. OBLIGATIONS NOT AFFECTED 11
SECTION 5.4. RIGHTS OF HOLDERS 12
SECTION 5.5. GUARANTEE OF PAYMENT 12
SECTION 5.6. SUBROGATION 12
SECTION 5.7. INDEPENDENT OBLIGATIONS 13
ARTICLE VI. COVENANTS AND SUBORDINATION 13
SECTION 6.1. SUBORDINATION 13
SECTION 6.2. PARI PASSU GUARANTEES 13
ARTICLE VII. TERMINATION 13
SECTION 7.1. TERMINATION 13
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VIII. MISCELLANEOUS 14
SECTION 8.1. SUCCESSORS AND ASSIGNS 14
SECTION 8.2. AMENDMENTS 14
SECTION 8.3. NOTICES 14
SECTION 8.4. BENEFIT 15
SECTION 8.5. INTERPRETATION 15
SECTION 8.6. GOVERNING LAW 16
SECTION 8.7. LIMITED LIABILITY 16
</TABLE>
iii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of February 4, 1997, is executed and
delivered by HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Guarantor"), having its principal office at Houston Industries Plaza, 1111
Louisiana Street, Houston, Texas 77002, and The Bank of New York, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital Securities and
the Common Securities (each as defined herein and, together, the "Securities")
of HL&P CAPITAL TRUST II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
February 4, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor, the
Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing $100,000,000 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its 8.257% Capital
Securities, Series B, Liquidation Amount $1,000 per capital security (the
"Capital Securities"), and $3,093,000 aggregate Liquidation Amount (as defined
in the Trust Agreement) of its Common Securities, Series B, Liquidation Amount
$1,000 per common security (the "Common Securities"), each representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, the Issuer will use the proceeds of the issuance of the Securities
to purchase the Debentures (as defined in the Trust Agreement) of the Guarantor,
which will be deposited with The Bank of New York, a New York banking
corporation, as Property Trustee under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. DEFINITIONS.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but
<PAGE>
not otherwise defined herein shall have the meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debentures" has the meaning specified in the Trust Agreement.
"Event of Default" means a default by the Guarantor on any of its payments
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Securities, to the extent not paid or made by
or on behalf of the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Trust Agreement) required to be paid on the Securities, to the
extent the Issuer shall have funds on hand available therefor at such time, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price"), with respect to any Securities called
for redemption by the Issuer, to the extent the Issuer shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer, unless Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the Liquidation
Amount of $1,000 per Security plus accrued and unpaid Distributions on the
Securities to the date of payment and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer as required by
applicable law (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, a New York banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Securities Registrar, of any Securities; provided, however, that in determining
whether the holders of the requisite percentage of Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
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<PAGE>
"Indenture" means the Junior Subordinated Indenture, dated as of February
1, 1997, as supplemented and amended, between the Guarantor and The Bank of New
York, a New York banking corporation, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the Liquidation Amount of all then outstanding
Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or a Vice
President, and by the Treasurer, an Associate Treasurer, an Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary, of such Person, and
delivered to the Guarantee Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 2.5 shall be the principal executive,
financial or accounting officer of the Guarantor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Assistant Treasurer, any Trust Officer or any other officer of
the principal corporate trust office of the Guarantee Trustee and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
-3-
<PAGE>
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. LIST OF HOLDERS.
(a) The Guarantor will furnish or cause to be furnished to the Guarantee
Trustee: (i) semiannually, not more than 15 days after June 15 and December 15
in each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders as of such June 15 and
December 15, and (ii) at such other times as the Guarantee Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished, excluding from any such list names and
addresses received by the Guarantee Trustee in its capacity as Securities
Registrar.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.
Not later than January 31 of each year, commencing January 31, 1998, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by
-4-
<PAGE>
Section 314 of the Trust Indenture Act and the compliance certificate required
by Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Guarantee Trustee is for informational
purposes only and the Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in Liquidation Amount of the Securities may, by
vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as a committee of Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer charged with the administration of
this Guarantee Agreement shall have obtained written notice of such Event of
Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee Agreement;
but in the case of any such certificates or opinions that by any
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provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform on their face to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if the Guarantee
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF THE GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party
or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely
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upon an Officers' Certificate which, upon receipt of such request from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or opinion. Such legal counsel may be legal counsel to the Guarantor
or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the
position of the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions
from the Holders, (B) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(C) shall be fully protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or
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obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed to be a duty to
act in accordance with such power and authority.
SECTION 3.3. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any and all loss, damage, claims, liability or expense,
including taxes (other than taxes based on the income of the Guarantee Trustee),
incurred without negligence or bad faith on the part of the Guarantee Trustee
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement. This indemnity shall survive the
termination of this Guarantee Agreement.
SECTION 3.4. COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees (i) to pay to the Guarantee Trustee from time to time
such compensation as the Guarantor and the Guarantee Trustee shall from time to
time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and (ii) except as otherwise
expressly provided herein, to reimburse the Guarantee Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Guarantee Trustee in accordance with any provision of this Guarantee Agreement
(including the compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith. This Section 3.4 shall survive the
termination of this Guarantee Agreement.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
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supervising or examining authority, then, for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed by the Guarantor (i) without cause at any time when an Event of Default
has not occurred and is continuing and (ii) at any time when the Guarantee
Trustee ceases to be eligible to act as the Guarantee Trustee pursuant to
Section 4.1 hereof or becomes incapable of acting or is adjudged a bankrupt or
insolvent or a receiver of the Guarantee Trustee or of its property is appointed
or any public officer takes charge or control of the Guarantee Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
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ARTICLE V. GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of setoff or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Securities, or any action
on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization,
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arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of not less than
a Majority in Liquidation Amount of the Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Issuer or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon the distribution of Debentures to the Holders as
provided in the Trust Agreement.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this
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Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. SUBORDINATION.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Indenture) of
the Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article XIII of the Indenture
will apply, mutatis mutandis, to the obligations of the Guarantor hereunder.
The obligations of the Guarantor hereunder do not constitute Senior Debt (as
defined in the Indenture) of the Guarantor.
SECTION 6.2. PARI PASSU GUARANTEES.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any HL&P Trust (as defined in the
Indenture).
ARTICLE VII. TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Securities, (ii)
the distribution of Debentures to the Holders in exchange for all of the
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Securities or this Guarantee Agreement. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Issuer or upon distribution of Debentures to
the Holders as provided in the Trust Agreement.
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ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article VIII of the Indenture
and pursuant to which the successor or assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may be amended only with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
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HL&P Capital Trust II
200 West 9th Street Plaza
Box 2105
Wilmington, Delaware 19899
Facsimile No.: (302) 658-0468
Attention: Norman J. Shuman
with a copy to:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
and
Houston Industries Incorporated
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Securities.
SECTION 8.5. INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.1;
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(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter gender used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.6. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
SECTION 8.7. LIMITED LIABILITY.
The Holders of the Capital Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the Issuer
arising out of this Guarantee Agreement, and the parties hereto hereby agree
that the Holders of the Capital Securities, in their capacities as such, shall
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
HOUSTON LIGHTING & POWER COMPANY
By: /s/ LINDA GEIGER
________________________________
Name: Linda Geiger
Title: Authorized Agent
THE BANK OF NEW YORK,
as Guarantee Trustee
By: /s/ REMO J. REALE
________________________________
Name: Remo J. Reale
Title: Assistant Vice President
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